A ‘Giveaway’ Alright But How Far Down The Road Will It Take Us?

by Rose Barrett
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As predicted last week, Budget 2023 was mostly a Giveaway Budget in an effort to deal with the dual threat of rising inflation and the runaway cost of energy bills due to the Russian invasion of Ukraine. 

But are the packages announced by Finance Minister Paschal Donohoe and Minister for Public Service and Reform, Michael McGrath, sufficient to stave off cold and hunger under their one off payment strategy? 

The increased payments were targeted into the state pension and social welfare allowance, additional tax benefits, business supports, etc with the hope rather than belief that they will be enough to see lower-middle income families survive the winter without switching off the heating and lights or going hungry instead. 

Sinn Fein, the main Opposition party, was highly critical of the government’s failure to deliver a budget that seemed to promise everything – stating ultimately, it delivered very little, especially with regards to housing. 

Addressing the Dáil on Tuesday, Finance spokesperson, Deputy Pearse Doherty said: “Everything is going in the wrong direction… inflation is on the rise…house prices, rents and interest rates going up. The government had an opportunity to plan for the future and deliver on housing, health, and more …..but they have failed to do that today. “Budget 2023 confirmed the Help-to-Buy scheme will remain at current rates until the end of 2024. Taxpayers who rent will receive a new rent tax credit of €500 per annum from 2023 (which can also be claimed in respect of rent paid in 2022). 

Deputy Doherty stated this incentive will barely benefit renters who will have to deal with increased rents and inflation. Increases in building material (10 per cent on cement being one) also makes it harder for lower to middle income families to ever afford to build or purchase a home, said Sinn Féin. However, following recent mica and pyrite scandals, the government applied the levy on concrete blocks and some concrete products to fund the redress scheme (the 10% levy will apply from April 2023). A €7.50 increase in the carbon tax to €48.50 per tonne was introduced to fund retrofitting measures under Housing for All. 

Minister for Finance Paschal Donohoe TD and Minister for Public Expenditure and Reform Michael Mc Grath TD deliver Budget 2023. Picture shows the Minister Donohoe and Minister McGrath ahead of taking the floor in the Dail for their Budget speeches. Picture Julian Behal

Mr Donohoe noted 25,000 new homes were constructed over the past year and a further 28,000 are under construction with a further 44,000 having been granted planning permission. 

The government’s budget could be characterised by a fundamental lack of targeting with high income earners benefiting disproportionately, claimed Social Democrats co-leader Róisín Shortall. 

“A failure to target supports at those who need them most is a recurring theme with this government – and the tax changes announced today are perhaps the most acute example of this. 

“Just 23pc of income earners pay the top rate of tax, but more than 80% of the benefits of today’s tax changes accrue to those workers. While those earning below €37,000 benefit by just €175, higher income earners will benefit by more than €800,” she pointed out. 

Labour employment spokesperson Marie Sherlock said the Budget was more about buying time for an out of touch Government. It provided little comfort for low paid and disabled workers and that the Government has again failed to recognise the massive challenges they face, she emphasised. 

“Low paid single workers earning between €23k and €36k will see a miserly €4 extra in take home pay per week while all those earning above will get €831 extra per year or €16 per week. These are the low paid workers who are being screwed by a dysfunctional rental market and will only ever dream of having the security of owning their own home.” 

People Before Profit/Solidarity’s Richard Boyd Barrett said the €12 increase to social welfare payments in the budget was not enough to protect people from “being driven into further poverty.” 

Deputy Paul Murphy said the Dail voted to put €5 billion in a “rainy day” fund instead of investing in public housing now. 

Ireland’s largest trade union representing over 180,000 members, SIPTU was scathing in its response to the new fiscal measures. “The government’s failure to regulate energy prices means that households and businesses are taking on the risks of rising prices. 

“The electricity credits, once-off social transfers and business supports are effectively subsidising high energy prices and may not be enough to shield the economy from long-term inflation,” researcher Michael Taft stressed. 

With the threat of recession lurking in the background, SIPTU claims it is debatable to what extent budget measures will avert that prospect. “The projected stagnation of growth in the domestic economy in 2023 combined with a projected inflation rate of over 15 per cent for this year and next puts Ireland in a precarious situation, in this regard.” 

The Society of St Vincent de Paul (SVP) welcomed aspects to Budget 2023 but unequivocally stated the one-off measures won’t stem a rise in poverty. The Society had called for a minimum increase of €20 per week in social welfare payments across the board while SIPTU similarly stated the €12 increase in pension and social welfare payments from January next will not match inflation. 

Despite a €600 electricity credit for all households (three by €200 instalments) and an additional one-off fuel allowance payment of €400 before Christmas, along with the €12 per week increase in social welfare and pensions, the SVP said these “cost of living packages will help people get through this winter but next year people on low incomes will be pulled further into poverty due to inadequate social welfare increases and a failure to increase or expand the Fuel Allowance to families on the Working Family Payment.”

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