Employers are to urge the Government to invest about €1 billion more in additional capital spending and to cut the marginal tax rate.
However, unions will use the opening of the Government’s new national economic dialogue today to argue for greater public spending and for some increases in taxation.
Social justice campaigners are expected to argue against a low-tax economic model and to press for greater investment in social infrastructure and services.
The two-day process will provide an opportunity for unions, employers, community and voluntary representatives, as well as farmers and environmentalists, to have their say on how the Government should frame the budget for 2016, in the light of competing economic and social priorities .
In their joint invitation, Minister for Finance Michael Noonan and Minister for Public Expenditure Brendan Howlin said they were “hoping for a genuine and robust dialogue, which will examine the realistic options open to the Government within the available fiscal space of around €1.2 billion to €1.5 billion”.
Tax and spending
“This will be shared on a 50:50 basis between expenditure and tax measures.”
A spokeswoman for the Department of Public Expenditure said the Government “will reflect on themes and ideas that emerge from the dialogue in preparing for budget 2016”.
The talks, chaired by Prof Alan Barrett of the Economic and Social Research Institute, will be opened by Taoiseach Enda Kenny and Tánaiste Joan Burton.
The engagement will begin with a plenary session on the budgetary landscape.
This will be followed by eight sessions on specific themes, each chaired by a Cabinet member. These include Ms Burton on competing economic and social priorities; Mr Noonan on “equity and economic growth in tax policy”; and Mr Howlin on policy orientations in light of the demographic outlook.
Out of line
At the talks employers’ group Ibec will argue the marginal or higher income tax rate of 40 per cent is far too high, is way out of line with competitor economies and is acting as a disincentive to work, doing overtime or taking a promotion. The group will maintain that “it risks damaging our reputation as a place to invest and do business”.
Ibec chief executive Danny McCoy said: “Ireland’s is set to have the fastest growing population in the EU over the next 30 years, but we’re not planning for this. Massive spending cutbacks during the crisis years have left us playing catch-up.”
However, Social Justice Ireland said tax cuts would not solve infrastructural problems, would not improve social services and would not deliver a fairer society .
Speaking in advance of the national economic dialogue, Social Justice Ireland director Seán Healy said: “Government should take a long-term view and promote the common good by using all available resource to invest in Ireland’s social and physical infrastructure and services.”
