Republican News · Thursday 31 January 2002

Budget for an Ireland of equals

Did you know that Sinn Féin is the only party that has produced a budget submission? It is the only party that has a plan about how the government spending should be directed.

This year, with five TDs and an eight-member backup team, Sinn Féin in Leinster House has produced a detailed submission, offering not just a stinging critique of government failure but also a radical socialist republican alternative that could produce a just budget.

This morning Sinn Féin will launch the submission and we sample some of the high points on equality and tax.

Step 1 Equality-proof the Budget

Discrimination and social and economic marginalisation go hand in hand. As a matter of priority, we want a budget that moves us closer to an Ireland of Equals.

Sinn Féin calls for the government to:

Equality-proof this budget (including poverty-proofing) - in a transparent process. We want to see a "report card" on this budget.

Equality/poverty proof ANY budget cuts.

Recognise inclusivity and equalisation as significant "value for money".

Back promised equality measures with adequate financial commitments.

Put its money where its mouth is on equality and - at minimum - fund full implementation of the recommendations of the National Anti-Poverty Strategy; the National Plan for Women; the Taskforce on the Travelling Community (1995) and Traveller Health Strategy; the National Plan Against Racism; and the report of the Commission for the Status of People with Disabilities.

Increase transparency by creating a line-itemised "Equalisation Measures" section of the budget, reflecting spending across all departments to redress regional inequality, economic inequality, social inequality, and global inequality (ODA); and a similar line-itemised "Equality Measures" section reflecting spending per department.

Step 2 What is a budget for?

Sinn Féin believes that we need a fair and just tax regime as a means to redistribute resources and invest in those parts of society suffering economic marginalisation and social exclusion.

We want to use tax revenue to invest in health, education, pensions, and child welfare, and to invest also in economic development and aid business to grow sustainably and make a positive contribution to society.

A priority is building infrastructure that benefits all and is grounded in the guarantee of universal provision, whether it is energy, roads, public transport, telecommunications, social, health or educational resources and facilities.

Step 3 Time to tackle tax inequality

We need to rebuild our tax regime based on the principles of equity and transparency.

Three reviews

(1) A comprehensive tax review

When it comes to formulating tax policy, there has been one question that successive governments have been afraid to ask. Who is paying tax and more importantly who isn't?

There must be a comprehensive review of the tax regime. To do this properly would involve all the social partners. It must be time limited and must seek to formulate proposals for a truly equitable tax system.

(2) Room at the top? Analyse and publicise the revenue data

Request the Revenue Commissioners to redo a survey last undertaken in 1997 of what percentage income tax the richest earners in the 26 Counties are paying. The 1997 survey found that some of the top earners were paying little or no tax through the use of avoidance measures. One in five was paying tax at an effective rate of less than 5%.

The 26 Counties has one of the lowest taxation takes in the industrialised world, and 82.6% of income tax is being paid by the PAYE sector.

(3) A cost benefit analysis of tax reliefs and shelters

We need a cost benefit analysis of the battery of tax reliefs that have been set up by minister after minister. What benefits are we as a society getting from these tax reliefs and what are the costs?

Step 4 Justice in Income Tax

(1) Super tax

Figures released last January showed that 62% of workers earn less than €25,396 annually. But there is a super wealthy group of more than 28,000 households who in 2001 earned more than €126,984 (£100,000) per year.

Sinn Féin proposes a new 50% super tax band for individual incomes more than €100,000 as an appropriate measure while we wait for the Department of Finance to come clean on how little tax the wealthy in Irish society are paying.

(2) Take the low paid out of the tax net

At the other end of the scale, we need to take the low paid completely out of the tax net and not just those on the minimum wage. Increasing tax credits is the fairest way of doing this.

(3) Tax Exiles

This is a complicated issue and needs to be addressed vigorously. Sinn Féin believes that all income generated in the state should be liable to general taxation, irrespective of the residency of the individuals concerned.

Step 5 Fair Business Taxes

(1) Tax relief for Research & Development and investment in workers

R&D investment in the 26 Counties is 40% of the EU average and must be increased. It is a vital element of any future job creation strategy. Here too there is a role for the social partners in formulating proposals for generating incentives not just for increased R&D but also for investing in the education and training of workers. Tax credits for real R&D makes sense.

(2) Capital Gains Tax

We call for an increase in Capital Gains Tax to 40%, back to the level it was before Minister McCreevy took office.

(3) PRSI

We want to return employers PRSI to 12%. Employers' payroll taxes are already the lowest in the EU and would still be competitive internationally at a 12% PRSI rate.

(4) Corporation Tax

There should be no more cuts in corporation tax. The rate should be maintained at 16%, given that the ESRI has stated that a rate of 17.5% could be sustained without damage to competitiveness.

Step 6 Tackle Vested Interests

(1) Mortgage relief for speculative investors

Rescind the decision taken in the last budget to restore mortgage relief on second homes and curtail existing property reliefs.

(2) Bringing the banks into line

The banking sector might have got away with paying off their outstanding DIRT taxes years late, but with profits way above the EU average, we need more inventive ways of using the massive financial resources of the Irish banking sector in a positive way.

One proposal is to get them to divert some of their profits in social and infrastructural investments such as ICT networks, small business development and social economy projects, such as addressing the lack of effective childcare provision.