THE GOVERNMENT should tackle “corporate welfare” before it attacks basic social welfare rates, Labour’s social and family affairs spokeswoman Róisín Shortall has said.
She claimed that “many of those now beating the drum to cut the paltry incomes of those on social welfare are the same people who have defended tax breaks for the wealthy over the years”.
Jim Walsh, the acting director of the Combat Poverty agency which is to be formally dissolved today, also said that if social welfare cuts were to be introduced “everything should be on the table”.
He highlighted €3 billion in pension tax reliefs. He also said Business Expansion Scheme (BES) exemptions should be looked at, along with tax reliefs on health insurance and other reliefs such as the writers’ tax exemption scheme.
In a final public appeal before staff merge with the office for social inclusion within the Department of Social and Family Affairs, Mr Walsh said “don’t make the situation worse” for people on welfare by cutting basic rates.
Ms Shortall said the Labour Party “does not believe that there is any case for cutting basic social welfare rates that are, in most cases, at or barely above subsistence levels. Nobody’s getting rich on €200 a week.
“The budget is large, but that’s because so many people have lost their jobs.”
She also rejected plans by Minister for Social and Family Affairs Mary Hanafin to either means test or tax child benefit.
It should remain a universal benefit, and funding could be clawed back through a “progressive tax system”, including a new 48 per cent tax rate for people on incomes above €100,000.
Mr Walsh said there were efficiencies that could be looked at in social welfare. If the social welfare budget had to be cut and if child benefit had to be considered it should be taxed rather than means tested.
Ms Shortall said: “You can make the simplistic argument that people on high incomes shouldn’t be getting child benefit. But once you start tampering with child benefit it is first of all extremely cumbersome and then you run into all kinds of anomalies and put into place all kinds of poverty traps and disincentives to work for people who are afraid they will lose their child benefit.”
She said there was “substantial corporate welfare” in the system, citing directors’ pension schemes where 25 per cent was tax free.
