Morgan outlines Sinn Féin concerns with Finance Bill
Sinn Fein Economic Spokesperson Arthur Morgan TD this afternoon outlined some concerns his party has regarding the Finance Bill. While welcoming some of the measures included in the Bill, such as the 3% levy for earners of above €250,100, Deputy Morgan said there are no new ideas included to revive the economy or create jobs. He also said the 5,000 or so Irish citizens who avoid tax through the non-residency provision should not enjoy the benefits of Irish Citizenship.
Deputy Morgan said, "Amid the news that the Irish economy could contract by up to 4% over the next 2 years yesterday's publication of the Finance Bill offers no new ideas in reviving the Irish economy and providing the foundations for job creation. We are still waiting for a strategy to stimulate the economy. While we welcome certain amendments to the Budget such as the 3% levy on incomes above 250,100 and the closure of the Cinderella loophole, low income and middle income earning families have been disproportionately targeted by the Finance bill.
"The levy of 1% for low and middle income families coupled with the increase in VAT to 21.5% will cost families over a €1000 in 2009 and suck hundreds of millions out of the Irish economy. People on low incomes should be exempt from the income levy. The 1% income levy should only apply for incomes in excess of €38,000. Sinn Féin believes that the Government could have avoided imposing the levy on low income families if it had implemented measures such as removing of the PRSI ceiling.
"We support the 2% income levy for incomes in excess of €100,100. While we welcome the levy of 3% for earners of above €250,100 as going some way to ensure that those who can most afford to contribute to public finances do so, we believe that the threshold for the 3% levy should apply for income in excess of €200,100.
"The increase in VAT from 21% to 21.5% is a regressive measure which is likely to cost families up to €250 next year. This eats into the budgets of working families at a time when they already have to cope with health care increases and a hike in third level fees imposed by this Government.
"The increase in VAT will also adversely affect consumer spending, which is vital to reviving the economy. Any increase in revenue that the Government would have anticipated is likely to be negated by a further erosion of consumer confidence. This will have a severe effect on the retail sector. According to the latest CSO data retail spending has sharply declined. The further hike in VAT will only exacerbate the situation. We had advocated a 2% reduction in VAT to boost the incomes of low and middle income earning families while enhancing consumer spending.
"The FF/Green Government has once again demonstrated their commitment to privatising the health system through the widening of tax relief for private hospices developers. The reduction in the criteria for for-profit palliative care units to qualify for tax relief, from 20 beds to 8, clearly demonstrates the Governments commitment to leave even the dying in the hands of private investors.
"While we agree in principle with the Car Park Levy we do not believe that this measure has been well thought out and the wording should be considered more carefully. The levy in its current form encourages people to avoid the scheme and in the absence of a proper public transport programme it is ineffective.
"We support the long overdue removal of the Cinderella tax loophole; however we feel that this is not sufficient in reigning in the 5,000 or so Irish citizens who avoid tax through the non-residency provision. We firmly believe that people should not be entitled to the benefits of Irish citizenship while avoiding taxation through the tax residency rule. We believe that a more substantial change is needed and that this closing of this loophole does not go far enough." ENDS