Fianna Fáil has today unveiled its pre-budget package for 2016 which contains a range of measures to reform the tax system, help working parents and provide for investment in public services. The party also re-stated its commitment to honouring in full the budget rules that are now incorporated in to national law.
Fianna Fáil Finance spokesperson Michael McGrath TD stated, “The total income tax take in 2015 will be over one third higher than 2007, while other taxes have not yet recovered to peak levels. This demonstrates the extent to which correcting the public finances has fallen on employees. Reducing the burden of income tax must be a priority for 2016.
“We are proposing an increase in the personal tax credit of €100 for a single person (€200 for jointly assessed married / civil partner couples) combined with a substantial increase in the range of income covered by the lower USC bands.
“This is worth €293 to a single person earning over €21,076. Unlike last year’s budget, it spreads the benefit of tax reform fairly across all income earners. This is important, as when Michael Noonan was raising taxes, he applied flat tax hikes across the board. We are also determined to help parents with the cost of childcare. We are introducing an easy to understand tax credit for working parents to cover 20% to 40% of a family’s costs of childcare.
“Under this scheme, a parent earning up to €40,000 will be eligible to receive 40% of their childcare costs up to a ceiling of €5,000 via a tax credit, parents earning between €40,000 and €50,000 per annum would be eligible for 30% support, while parents earning between €50,000 and €60,000 would be eligible for 20% support. This will be a huge help to families as in many cases their childcare costs are greater than their mortgage. We estimate this will help over 65,000 working parents. We are also proposing reductions in DIRT tax and the capital taxes, alongside a 33% increase in inheritance tax thresholds.
Deputy Sean Fleming, spokesperson on Public Expenditure and Reform stated, “This government’s record in four key domestic issues, housing, healthcare, mortgages and water, has been abysmal. We need to rebuild our public services across a range of areas from hospitals to housing, education to social protection. 2016 represents a chance for us to begin this process.
“We are proposing a number of priority measures including:
An increase the rent ceiling by between 5 and 15% (average 10%) for rent supplement recipients in areas where pressure on rents is putting families at risk of homelessness.
The re-establishment of the National Treatment Purchase Fund and additional cash to tackle hospital waiting lists.
An increase in the old age pension rates by €5 a week and child benefit by €5 a month.
A reduction of 1 point in the pupil teacher ratio at primary level and a reversal of the cuts to small rural schools.
“Irish Water has been an unmitigated disaster. Despite massive set-up costs and millions spend on consultancy, the overall amount of investment in water infrastructure continues to be well below the levels needed. Failing the Eurostat test has defeated the very purpose of the establishment of Irish Water; and, as a result of the water conservation grant, this government is in the unique position of introducing a tax that actually costs rather than raises money. We will end the scandal that is Irish Water and replace it with a fit for purpose, efficient National Water Directorate,” concluded Deputy Fleming.
Deputy Dara Calleary, spokesperson on Jobs, Enterprise and Innovation stated, “There is no room for complacency in relation to employment levels. Unemployment in Ireland has fallen in recent years but the broad jobless rate is 18% when account is taken of the official number of unemployed people, together with the number of people on activation schemes and part-time workers who would like to work full-time. We need to foster a strong domestic enterprise culture.
“A number of parties are now trying to jump on the bandwagon of helping the self-employed. This is an issue we have been highlighting for over 3 years.
“Our key proposals are:
Implement a phased introduction of an Earned Income Tax Credit for the Self-employed equal to the value of the PAYE tax credit, beginning with a credit of €500 in 2016.
Incentivise entrepreneurs to set up new businesses by providing tapered relief from capital gains tax. A reduced rate of CGT of 15% should apply to entrepreneurs who subsequently sell their business.
Address the lack of credit which is holding back many businesses from expanding, through the introduction of tax relief for individuals making loan capital investments to SMEs.
Extend PRSI benefits to the self-employed on a voluntary basis.”