While Budget 2023 contains several positive measures, it falls short in terms of protecting low-paid and low-income households from the highest inflation rates in almost four decades.

That was the verdict of ICTU general secretary Patricia King following Tuesday’s Budget announcements.

Patricia said that, with Inflation currently running at 9% - the highest level since 1984 - and the Government forecasting a headline rate of 7% next year, and up to 40% of households already experiencing energy poverty, new tax measures haven’t been targeted at those who need them most.

She said low-paid workers and households living on fixed social welfare rates will see a decline in real incomes.

“One in five workers is low paid, the highest rate in western Europe. Almost one million income earners, one-third of all income earners, receive too little to pay tax, and the national minimum wage is the third lowest of the 21 EU countries with such wages.

“The grossly inadequate 80 cent increase in the minimum wage, and the €12 increase in core social welfare rates, will mean that low-paid workers and households living on fixed social welfare rates will see a decline in real incomes.

“By contrast, the €3,200 (8.7%) increase in the standard rate cut-off point is in line with inflation. The one million income earners who receive too little to pay tax, and the vast majority of the 1.2 million who pay at the standard rate, will not benefit from this measure, which will disproportionately accrue to the better off,” she said.

Patricia added that this measure, which is to cost almost three-quarters of a billion euro, should have been accompanied by additional revenue-raising measures from higher earners: “These measures are not targeted at those who need them most.

“The Government’s overall approach runs counter to the report of the Commission on Taxation and Welfare which advised against any further narrowing of the tax base.

“ICTU does acknowledge that a number of positive measures were announced today, including the reduction in early years’ fees, the continuation of lower public transport prices, the introduction of free school books, and reductions in health charges, amongst others. These are steps in the right direction.

“However, the decision not to focus first and foremost on those who most need help will mean that low-paid workers, households trying to get by on inadequate fixed incomes, will see a further fall in their living standards this year and next,” she said.

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