'Something for everyone budget' means spoils are spread too thin - Union criticises 'missed opportunity'
Certified Public Accountants in Ireland welcome the "pro-business elements"
Cuts to the three lowest bands of the deeply unpopular Universal Social Charge (USC) have been criticised as a missed opportunity.
Minister Michael Noonan announced that half a percentage has been chopped off the three lowest rates of the Universal Social Charge (USC). This means that a worker on €50,000 will gain an extra €5 a week as a result.
The 5.5pc rate - which affects thousands of middle income earners - is to be reduced by 0.5pc.
And the two lowest rates - 3pc and 1pc - will be cut by the same.
Finance Minister Michael Noonan said medical card holders and those over 70 will now pay a maximum of 2.5pc USC on their incomes.
However the The Civil, Public and Services Union (CPSU) has described the budget as "a missed opportunity" to target the limited available fiscal space to those in most need.
Criticising the ‘spread it all around’ approach the union said it would have preferred a more narrow distribution to those on lower incomes with much greater emphasis on social housing provision, childcare costs, improved public services resources and extending the lower USC band rather than the 0.5%reduction of the middle and top bands.
“By attempting to give something to everyone the Minsters have ensured that few will notice any significant change “ said General Secretary Eoin Ronayne adding “we would have preferred to see a much tighter focusing of the distribution of available funds to those on lower incomes with childcare and housing pressures”.
Mr Ronayne said “this is a weak attempt to create a feel good factor for as many as possible but because it’s been spread so thinly none will feel good when the details are fully understood by the public”.
His comments were echoed by the Irish Congress of Trade Unions (ICTU) who claimed the budget "lacked the ambition needed to begin process of repair".
Congress General Secretary Patricia King said: “We saw some small steps but the budget lacked the ambition needed to begin rebuilding, which is so vital after years of diminished living standards.”
She added: “The best way to boost living standards would have been to prioritise the rebuilding of public services over tax cuts.
“Perhaps the major flaw in Budget 2017 was the decision to forgo €620 million in taxes through the continued VAT subsidy to the tourism and hospitality sector.
“That money could have built 3000 affordable homes for people. Despite high profits, the sector continues to have the highest number of Minimum Wage workers in the economy and the employers refuse to engage with the Joint Labour Committee,” Ms King said.
Meanwhile the Institute of Certified Public Accountants in Ireland (CPA Ireland) said it broadly welcomed the "pro-business elements" announced in the budget.
Commenting on the budget David Fitzgerald, Director of Membership Services, CPA Ireland said: “Today’s budget announced by Minister Noonan has demonstrated a commitment towards supporting businesses to lead economic growth, while maintaining a prudent approach. Indigenous companies have contributed to three out of every four new jobs created here since 2011, and so we welcome the focus on supporting this sector SMEs.”
He said the CPA have consistently called for an end to the "tax discrimination" against the self-employed which they claim would encourage increased levels of entrepreneurialism.
"The increase of €400 in the earned income tax credit for the self-employed, while a positive step, is below what had been signalled previously. It is important that the Government continues to demonstrate ongoing commitment to end this imbalance. This would help to create jobs in start-ups and SMEs and we look forward to this good work being continued in the coming years."
Minister Noonan announced that the the Capital Gains Tax on start-up business is to be halved to 10pc on gains of up to €1m.
Mr Fitzgerald said he welcomed this but said it didn't go far enough. "The equivalent threshold in the UK is £10million, for the measure to have a widespread impact for SMEs it must be increased."
He concluded: “For small and medium enterprises retaining talented staff is always a key priority. The introduction of new supports for the cost of childcare will help do this, and may also attract some stay at home parents to return to the workforce.
"The reduction in the rates of Universal Social Charge is also a welcome development as it will reduce the cost of creating employment and supports all workers across the economy.
"However we will continue to urge that more is done to ensure the economy is not over reliant on higher income earners.”