3 December 1997
Budget widens gap between the haves and have nots
Sinn Fein Representative for Dublin South West, Seán Crowe, this evening described Charlie McCreevy's budget as a missed opportunity failing as it does to remove the inequities of our tax and social welfare systems.
Mr. Crowe said:
``This afternoon's Budget from the Fianna Fáil/Progressive Democrat Coalition has failed entirely to live up to peoples expectations. While promising much Minister Charlie McCreevy in the end merely perpetuated existing inequalities. The most disappointing part of this budget was that the government missed out on an opportunity to move towards removing the inequities of our tax and social welfare systems.
``He rejected pre-budget recommendations from groups such as the Combat Poverty Agency, which were supported by Sinn Fein, to increase personal tax allowances by £1,000 for a single person and £2,000 for a co-habitating couple. This would have cost £486 million well inside the £500 million benchmark. Instead he upped the allowance by only £250 and decreased taxes on the 26% and 48% by 2%. This will help many workers but makes sure that the top earners get a disproportionate benefit of the tax cuts.
``Sinn Fein welcomes the cutting of income tax but believes that the low paid should be the principal beneficiaries of any change. The government also failed to use the opportunity to introduce a minimum wage which could have assisted, in particular, the large number of young people who are forced to work for very low wages.
``The Minister then matched the cuts in the top rate of income tax by slashing capital gains tax in half to 20%. This was the only element of the tax regime that remotely approaches the need for a wealth tax and the Minister had the brass neck to reduce it. Corporation tax which is already lower than income tax has been cut by 4% to 32%. The influence of the Progressive Democrats element in government is clear in these proposals where the rich have got richer and the poor are not any better off. Sinn Fein had called on the government not to reduce the already low corporation tax but to raise the exemption threshold for small businesses to promote employment.
``The £3.00 increase in unemployment benefit while welcome will ensure that those dependent on social welfare will continue to endure poverty and deprivation for another year. Sinn Fein had called for an increase in a single person's unemployment allowance to £75 immediately in order to bring the allowance up to the level identified by the ESRI `Poverty in Ireland' report of 1994.
``There were some positive elements in the budget particularly the improvement in allowances for widows, carers and disabled people and the £3,000 tax allowance for long-term unemployed returning to work.
``However at the end of the day the government's promise to deliver substantial tax reform was reduced to winning middle class votes. This ensured another budget which ignored the plight of those in greatest need. A budget which will do nothing to ease their financial pressure, a pressure which is multiplied many times over for anyone caught in the spiral of poverty.
``This budget will maintain exclusion, inequity and unemployment. It was another missed opportunity.'' ENDS.
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