Fianna Fáil Spokesperson on Finance Michael McGrath has described the ESRI report on the impact of Budget 2015 as a sharp reminder of the inherent unfairness at the heart of the government’s budgetary policy. This was the fourth budget introduced by the Coalition and their cumulative impact has been to put the heaviest burden on those least able to manage it.
Deputy McGrath stated, “The ESRI’s report is much more realistic than the tables that were produced by the Government on budget day as they explicitly take into account the impact of water charges. The claim by Ministers that everyone would be better off as a result of Budget 2015 has been comprehensively demolished by the ESRI report. The results show that budget 2015 does not pass the test of being fair and balanced as the lowest income households will be worse off in 2015. The bottom 10% of families are worse off by over 1% while top earners gain the most with an average benefit of 0.6%.
“Today’s report confirms a consistent pattern of the Government hitting low earners hardest. While the Government claim not to have increased income tax over its lifetime, the abolition of the PRSI allowance in 2013 cost every worker €264 a year, clearly illustrating the regressive nature of this Government’s policies. The Local Property Tax was introduced in a manner that failed to take account of ability to pay issues such as mortgage arrears or low income. Previous ESRI reports showed that the poorest households were worst affected by increasing the standard VAT rate from 21% to 23% by the current Government. All of this confirms the view that Labour are merely propping up a Fine Gael government that are focused solely on protecting the interests of high earners.
“The Programme for Government promised to maintain “social welfare rates”. There was no mention that this only applied to “core rates” which the government now claim to justify the raft of cuts to child benefit, the respite care grant, one parent family payments, the household benefits package and maternity payments. The elderly and those dependent on social welfare have fared particularly badly under this government.
“As the ESRI report focuses on the impact of policy decisions relating to taxes and transfers, it does not capture the impact on households of cuts to services such as health and social care. The savage cut to medical cards provision in 2014 along with cuts to supports for elderly people have a particularly harsh impact on low income families as they rely disproportionately on public services. By contrast the report also confirms that the actions taken by the previous government which represented 70% of the adjustment to date were considerably fairer with the majority of measures focused on higher earners.”