Mandate warns Minister for Finance ‘income tax changes won’t fool our members’

Mandate Trade Union General Secretary John Douglas has warned Minister for Finance Michael Noonan that plans to widen the income tax bands in the upcoming Budget, which are being portrayed as beneficial to low and middle income earners, won’t fool Mandate members.

Mr Douglas says the government’s plans will do nothing to benefit the average worker In Ireland and will be counterproductive for low-paid workers.

Workers currently begin paying the high rate of income tax (41 percent) at €32,800, but the Minister has indicated that he wants to “take people out of the higher tax bracket”, which means moving the band up to an estimated €36,000. It is likely this will only benefit the top 20-30 percent of earners.

Mr Douglas said, “More than 50 percent of workers in Ireland are paid less than €32,800 so any increase in the tax band will not be beneficial to them.”

Mandate believe the introduction of water charges in January, which will impact most on the lowest earners and those dependent on social welfare, will be used to supplement tax reductions for the highest earners creating greater inequality. Mr Douglas said this is “totally unfair”.

“Even if a worker earns €36,000 now and they see a slight reduction in their income tax returns, the government will take it back through the introduction of the water charges. In all likelihood, they’ll also see a reduction in public services. However, the real beneficiary of this policy will be those on very high incomes who don’t rely on public services and social transfers,” said Mr Douglas.

He added, “Our members depend on public services, they depend on social welfare transfers and they depend on a decent public education and healthcare system. These are all funded by the exchequer so when you give tax breaks to the top 30 percent of earners, somebody else will have to pay or else we’ll see depleted public services.”

“Our public services are already stretched to breaking point. 39 families in Dublin lost their homes last month and yet funding is being cut for homelessness services. Our healthcare and education systems are underfunded. Reducing the tax burden for high earners is not the right option and our members know it.”

Mr Douglas concluded by issuing a challenge to Minister Noonan:

“If the Minister really wants to get the domestic economy going again; he should focus on increasing the spending power of low-paid workers who spend all of their income in local shops, restaurants and local businesses. This can be done by increasing the minimum wage, introducing refundable tax credits and/or facilitating real collective bargaining through trade unions.”