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Campaigners set out plans to save public purse billions

More than €2bn could be raised for the public purse by overhauling pension tax breaks and introducing a small levy on company profits, campaigners said today.

Social Justice Ireland also wants text messages taxed as part of its alternative Budget which it says would create 100,000 part-time jobs for the long-term unemployed.

Other proposals include a student loans scheme to pay for third-level fees and a tax hike on gambling which would go towards higher social welfare payments.

Fr Sean Healy, director of Social Justice Ireland, said their plan would make €3bn savings in a much fairer way than has been done to date.

"The Government has made a complete mess of the banking crisis, to a point where it will cost us billions for years and years," he said.

"Secondly, it has over the last three Budgets savaged poor people so as to protect the richest.

"Thirdly, it has vandalised the economy. That's some achievement over three Budgets and I don't think it should continue."

Fr Healy said pension tax breaks - with a 20pc rate on lower incomes and a 41pc rate for higher earners - unfairly hit the less well-off.

This means four fifths of the benefit goes to the richest fifth, he said.

Introducing a standard rate would make a €1.4bn saving for the State finances, under the proposals.

A 2.5pc levy on all corporate profits - over and above the existing 12.5pc corporate tax rate - would raise another €632m.

Fr Healy insisted there was no evidence to suggest companies would leave Ireland if forced to pay a levy on their profits.

Social Justice Ireland also proposed:

- A 0.33 cent tax on text messages, raising €25m;

- An overhaul of tax breaks - as recommended by the Commission for Taxation - to save €552m;

- Long-term jobless given part-time jobs in public and voluntary sector, earning the equivalent of social welfare payments;

- An increase in social welfare payments of  €5 a week for single people, and €8.50 for couples;

- Student loans to cover third-level fees and living costs, saving €445m.

Hitting out at the "macho" mindset intent on slashing public spending, Fr Healy said he agreed with the need to cut drastically Government borrowing.

But he insisted it could be done over a longer timeframe and did not need to be completed by 2014 - the Government's target.

PA Media