Budget 'socially regressive' says FF

Fianna Fáil finance spokesman Michael McGrath has described the Budget as "socially regressive".

Fianna Fáil finance spokesman Michael McGrath has described the Budget as "socially regressive".

He claimed its impact would be hardest felt by low- and middle-income families with children, young people with disabilities, vulnerable elderly people and students trying to chart a better future.

He said Minister for Finance Michael Noonan had the option of closing loopholes, which was promised, and targeting higher income earners.

Instead, he added, the Minister had played his trump card by increasing VAT in the first year of the Government’s five-year life, despite the clear evidence of the weakness of the domestic economy.

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"The tens of thousands of families in mortgage arrears will find nothing in today’s announcement that will help them," Mr McGrath added. "People outside medical card guidelines who take out medical insurance will be hit with massive premium increases."

He claimed that the 448,600 people on the live register were being told that unemployment was going to increase. "The real flaw in this Budget is its inherent lack of fairness," said Mr McGrath.

Mr McGrath, said the Government could “no longer hide behind the actions or decisions of the previous government”.

Socialist Party TD Joe Higgins said the Budget announcements amounted to “massive net transfer of wealth to the rich from ordinary people”.

This was evidenced by the Mr Noonan’s expectation that foreign direct investment would be “the saviour of our thousands of unemployed men and women”.

“I raised with the Taoiseach earlier on today why he did not make the real hard choice of taxing the wealth and assets of the super rich top 5 per cent in Irish society and us those billions to invest directly in job creation guaranteeing tens of thousands of jobs but unsurprisingly these alternative ideas for dealing with the crisis do not compute with him,” Mr Higgins said.

There was very little a government could do to “cajole the major private sector firms to create jobs if they do not see any profitable outlet for their capital”, he said.

“So this bending over backwards with tax breaks and then loading further regressive tax burdens on ordinary people in the form of VAT hikes and the Household Tax will do nothing to encourage job creation contrary to the claims of Minister Noonan.”

Mr Higgins said property measures announced in the Budget would also “prop up a still overpriced housing market” rather than help deal with the housing crisis.

Kildare North Independent TD Catherine Murphy said "regressive" measures for those on low incomes in favour of "business-focused" proposals showed a lack of vision.

Ms Murphy said the measures were "mean and regressive in the extreme" and that VAT increases would hit already stretched household budgets across the country.