Siptu: Spend 2 cent on services for every 1 cent in tax cuts

For every cent allocated bythe Government to tax cuts, two cent should be earmarked for public spending increases, the head of the country’s largest trade union has urged.

Siptu president Jack O'Connorsaid public spending should be prioritised over tax cuts on a ratio of a minimum of 2:1 as resources become available in a growing economy.

Speaking at the union’s education sector conference and in advance of the Government’s spring statement next week, he said: “Our public infrastructure has been severely damaged by six years of one-sided austerity.

“Approximately €30 billion has been taken out of the State budget in the effort to cut the gap between revenue and spending. This was implemented on the basis that for every euro by which tax was increased, public spending was cut by €2.”

“At a very minimum, that ratio must now be reversed as resources become available, in a growing economy, over the next number of years. It is now critically important that we embark on a major investment programme to rebuild our public health, education and local authority services. Simultaneously, the State’s current capacity to borrow at near negative rates offers a unique opportunity to accelerate the public housing programme. “

Mr O’Connor also argued that the one-third of resources that would be allocated to tax cuts should be concentrated exclusively to the advantage of those on low to middle incomes.

“There is absolutely no justification for using scarce public resources for the purpose of gifting the wealthy and those on higher incomes who could and should have contributed more to the fiscal adjustment.”

He said there was still room to raise revenue through a wealth tax and other levies on capital as well as on higher incomes .

He said “all of this should now be used to alleviate the burden on struggling low to middle income families, thus enhancing their living standards and affording them some capacity to spend so as to re-enforce the momentum and sustainability of the economic recovery.”