THE Government has been urged to assess the potential benefit of introducing a basic income payment for every resident in the country.
Father Sean Healy, director of the Conference of Religious of Ireland (CORI) Justice Office challenged the Dail Finance and General Affairs Committee to propose that the Government allocate funds to study this proposal, which he believed was a viable way forward. It should be looked at independently, he emphasised.
Father Healy referred to CORI's suggestion that the present social welfare system be replaced with a basic income approach. He said social welfare was now the only source of income for a great many people. It had never been designed for this purpose, and a new model for the 21st century was needed.
The committee's chairman, Mr Jim Mitchell, TD, remarked that any attempt to change the system would be very painful.
In its pre Budget submission, Father Healy contended that the basic income approach would eliminate social welfare fraud, poverty and unemployment traps, as well as ensuring that only those seeking work were on the live register.
The committee heard submissions from a number of bodies on the way to tackle unemployment. Mr Vivian Nathan, chairman of the Taxation Committee of Consultative Committee of Accountancy Bodies, said the tax system must be used innovatively to initiate, encourage and develop indigenous and foreign businesses. In framing the 1997 Budget the Government should be particularly conscious of tax incentives offered by competitor countries.
On Corporation tax he said the 30 per cent lower rate was principally of benefit to small companies where the incentive effects needed to be enhanced. The threshold for the 30 per cent rate should be increased from £50,000 to £100,000 and there should be a staged downward movement in the standard rate, starting with a 2 percentage point reduction in 1997.
The standard rate of 38 per cent should be reduced to bring Ireland more into line with overseas competitor countries.
Mr Nathan said that in the present economic climate there should be more emphasis on incentives to reduce unemployment.
An innovative scheme was required for the long term unemployed. It should offer a special tax relief to employers in respect of the payroll costs of additional jobs provided for persons who have been unemployed for a long time.
This relief would be available as an expense on the employer's business or as an additional personal allowance where the employer was not conducting a business.
"We recommend that an employment creation allowance be granted to taxpayers who create additional jobs in the financial years ending December 31st, 1997, 1998 and 1999." The allowance should be in the form of a double wage deduction on the same lines as the double rent deduction available to properly lessees in designated areas.
