The proposals contained in the Congress submission are designed to protect the most vulnerable communities and individuals, while at the same time supporting jobs and growth.

Congress has proposed €2.15 billion in public spending (€1.43 billion) and tax (€720 million) measures aimed at supporting economic recovery and restoring living standards for many vulnerable groups, including low and middle income workers. It has also proposed to raise a minimum of €650 million from various reforms to taxation, bringing the proposed fiscal adjustment in net terms to €1.5 billion, consistent with the ‘fiscal space’ for Budget 2016 outlined in the Spring Economic Statement.

The Congress submission proposes a range of measures including:

• Funding for subsidised childcare
• Equality-proofed reforms to the Universal Social Charge (USC)
• The reversal of several spending cuts, including those affecting young people, pensioners and lone parents
• Increases in welfare rates within the specified spending parameters
• The introduction of a net wealth tax
• The borrowing of €1 billion for ‘off-the-books’ investment in capital projects
• The exclusion of capital spending from the rules governing the Stability & Growth Pact. Congress said the EU fiscal rules are “too restrictive, opaque and based on a flawed methodology.”

Congress highlights the fact that the current economic recovery, still in its very early stages, comes with “key public services stretched, state sponsored family supports diminished and core welfare rates cut.” It says that deprivation levels have skyrocketed since the beginning of the crisis while over 200,000 people remain in unemployment. The submission states that “The economic recovery must be an inclusive one that benefits everyone in society.”

National Economic Dialogue

The pre-budget submission formed the basis of ICTU’s contribution last week to the two-day National Economic Dialogue which took place at Dublin Castle. Established as “an open and inclusive exchange on the competing economic and social priorities facing the Government” in preparation for Budget 2016, the talks included representatives of community, voluntary and environmental groups as well as opposition parties, business, research institutes, the academic community, the diaspora and trade unions.

In his report to the Government, the chairman of the National Economic Dialogue, Professor Alan Barrett, said that few if any delegates at the talks supported the Government argument that reductions in income tax would support economic growth and that many participants were “less inclined” to agree with the Government’s proposed 50/50 split between spending and tax cuts. He also said that no delegates had argued for the €1.2 billion to €1.5 billion target to be exceeded in the budget.

You can download the ICTU pre-budget submission HERE