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10/12/2010

'Hardest Hit' In Budget Claims Follow Cuts

There is some disagreement over which sections of society are being hardest hit by Tuesday's budget.

After a mixture of increased taxes, cuts in social welfare spending and changes to the PAYE system, a number of different calculations have emerged, with Opposition parties, Unions, and worker's groups thoroughly convinced that the poor have been much harder hit.

Labour Spokesperson on Finance Joan Burton called the budget a "bonanza" for self-employed people earning over €200,500, while SIPTU General President Jack O’Connor accused the Finance Minister's plan of "insulating the rich".

During a Dáil address yesterday, Taoiseach Brian Cowen said the Budget "bears evenly on people, and strives to share the burden fairly," and that he accepted the argument that the Government should start at the top before announcing he was cutting the Taoiseach salary by €14,000.

However, speaking last night, Ms Burton said that people on the minimum wage were set to lose €39 per week when it is reduced, and people who depend on welfare are taking an €8 hit, while those with "super sized pay packets" would actually be better off.

"According to the Deloitte tax calculator 2011, all single, self-employed people earning over €200,500 will be in the black after yesterday’s budget.

"Above this level of earnings, the positive effect of the abolition of both the health levy and the income levies outweighs the combination of increased tax, PRSI and Universal Social charges, leaving them better off."

Meanwhile, Fine Gael Innovation Spokesperson Deirdre Clune this morning described the Budget as a needless attack on the lowest paid that "will damage the economy".

“By cutting the minimum wage by €1 per hour, and applying the new Universal Social Charge to those on annual incomes as low as €4,000, the Government has needlessly attacked the lowest paid workers in our society for no economic or social benefit.

“This double impact will see working families cutting back further on their spending and reducing economic activity in our already weak economy.

Irish Small and Medium Enterprises (ISME), who were largely in favour of the social welfare reductions said this morning that while it could be argued reducing the minimum wage and social welfare would assist in reducing unemployment, the reality was that this will have minimal impact unless other factors, including the overall cost environment to business, are addressed.

"The Budget failed to address this and if anything made matters worse by increasing costs to business, through tax increases, increases in excise duties and the reduction in pension’s relief,” Chief Executive Mark Fielding said.

A delegation of minimum wage workers will present a petition to TDs today asking them to vote against proposals to cut the minimum wage to €7.65.

The proposed cut is contained in the Financial Emergency Measures In the Public Interest Bill 2010, due to be voted on in the Dáil on the 9th & 10th December.

(DW)

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