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2004

Budget must deliver Sustaining Progress commitments as a minimum

Date Released: 20 Nov 2004

"Budget 2005 will be the litmus test of the substance, if any, of the recently 'people-centred' utterings emanating from the Taoiseach and others," said SIPTU General President, Jack O'Connor. "We have been told to expect a Budget that will reflect a Government change of heart from the previous adherence to the business agenda," he said. "If it matches up on the social side to the expectations now being encouraged in that respect, we will welcome such progressive measures.

"the Government record on personal taxation has been a sorry one to-date. Not alone has the burden of giving more rewards to business, been levied on the PAYE sector, but this Coalition's priority of giving maximum relief to those who already had the maximum of incomes, meant that the burden falls on both lower and middle income families.

"SIPTU's critical and principle demand to increase tax credits by €550 at a cost of €700m is no more than what is needed for the Government to fulfil its commitments on personal taxation.

"For low paid workers on €350 a week and over, who are suffering because the health levy threshold has remained frozen since 2000 - delivering our demand to increase it to €479 at a cost of €90m - is also required. Similarly our demands to increase the income exemption level for PRSI and the PRSI-free allowance, are essential for meeting the commitments contained in Sustaining Progress.

"And what greater scandal could there be than the Government's abysmal failure on childcare? Failure to make adequate childcare provision and its prohibitive cost where it is available, is drawing more and more young women back out of the workforce. And is it any wonder? Childcare costs in Dublin amount to more than one half of average female industrial earnings which is why SIPTU is also demanding tax relief on childcare costs.

"We totally reject any suggestion that if we insist on the delivery of such expenditure commitments, then we should forego pursing the Government's commitments on delivering a fair taxation system. This is a false choice - particularly in the light of an extremely healthy public finance environment. There must be an adequate tax base for the healthy provision of public services. We could have already had that, if this Coalition had not been so intent on pursuing an agenda of giving more and more hand-outs to the business sector by halving the rate of capital gains tax from 40% to 20% in 1998; reducing employers PRSI in 2002; reducing the rate of Corporation Tax from the 20% rate argued for by ICTU to 16% in 2002; and reducing that same Corporation Tax still further to 12.5% in 2003.

"The cumulative effects of these unnecessary handouts to the corporate sector will result in a loss to the Exchequer of the order of €3.5bn by next year," he concluded.

Mr. O'Connor was speaking at the Union's Midland and South East regional conference in Waterford today.





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