Today (3rd October), the Labour Party launched our Alternative Budget for 2020. You can read my comments on it and download the document here.
Our economy is in much better shape now than it was ten years ago and the tax returns yesterday confirm that. But this Government is not able to manage spending properly whether it’s the children’s hospital or controlling rents. This Government has been the creator of crisis and lacks competency.
Economic growth in urban areas is not flowing out to every region. Even in Dublin, my own constituency has plenty of people who are suffering from the high cost of living and the lack of real opportunities. In Labour’s alternative budget, we have proposed sensible measures to rebalance the share of income and wealth.
As the Comptroller and Auditor General’s report has shown, the bank bailout will cost a net figure of over €41 billion, and over €1.1 billion in interest costs every year. That is why Labour are proposing raising the Bank Levy, to recoup an additional €250 million from the banking sector, to go some way to paying their debts to the Irish public.
High net worth individuals are often not paying their fair share, which is why Labour is proposing to phase out the tax credits on people earning over €100,000, and to increase Stamp Duty on shares, and abolish so-called entrepreneurial relief on Capital Gains Tax. In combination, these measures would raise €318 million. In contrast, Fine Gael’s leader is still promising tax cuts for the better off, even in the eye of the storm that is a ‘no deal’ Brexit.
Our overall package of revenue measures would bring in €1.41 billion, which would still keep Ireland among the lowest tax regimes in the European Union, but which would provide much needed funds for housing, healthcare and education.
First of all, Labour would add a weekly €5 to all social welfare payments, to help pensioners, carers, people with disabilities and long-term social welfare recipients to catch up with the cost of living that has got out of control under Fine Gael.
We have two specific measures, one to deal with discrimination against people who receive the blind allowance, and secondly pre 1995 public servants who having paid tax all their life still don’t qualify for PRSI treatment benefits. The Government has made a big play about extending these to self employed people. Retired civil servants deserve the same access.
On climate change we are learning from our children that we need to significantly reduce our emissions now. We need to clean the air in our towns and cities, and plant millions of tress across Ireland to soak up carbon. We need to reduce emissions from people’s home heating, from transport, from farming and from electricity generation.
So Labour would invest in an ambitious home retrofitting scheme, with €100 million allocated to a programme to retrofit thousands of Council homes, with an option for home owners to pay a contribution to be included in the scheme, which would operate on a street-by-street basis to maximise efficiency and coverage. We’d also add €2.50 a week to the Fuel Allowance, and grant an extra week, to help people deal with any rise in the cost of home heating. We have proposed to reduce public transport fares by 10%.
To give every child a fair start in life, we’d ensure primary education is genuinely free-of-charge. That means free schoolbooks, a universal grant for uniforms, and hot school meals. We have put in a range of measures to support DEIS schools in disadvantaged areas, including a 50% increase in capitation. We have included funding to reduce third-level fees by €1000.
Finally, we would ensure every child has an opportunity to avail of arts and culture in every year at school. We would fund an ambitious Arts Guarantee at School, funded by adding 20% to the funds for organisations in the Arts sector. Every child should have at least one cultural experience every year, to bring about real social and cultural inclusion in our society.
Paschal Donohoe has spent a lot of time telling everyone that he only has €700 million to play with in this budget. It is really €900 million, but he does not like to draw attention to the fact that he’s had to add €200 million every year for the foreseeable future to cover cost overruns in the National Children’s Hospital and the National Broadband Plan. But that’s not the main point.
The only reason that Paschal Donohoe has so little money to play with, is because Fine Gael is aiming for a budget surplus of 0.4% of GDP, or €1.2 billion. This big surplus is well within the EU rules, and in fact it goes beyond what is required.
With Brexit a major threat to the economy, combined with the crises in healthcare and housing, Labour believes that we need to invest more now. That is why we have aimed for a more modest surplus of 0.2% of GDP, which frees up an additional €700 million for much needed public services.