By Sarah Mac Donald - 16 October, 2014
Dr Sean Healy and Michelle Murphy of Social Justice Ireland.
Budget 2015 widened the rich-poor gap by €499 a year as the rich gained most from “a budget of missed opportunities” according to Social Justice Ireland.
In a 24-page detailed analysis and critique of Budget 2015, the organisation found that the hardest hit in the period since 2008 lost out again and there was a major failure to address the ‘working poor’ situation.
Social Justice Ireland (SJI) said a fairer outcome could have been achieved but that Budget 2015 had instead turned out to be the fourth regressive budget in a row.
“While it contains a number of welcome initiatives and positive developments, overall the Budget is deeply disappointing,” SJI stated.
Over €1bn was allocated in tax cuts and expenditure increases but the choices made by the Government show a profound lack of a coherent, guiding vision, SJI noted.
Terming it “a Budget of missed opportunities”, SJI said it lacked the long-term focus on real recovery that this particular moment required.
“It failed, in effect, to even set out a clear pathway forward that would promote the common good.”
The Budget widened the rich-poor gap. This measures the gap between the disposable income of a single unemployed person and a single person on €50,000 per annum. If compared with people on higher salaries the rich-poor gap has widened even more.
Budget 2015 gave €0.90 a week increase to an unemployed single person while giving €14.30 a week to a single person earning €75,000.
In the case of couples, the unemployed got €1.51 a week (€78.52 a year) extra while a couple with two earners on €125,000 will receive an extra €23.57 a week (€1,225.64 a year) as a result of the Budget changes.
Those who proportionately took the greatest hits during the crisis were left behind again as priority was given to reducing the top income tax rate.
In the period 2008-2015 budget changes in tax and social welfare have impacted most on two groups i.e. welfare-dependent households (losses up to 12.5%) and working poor households (losses up to 11.3%), SJI highlighted.
Budget 2015 does little to reverse this situation and fails to prioritise such groups, the group warned.
However, SJI acknowledged some positive developments including the increase in child benefit and the increased allocation in areas such as social housing and health.
For example, the promise of a new Plan for Social Housing to be published within weeks is a move in this direction even though the overall target of 30,000 new homes over several years falls far short of what is needed in a country with a growing waiting list which is currently over 90,000 households, SJI stated.
The recognition that the health budget needs to be adjusted over a two-year period is a welcome development within a budget that shows a modest increase in funding for 2015.
A concern in this area is the lack of any evidence that provision has been made for demographic changes and the consequent increasing number of older people and people with disabilities needing care.
But SJI said the Budget fails dramatically to address the working poor issue.
“These have been among the worst hit in the period since 2008. The Government will claim that they did as much as they could with the resources available. However this is not the case,” SJI challenged.
Noting that the total cost of the income tax and USC adjustments was €642m, SJI said the distribution of the benefits resulting from Government’s choices was skewed in favour of the better off and dramatically widened the rich-poor gap.
