Government should abandon planned tax cuts - Ictu

The Irish Congress of Trade Unions (Ictu) has called on the Government to increase public spending and scrap planned tax cuts in its pre-budget submission.

The congress also said that increases in employer PRSI should be used to bolster Government revenue, once the economic effects of the pandemic start to fade after 2022.

The submission also states that the the wage subsidy scheme should be transformed into a short-time work scheme, whereby the state supports workers in sectors hit by a reduction in demand.

Ictu says the aviation sector would be an ideal fit for a such a scheme, especially while it recovers from the pandemic.

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Other suggestions included introducing a statutory entitlement to paid training leave and raising the national minimum wage to at least €10.50 in January 2022.

Ictu urged the Government to make it a criminal offence for employers to wilfully misclassify a person as self-employed.

With regards to taxation, the trade union groups called for a net wealth tax on households with net assets worth more than €1 million.

They also wanted to see greater tax contributions from inherited wealth through reforms to capital inheritance tax (CAT) tax rate, and an increase in the rate of local property tax on nonprincipal residences and on properties worth over €1 million.

Certain goods

Increases to excises on certain goods, such as diesel, cars, single-use plastics, tobacco and betting products should also be considered in Budget 2022, according to Ictu.

Ictu also pointed out that compared to other western countries, Ireland has one of the lowest levels of public spending.

The submission suggests that increases in public spending should be prioritised, and the tax cuts set out in the Summer Economic Statement should be abandoned.

“The indispensability of basic public services and of the welfare state was brought into sharp focus and we need a “new deal” or new economic model to ensure a safe and secure future for all,” the submission stated.

According to the submission, Ireland’s old “tax avoidance-based FDI strategy” will come under threat due to international changes, and investment needs to be made in public services and infrastructure.

Ictu also says the Government should borrow now, while the interest rates are low, to invest in rebuilding the economy and supporting the green and digital transitions.

They urged the Government to invest in the health service, early years care for children, education, a just transition for the environment and public housing.