Budget 2016 contains a number of positive measures that will see workers make the first real financial gains from a budget in almost eight years, according to SIPTU researcher, Ger Gibbons.
The public spending commitments, including the restoration of the Christmas bonus by 75% for hard-pressed social welfare recipients, will help to improve the living conditions of some of the most vulnerable in society, he said. The increase in the minimum wage, the restoration of the respite care grant and the extension of free childcare are also important initiatives for working families.
“Public spending increases in health and education will help to relieve pent-up pressures in these areas. The decision to address the PRSI ‘step-effects’ which acted as a disincentive for employees with an annual income of €18,300 to work additional hours or to seek a pay rise is a further positive measure. Budget 2016 however represents in many ways a missed opportunity to make real inroads into the continuing social damage caused by the crisis.
“The union has argued over recent months that the resources that become available as the economy recovers should be allocated over the medium term in a 2:1 ratio, with two-parts going towards rebuilding public services, and one-part towards tax reform, targeting low to middle income earners.
“Thereafter, the focus should exclusively be on providing the public services that Ireland now needs. The Government’s decision to opt for a 50:50 split leaves insufficient resources, despite the many increases announced today, to start repairing the damage of recent years particularly in public health and housing.
“On the taxation side, we are disappointed that the Government did not move to replace the Universal Social Charge with a progressive Social Solidarity Contribution and accompanying tax credit of €775. While income earners will gain from the changes to the USC announced by the Government today, the fact remains that the more you earn (up to a limit of €70,000), the more you will gain from these changes. However, over 40,000 low income earners will be taken out of the USC net.
“We welcome the reversal of some of the most egregious cuts implemented from 2008 to 2014 but are disappointed that others, such the cut to the standard Jobseekers’ Allowance for those aged 26 and under and the abolition of the transitional pension, were not addressed.
“In the context of the budgetary provisions, the failure to rectify the injustice perpetrated on workers who retire at 65 years of age and who have contributed for years to the State is unacceptable and is a glaring omission in the Budget in the context of a growing economy with increasing Exchequer revenues. The effect of the failure to ameliorate the loss of the Transitional Pension will continue to cause undue hardship to workers retiring and their families,” Ger Gibbons added. He said that SIPTU will continue to campaign for the reversal of these measures.