An end to overall tax reductions and a radical shift in the way the Government manages the economy were demanded yesterday by the Irish Congress of Trade Unions.
Delegates to its biennial conference in Tralee unanimously supported motions calling for the overall tax take not to be reduced any further and criticising the Government's "preoccupation" with balancing income and expenditure each year.
While the motion on taxation, proposed by the State's biggest public sector union, IMPACT, did not call for tax increases in general, the union's general secretary, Mr Peter McLoone, said businesses and the well-off should be asked to pay more.
Mr McLoone said while there was scope for further tax reform to redistribute wealth from "the privileged to those on low and middle incomes", the Republic now had a low-tax regime. This was one of the success stories of social partnership for which the trade union movement rightly took credit.
However, now that the Exchequer was under pressure and the tax cuts had stopped, there remained a "serious imbalance" in the tax regime. "More to the point, infrastructure and public services are under severe pressure," he said.
The Republic had the lowest corporate tax rate in the EU and, among workers earning more than €35,000 a year, only those in the Netherlands and Britain paid less income tax.
"But this comes at a price. The thousands of Irish people waiting for a hospital bed, a speech and language therapist or a psychologist are paying the price. Children who, literally, have the school ceiling coming down on them are paying the price. The vulnerable young people whose preventative anti-drugs service is coming under the axe are paying the price. The Donegal workers whose company last week went into receivership, partly because the infrastructure is as attractive in Lithuania, are paying the price," he said.
The IMPACT motion said the overall tax take could not be further reduced "without adverse impact on public finances, public services, infrastructure and the scope for redistribution of the fruits of Ireland's economic success".
Another unanimously supported motion, proposed by ICTU's executive council, said management of the economy required a longer-term approach than was evident to date.
"In particular the trade union movement does not agree with the preoccupation with balancing income and expenditure in any one year," it said. An opportunity to ring-fence surplus funds had been lost during the period of economic expansion, while "swingeing cutbacks" in public service provision were imposing unnecessary levels of hardship at present.
"In short, the pro-cyclical economic strategy which is being followed is the direct antithesis of what the Irish economy needs," the motion said.
