Warning Over Effect of McCarthy Tax Plan

Last week 17 member organisations of the Irish voluntary and community pillar held a joint press conference in Dublin to warn that the recommendations contained in the McCarthy report would “decimate public services and severely affect poor and vulnerable people” if they were to be implemented.

Recommendations in the separate report of the Commission on Taxation that child benefit be taxed was described at the same event as “a scandal”, while 111 tax breaks were still available. The comments were made by Ivan Cooper and Fr Seán Healy respectively, on behalf of 17 members of the community and voluntary pillar, one of the five sectors in the social partnership process.

Ivan Cooper, who works for The Wheel organisation, said members of the pillar were “particularly concerned that all the energies of Government appear to be directed towards rescuing those that created the current problems – and none whatever on protecting services for vulnerable people.”

Commenting that the only developing policy “seems to be a menu of cuts in services which will involve further unnecessary hardship for vulnerable people,” he said this was “profoundly unfair and unjust”. Members of the pillar demanded “that those who are most vulnerable in Irish society ... must not be sacrificed to budget stabilisation measures”.

They called for detailed analysis of the effects on vulnerable people of implementing recommendations in the McCarthy report and for the elimination of the 111 tax breaks identified by the Commission on Taxation. Such would help ensure “that vulnerable people do not end up paying for the consequences of the many poor decisions taken by others,” he said.

They also called on the Government to implement a five-point social and economic plan to protect the vulnerable. It would involve increasing the tax take through broadening and deepening the tax base but not through increasing income tax. Better value in public services must be secured, reform of the public sector and targeted spending cuts to protect the vulnerable.

Fr Seán Healy of Social Justice Ireland noted that Ireland has one of the lowest tax regimes in the developed world. “The community and voluntary pillar believes Ireland should remain a low tax State,” he said, but that the 111 tax breaks were “a scandal which needs to be rectified. He pointed out that “tax breaks are tax expenditure”.

OECD recommendations should be followed where public sector reform was concerned, leading to a more person-centred, integrated system, he said, while cuts in spending should be targeted. The pillar “rejects totally” recommendations in the McCarthy report that suggest the vulnerable should pay, he said. He also queried ongoing Government commitment to spending billions on capital expenditure programmes.

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