VAT changes 'significant' but the government fails to tackle the housing crisis

9 Oct 2018

Congress Pre Budget Submission 2019 Congress Pre Budget Submission 2019

9 October 2018

 

 

Congress General Secretary Patrica King has welcomed the abolition of the reduced VAT rate for Hotels and Restaurants calling it “a significant measure”.

The General Secretary said “the abolition of the reduced VAT rate for hotels and restaurants is something which Congress has campaigned for over a number of years, and is undoubtedly a step in the right direction”. The full year €560m benefit in VAT receipts could be used to build 2,800 homes a year or to double investment in childcare, one of the best investments any society can make in its future.

She said “the Budget 2019 measures announced today have failed to address the housing crisis in a meaningful way. Housing solutions mean building real homes not subsidising landlords. Instead the rainy day fund of €500m should be putting a roof over the head of homeless families.

There should have been a much greater emphasis on new social housing construction, led by local authorities. At a minimum, the Government should have taken the radical step of aiming to increase social housing construction to at least 10,000 new homes a year over the short-term (i.e. 1-2 years) and as quickly as possible thereafter to at least 15,000-20,000 a year”.

Responding to the measures announced in Budget 2019, Congress General Secretary Patricia King said: ‘In the run-up to Budget 2019, the Irish Congress of Trade Unions argued that the Government needed to focus on the continuing impact of the crisis years, which are particularly evident in housing and health, to prepare Ireland for the challenges ahead, including Brexit, a growing and ageing population and new technology in the workplace.

“We argued that Ireland simply could not afford tax cuts and that, in fact, we needed to progressively raise taxes in order to equip ourselves with the resources needed to meet these challenges – the Nevin Economic Research Institute (NERI) has found that Ireland has a 15% underspend on a per person basis compared to the average of similar Western European countries”.

The General Secretary said “The tax cutting measures of €300m stand to benefit higher paid workers most of all. At the very least, the Government should have introduced compensatory revenue raising measure from higher paid workers. For example someone on €20,000 a year will benefit to the tune of a paltry 27 cents a week compared to someone on €175,000 who will benefit by €5.55 per week, twenty times as much”.

The €280m these Budget measures will cost would have been much better invested in tackling the homelessness and the housing crisis or extending the rural broadband network.

Ends

For further information contact: Conor Kavanagh on 086 8116607