Galway East Deputy Colm Keaveney has blasted last week’s Budget measures as “regressive”, saying he has “grave concerns” over the impact it will have on low and middle-income earners.
The Labour Party Chairperson turned on his party in criticising the coalition Government’s Budget 2013, pinpointing the abolition of the PRSI exemption and the cut to the carer’s respite grant as two of the most unacceptable features.
His comments have also been publicly backed by several Labour colleagues in the last number of days, leading to speculation over the outcome of the vote on the Social Welfare Bill, due to take place tomorrow.
Speaking in Tuam on Monday, Cllr Keaveney said he had major concerns over the impact that the budget would have on social justice and the domestic economy, calling for several changes to be made as a matter of urgency.
“The first choice is to bring forward the changes to the tax reliefs on pension contributions with respect to top earners. The urgency with which the Government is moving to implement measures that will impact on low and middle earners must be matched with an urgency for measures on top earners,” he said.
“As both parties have already agreed to this measure, there seems to be little reason not to move on it immediately. Any delay will only be of benefit to accountants, as it gives them ample time to plan avoidance measures.”
Deputy Keaveney said that bringing this forward would generate €125 million, which could then be used to offset some of the impact of the PRSI exemption measure and “other odious measures” in the budget.
The Galway East TD also proffered an alternative of taxing child benefit, adding that he did not accept that it was “impossible” to implement the legal and technical measure necessary to implement this.
“Both Government parties were elected on a reform agenda and have a large majority. This measure would generate €395 million in one full year compared to the €142 million generated by a blunt cut. From that €395 million, €142 million could have been banked and the rest used to fund the implementation of the measure and the balance used to offset the impact of taxing child benefit to low and middle income groups.”
He said the economic impact of a reduction in the spending power of lower and middle class income groups was “of grave concern”, given the likely effects on an “already fragile” domestic economy.
“Many small business owners and managers have already been in contact with me sharing their fears for the year ahead. We simply cannot afford to take actions that will place any further jobs in the domestic economy at risk. The impact on people’s well being, but also on the resulting increase in spending on social welfare, must be given due importance.”
Deputy Keaveney is demanding that an expert report on the reform of child benefit payments be released immediately and called on the Government to reconsider some of the budgetary measures “having reflected on the reaction of both the body politic and the wider public”.