Sunday 18 February 2018

Budget 2013: Government denies child benefit to be slashed by €40 a month

Lyndsey Telford

THE Government has denied any decision has been taken to slash child benefit by €40 a month.

Anti-poverty group Social Justice Ireland warned today that the advice to the Government to cut child benefit were unjust, unnecessary and unacceptable.

However, Children's Minister Frances Fitzgerald dismissed speculation that the cuts were a done deal.

She insisted no decisions on child benefit had been made and that discussions in Cabinet were ongoing.

A special advisory group appointed by Social Protection Minister Joan Burton recommended the cuts, which could save the department €200m a year.

A department spokesman said the minister was currently considering a report from the group.

"The aim of establishing this group was to harness expert opinion and experience in order to address a number of specific issues and make cost-effective proposals for improving employment incentives and achieving better poverty outcomes, particularly child poverty outcomes," he added.

Sean Healy, director of Social Justice, an independent non-Government organisation, said there were many alternatives to slashing the benefits, such as targeting the wealthy and investing in jobs.

In its alternative Budget, the group said a tax of a third of a cent on every text message would raise €40m per year. And it said a tax on "bad nutrition" ingredients would raise €15m.

It also called for a 2.5pc tax on business profits - in a direct challenge to the Government's insistence that our 12.5pc corporation tax rate will remain unchanged.

Dr Healy completely rejected means-testing child benefit, insisting it would be unfair for a household of four to be out of pocket compared with a household of two.

"What is the Government proposing to do, take money away from the household of four and not touch the household of two? It seems to me that would be perverse," said Dr Healy.

Social Justice Ireland will present its proposals to Government ministers, TDs and advisers over the next three months.

It claimed the Government has protected the wealthy at the expense of low to middle-income families for too long.

Dr Healy insisted its proposals would shore up the €3.5 billion in savings required to help plug the deficit, keep Ireland's debt masters the Troika at bay and ensure fairness for everyone.

"It's completely unacceptable that the Government continues to introduce proposals that benefit the rich at the expense of the rest of us," said Dr Healy.

Dr Healy said analysis shows the poorest took the biggest hits taken in Budget 2012 - through cuts to social welfare and child benefits, hikes to VAT and the introduction of a flat-rate household charge.

He also accused the Government of favouring rich bankers and bondholders, by heaping their debts on to the normal taxpayer.

"Favouring the rich at the expense of the rest of us is unjust, unfair, unacceptable and unnecessary," he said.

Social Justice Ireland also rejected Government plans to introduce a value-based property tax in July next year.

Dr Healy said a site valuation tax would be fairer - meaning householders pay in accordance with the public services they have access to in their area.

"The taxpayer has invested large amounts of money in an area that has lots of public services, such as a Luas stop or train line for example," he said.

"But I as a taxpayer may not live in that area. I might live in the Wicklow mountains with no access to a proper road. So why should someone else get the benefit?"

The organisation also suggested pension reforms, including a change to the current tax break system that sees 80pc going to the richest 20pc.

It recommended introducing a standard rate and making it available at 20pc to all. Money saved would then pay for a universal pension, meaning everyone over 65 gets the same amount.

Among its other recommendations was an end to austerity with a €7bn investment plan over the next three years.

Half the money would be taken from the National Pensions Reserve Fund and credit unions, and applications made to the European Investment Bank and the Council of Europe Bank to match it.

Dr Healy said: "Without investment, there will be no jobs. Without jobs there will be no recovery. And without recovery, Ireland will continue along this path of austerity."

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business