We want to use Budget 2018 to open up new ways of investing in housing and ... immediate increase in funding for greenwa
Pre-Budget Submission 2018
We want to set Ireland on an alternative economic path. We want to use Budget 2018 to open up new ways of investing in housing and education, to help green our economy and support caring work which the market currently undervalues. For the first time in over ten years we will have a balanced budget. Rather than congratulating ourselves and returning to the economic growth model of the early part of the last decade, which is where the Government is heading, this is a historic opportunity to do things differently. We believe such an approach could help avoid an overheating of our economy, create new green enterprise opportunities and promote greater social justice in our society. Our spending commitments are divided in three broad categories:
Investing for the future We need to start by doing things differently in the housing market. The Government supports a new ‘cost rental model’ of social housing but has done nothing to make it happen. Because the long term borrowing for this housing can be set off against the future rental income we believe this homebuilding programme can be provided for off the Government’s own balance sheet.
Social Justice for All. A shift in our social welfare system towards a basic income model would give people freedom to work in a more flexible way. We want the Department to experiment by introducing a basic income scheme for six different towns around the country to test how it might work nationwide. We would backdate the home carers scheme and increase the home carers credit so that work in the home is recognised and introduce a refundable tax credit to help those on low pay. Our concept of social justice has to extend beyond our own borders and we would implement the recommendations of Dochas the organisation representing the Irish Overseas Development agencies to bring us back onto the path of meeting our 0.7% UN development aid commitment. The Departments of Finance and Public Expenditure and reform need to find new ways of experimenting in the budget to test out different economic models. We would start with the introduction of a scheme where six Irish towns could be selected to trial the introduction of a basic income social welfare model. We would allow different towns to bid to enter the scheme and provide a minimum €200 per week payment to every person living within the selected urban areas. The trial would be set for a number of years to insure the costs and benefits could be assessed in a scientific basis with the lessons then being applied to the entire country. Expenditure: €6m
Our third level colleges are in financial crisis and need additional funding. Rather than putting a further burden on the student population, we would allocate an additional €300 million in current funding to improve the standard of teaching.
Greening our Economy The state needs to play an increased role in the roll out of a new low carbon economy. This should start with the creation of a ‘Just Transition’ fund which would assist the creation of new clean energy industries in the midlands for Bord Na Mona workers. We also want to see a massive increase in support for agri-environment schemes to help in the revival of rural Ireland. In the transport sector we need an immediate increase in funding for greenways and public electric vehicle charging points to help decarbonise our transport system.
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Investing in services and infrastructure It is vitally important that Budget 2018 focuses on addressing the serious shortcomings in the provision of services in Ireland, most specifically housing. The Government must examine how public housing is provided in countries such as Austria and Switzerland where a ‘cost rental’ model allows local authorities to borrow off-balance sheet and invest in public housing on a mass scale, and offers affordable, secure, high quality housing. According to the Department of Housing, when local authorities build social housing themselves, it costs on average €190,456 for a two-bed home. This is much cheaper than the market is providing to local authorities. Long term rental income covers the cost of housing provision and would see local authorities and housing associations attracting a variety of tenants into new developments, where the rent covers the cost of the construction loan. Those unable to pay the full rate could avail of a rent supplement, similar to the support currently provided to the private landlord sector. We must not only learn from the mistakes of the past, but also start to rectify them for homeowners who were left picking up the pieces of shoddy development, with no legal recourse. Budget 2018 should outline measures to aid homeowners dealing with legacy building issues. We need a revolution in how Ireland moves. Investment in public and sustainable transport is vital in Budget 2018. Cycling, walking and public transport must be prioritised over roads. When people do buy cars, we need to encourage the rapid uptake of Electric Vehicles (EVs). We’re proposing a package of measures to make road travel cleaner, and better for our health and our environment. Education and mental health are two further areas we want to see prioritised. Funding of services for mental health must be increased. Despite improving awareness and reducing stigma of mental health issues, front line services remain under-funded. In education, we’re calling on the Government to dramatically increase the funding for third level, ensuring no further increases of fees, and decreasing them, if possible.
We’re proposing: Green Transport: A package of incentives for Electric Vehicles, including motor tax and toll exemptions, and further investment in rapid charging infrastructure around the country. Expenditure: €10 million Allocate 10% of the overall capital transport budget for cycling including design and delivery of a network of urban cycling routes. Revenue: Neutral Allocate an extra €50 million for Greenways for the four years up to 2021. Expenditure: €50 million Extension of tax saver rates to students for public transport. Expenditure: €25 million
Community Wealth: Begin the process to establish a regional network of public banks, modelled on the Sparkassen in Germany, to stimulate regional and rural economic development and reduce the cost of finance for SMEs. Expenditure: €10 million
Valuing Education and the Arts: Increase the annual funding for third level education by €300 million to ensure no further increases in fees, and a decrease, if possible. Expenditure: €300 million Increase funding for direct mental health services, not advertisement. Expenditure: €55 million Reinstatement of the Gaeltacht scheme for primary school teachers. Expenditure: €1 million Continue commitment to double funding and investment for the arts over five years with an increase in 2018 of at least 20% to Arts Council core funding bringing Ireland into line with the EU-28 average. Expenditure: €13 million
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Creating a Greener Ireland Ireland can be at the forefront of the new clean industrial revolution which is already starting to take place and that we have everything to gain from adopting such a leadership role. The scale of the change is similar to the one we made in the late fifties and early sixties when we made a strategic decision to go from being a closed to an open international economy. It took decades of public, political and administrative support to implement the measures that delivered on that original strategic decision. Our party has made a detailed submission to the National Climate Change Mitigation Plan, which addresses some of the detailed policy questions. We need a similar consensus and focus now on moving Ireland from an unsustainable to a truly sustainable economic model. That shift is centred around the realisation that looking after nature is also looking after ourselves. It is in all our interests to get it right. The key ingredient for success is building public confidence behind the evolutionary leap that we now know we need to make.
We’re proposing: Just Transition Redirecting at least half of the current subsidy for peat into retraining and social supports for Bord na Móna workers and midlands communities. This should secure at least €60m for a positive green employment creation in the area and ensure a Just Transition. Revenue: Neutral
Environmental Supports Increase funding of agri-environmental schemes to €250 million, especially low-income farmers, as recommended by the IFA: €10m Increase funding for High Nature Value Farming: €5m Increase the number of designated walks on the Walks Scheme to 80, as per the Programme for Government commitment. Expenditure: €4m
Agriculture and energy will have a massive role to play in making this transition. It is vital that communities and farmers are rewarded in the transition to a low-carbon economy, and we avoid the mistakes made in previous economic transitions.
Extension of the Afforestation Scheme to include support for native trees and a more continuous cover approach to Irish forest. Expenditure: €2m
The community energy proposals we are making are designed to lay the foundations for a burgeoning, community-based renewable energy revolution. Energy must be seen as a service to society, not as a means of wealthextraction by private companies or state monopolies, facilitated by the state. People can be mobilised behind a vision of energy independence and sovereignty, and the benefits it brings. While civil servants understand the extent of the technical challenges, the lack of leadership from politicians has not provided the necessary vision and commitment to energy democracy. Our energy proposals are creating the framework for future growth, and would mainly have no costs in the 2018 period.
Reopen the Organic Farming Scheme. Expenditure: €10m
Double the funding to Animal Welfare Organisations from €2.5 million to €5 million. Expenditure: €5m Sugar Tax. Revenue: €70 million
Smarter, Greener Taxation Equalise the cost of diesel and petrol as recommended by the Environmental Pillar. No changes should be made to the agricultural diesel subsidy. Revenue: €110 million Introduce a tax on aggregates as recommended by the The Tax Strategy Group - Energy and Environmental Taxes Paper 17/08 and the Environmental Pillar. Revenue: €75 million Reduce VAT on the repair of consumer and electronic goods to encourage a move away from a ‘throw-away’ economy. Revenue Loss: €16m
Green Energy Begin to introduce a price for rooftop solar on a fair and just basis Introduce increased budgetary support for renewable energy run by co-operatives and local authorities that are more inclusive for the Irish public than the current focus on large multi-nationals.
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Creating a fairer Ireland In each of our budget submissions over the last 6 years we have supported the call by Social Justice Ireland and ICTU for the introduction of a refundable tax credit. The measure would return that element of their personal tax credit which had not being availed of as a refundable cash payment. Such an initiative would be a step in the direction of a guaranteed basic income, valuing the work done by people outside paid employment and would protect those workers in part time or low pay employment, and those on social welfare. The Green Party agrees with Social Justice Ireland that further tax cuts should not be introduced in this budget due to their negative impact on general taxation. Such tax cuts are proven to benefit higher earners, and not those in need or the wider population. Revenue has estimated that existing tax breaks cost the Exchequer €22.95 billion in 2014, though the total cost is not known. It is estimated that Real Estate Investment Trusts now own €13.6 billion of Irish property, much of which is not subject to corporation tax, capital gains tax or DIRT. We favour a move away from tax on labour and instead taxing activities that contribute to climate change and inequality. This would include a crackdown on tax breaks and avoidance by multinational companies, vulture funds and developers.
Our proposals include: The Caring Society Eradicate the pension gender gap, back-dating the Home-makers’ Scheme. Expenditure: €290 million Restoration of pre-2012 conditions regarding pensions on a phased basis, with a commitment to introduce the total contributions approach by 2018. Expenditure: €64.57m Extend maternity leave and benefits for mothers of premature babies and restore funding for the HSE Baby Friendly Health Initiative. Expenditure: €5.5 million Support for carers in the home should increase from €25m to €50m. Expenditure: €50M. Around 98% of the families affected by cuts to lone parent’s welfare were headed by women. The earning disregard for the One Parent Family Payment/ Jobseekers Transition Payment should be increased to €146.50 to allow lone parents to take up and increase working hours. The anomaly where lone parents in receipt of this payment and rent supplement are not eligible for SUSI maintenance should also be removed. Expenditure: €27 million Allow lone parents in employment whose children are aged between 7 and 14 to receive both the Jobseekers Transition Payment and Family Income Supplement if they meet the qualifying criteria. Expenditure: €10m The majority of homeless women single parents have also suffered from domestic violence. Existing domestic violence services have seen a 17% cut in funding since 2012. An increase of €30m in funding to address gender-based violence is required, as recommended by SAFE Ireland. The Green Party would support an increase in such funding on a phased basis. Expenditure: €10m In line with the USI and National Youth Council of Ireland’s recommendations, restore the full rate of social welfare payment for under 26s. Expenditure: €149m
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International Responsibilities Increase Overseas Development Assistance spend by 0.05% in Budget 2018 as recommended by Dochas. Any contribution to the UNFCCC Green Climate Finance Fund should be additional to this amount. Expenditure: €128.9m
Fairer Taxation
Basic Income Pilot
6m
Exemption for EVs from toll and parking fees
25m
Funding for Greenways
70m
Student leap card subvention
25m
Public Banking
10m
Basic income should be introduced on a phased basis, starting with the introduction of refundable tax credit of €140m. Expenditure: €140m
Additional allocation for Third Level Funding Mental Health Funding
55m
Introduce a Site Value Tax on development land. Revenue: €50 million.
Investment in solar energy for public buildings
20m
Increased funding for the Arts
13m
Funding for Agri-Environment schemes
80m
Funding for High Nature Value Farming
5m
Increase in Walks Scheme
4m
Reintroduce the 80% levy on windfall profits. Revenue: Neutral Abolish the 9% VAT rate for the tourism and hospitality sector. Revenue: €491 million Close current loopholes in derelict and vacant sites legislation, as outlined in our Derelict and Vacant Sites Bill 2017. Close still existing tax breaks for real estate investment funds (REITs) including exemptions from Capital Gains Tax, DIRT and corporation tax. The revenue is as yet unknown. Remove the help to buy scheme which has been shown to contribution to price speculation and instead provide affordable housing. Revenue: €70 million
Extension of Afforestation Scheme Animal Welfare Funding
300m
10m 5m
Restoration of the Organic Farming Scheme
10m
Scheme for repairs
16m
Backdating of Homemaker’s Scheme
290m
Restoration of pre-2012 pension conditions (Phase 1)
64.7m
Extension of Maternity Leave for Mothers for Premature Babies and restoration of HSE Baby Friendly Health Initiative
5.5m
Support for carers in the home
50m
Increase in One Parent Family Payment/ Jobseekers Transition Payment and restoration of cuts between 7-14 years.
37m
Increase Domestic Violence Funding on phased basis
10m
Restoration of social welfare payment for under 26s
149m
0.05% increase in Official Development Assistance
125m
Introduction of Refundable Tax Credit
140m
Total
1525.2
Neutral Proposals Just Transition Fund for the Peat Industry 10% of Capital Budget to Cycling Reintroduction of 80% levy on windfall profits
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Revenue Sugar Tax
70m
Site Value Tax
50m
Removal of Help to Buy Scheme
70m
Aggregates Tax
75m
Return to 13.5% tax rate for hospitality sector (after review so that rural and vunerable areas not affected
491m
Equalise the cost of diesel and petrol
110m
Total
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Per annum
866m
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