Today’s publication by the ESRI of their analysis of Budget 2020 confirms what was said on Budget Day – that Budget 2020 is regressive. It also highlights a potential issue with the figures presented by the Minister for Finance due to his reliance on compliance measures for €175m of revenue which are “inherently uncertain” and “difficult”. What this means is it could lead to a large hole in his Budget that will mean services are being funded from uncertain revenue and this isn’t prudent.
The findings of the ESRI confirm that the Budget hits people on lower incomes – pensioners on State pensions, carers, people on disability, are particularly hard because their income broadly stays the same next year while people at work will see likely increases in their wages of somewhere between 3% and 4.5% depending on how well the economy does.
In addition people on very low wages, particularly people on the minimum wage have been told by the Fine Gael Government that the minimum wage increase which was proudly promised by the Taoiseach a short time ago at the Irish Congress of Trade Unions, has been postponed indefinitely. That loss of 30 cent extra an hour will mean low paid workers will lose out due to inflation next year.
The Labour Party would have increased the levy on the banks by €250m a year alongside other revenue measures that would have ensured incomes are protected, and we would have approved the minimum wage increase from January.
So all in all the resounding commentary from the experts in the ESRI was that this is a very regressive budget. It does very little for parents and in particular lone parents and pensioner couples. They were identified by the ESRI as the people who will likely suffer most next year. So as everybody elses income rises, their income stands still and therefore they will fall behind.
In a country which is facing into the challenge of Brexit, the Government had promised to protect people who would be most at risk. Nobody is at greater risk from Brexit than people who are in very low paid work, and families and individuals who rely on social welfare.
It is difficult to understand what the Government strategy has been other than that they have consciously decided to stand aside from the progress that had been made over many years in improving the payments of people in low pay and fixed incomes, such as pensioners.