independent

Thursday 17 April 2014

Unions warn of budget jobs impact

David Begg, General Secretary of the Irish Congress of Trade Unions

More than 20,000 jobs could be lost next year if the Government pushes ahead with plans to slash public spending in the budget, it has been claimed.

The Irish Congress of Trade Unions (ICTU), which proposed its own package of cost-saving measures, said its alternative plan would pave the way for 41,000 new positions.

As official figures showed the number of people out of work fell by 22,000 in the year to the end of June, Congress secretary general David Begg warned the unemployment crisis will continue without investment.

"Despite some recent good news on the jobs front, Ireland remains mired in recession and we need to change course and try to accelerate recovery," Mr Begg said.

"We still have one in four out of work or under-employed, collapsed retail sales and flat domestic demand."

Congress has called for an easier budget of two billion euro - 1.65 billion euro of which raised through tax revenues, including new taxes on the richest 10% of households.

It claimed that the one billion euro of savings generated through the promissory notes deal should be grounds for a reduced adjustment and it also called for:

:: A hold on public spending cuts to be boosted by a 4.5 billion euro investment stimulus from public-private partnerships and the European Investment Bank.

:: Higher effective tax rates for the top 10% of households.

:: New minimum effective rates payable in income tax, USC and PRSI, a reduction in tax reliefs for top earners and a gradual withdrawal of tax credits above a threshold of 109,000 euro a year.

:: A wealth tax to bring in 150m euro a year.

:: Cut tax reliefs for corporations to raise 250m euro in 2014 while maintaining the standard 12.5% corporation tax rate.

The Government is expected to announce an adjustment of 3.1 billion euro in the budget this October - made up of spending cuts and tax hikes. Its target is to reduce its deficit to 3% of GDP in 2015.

Congress insisted its alternative budget would achieve the same goal, while at the same time boosting employment.

Along with the Nevin Economic Research Institute, it has predicted the Government's likely plan will result in a loss of 22,000 jobs in 2014, and a further 39,000 jobs in 2015.

By contrast, it claimed its proposals would create 41,000 jobs next year, while also reducing the State's debt, and a further 75,000 positions in 2015.

Mr Begg said maintaining public spending plus the additional investment proposed would lead to more jobs in the services sector, such as construction and manufacturing.

"I think some areas are looking to grow quite considerably in the next few years - services in particular," Mr Begg said.

"But I did mention, crucially, some of those of infrastructural needs, particularly investment in renewables, retrofitting houses and public buildings.

"Now that would not necessarily constitute a huge number of extra jobs initially, but that would be part of it."

Press Association

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