A decision to cut VAT rates for the hospitality sector rather than use the money to address the issue of child poverty is the latest in a succession of major policy mistakes made by the current Government, delegates to the Irish Congress of Trade Unions (Ictu) biennial conference in Belfast heard on Tuesday.
Outlining the details of ICTU’s new economic policy, Dr Tom McDonnell of the union-backed Nevin Economic Research Institute said Ireland faced a looming fiscal crisis because the Government has become dependent on windfall corporate taxes receipts to fund day-to-day spending.
“If you have an economy that is in full employment, that has never performed better, you should not be running a deficit,” he said.
The impact of the housing crisis on workers was repeatedly highlighted on the first day of the conference, with Mary Fogarty of the Irish Nurses and Midwives Organisation citing the example of one newly qualified nurse living in Dublin who is paying 77 per cent of her take-home salary on rent.
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There is “very little prospect of a significant improvement in the housing crisis in the next two years,” said Dr McDonnell.
The Government’s commitment to cut the VAT back to 9 per cent for the hospitality sector was criticised by a succession of speakers, some of whom pointed to the estimated €770 million cost being almost identical to the likely bill for a proposed second-tier child benefit payment.
“We could be using that money to end child poverty forever,” said Dr McDonnell, “but we’re not going to do that.”
The country’s largest union, Siptu, said ending “the scourge” of low wages was key to addressing poverty among families, with the union backing a motion that called for a renewed emphasis on increases to the national minimum wage and proportionately bigger pay increases for the lowest paid employees of private sector firms.
“There is a misconception that low pay is confined to the sectors we would traditionally view to be low paid,” said the union’s deputy general secretary, John King, “but the reality is that two-thirds of low-paid workers work outside of the hospitality, contracting services and retail sectors”.
He said manufacturing, transport, private healthcare and “even the high-income sectors of finance and IT have tens of thousands of low-paid workers” and the Government’s response had been to “pander to the whims of low-paying employers”.
The morning session of the conference ended early, meanwhile, after organisers were informed on Friday that Northern Ireland First Minister, Michelle O’Neill would not be attending.
Organisers were under the impression Ms O’Neill had had to attend a meeting of the Northern Ireland Executive instead but there was some annoyance when it emerged that meeting had taken place on Monday.
