The average household gained €9.41 per week in the 2007 Budget with low-income households getting €8 - €11, according to analysis by the Combat Poverty Agency (CPA).
It found that the Budget delivered gains of up to three times the average for low-income groups, compared with previous budgets. However, the agency claimed that the Government's massive investment in the Special Savings Incentive Accounts (SSIA) scheme could undo much of its efforts to redistribute resources.
The average percentage income gain in the Budget was 1.5 per cent, with lower income groups gaining 4 - 5 per cent and the highest income earners getting about 1 per cent.
Single and dual unemployed families got the highest percentage rise of 4 - 5.5 per cent. Retired households also did well, but dual-income couples gained the least in percentage terms.
Jim Walsh, the CPA's head of research, said the Budget was "progressive" in terms of its welfare measures. However, he said the tax package delivered "proportionately little" to less well-off groups because of their low-income base.
He expressed concern at the return to cutting tax rates and said this approach was less equitable and it would be harder to claw back the reduction if needed in the future. The 1 per cent cut in the top rate of tax cost €186 million, money which might have been better spent on childcare measures, he said.
Mr Walsh also expressed disappointment at the lack of "fundamental reform" in the structure of indirect taxes. "A rebalancing of the tax burden from regressive to progressive taxes is required," he said. The CPA has described the Government's investment in the SSIA scheme as "the fly in the ointment".
Mr Walsh said the scheme had a number of inequitable features. Just over one-third of the adult population held these accounts and they were favoured by high-income earners, he said.
"The value of the SSIA's subvention at €3 billion is almost three times the tax/welfare package of Budget 2007," he said.
Just 16 per cent of unemployed people benefited from the scheme, he said, while an estimated 70 per cent of professionals held SSIAs.
Mr Walsh also pointed to the inequity of providing an income tax subvention of almost €3 billion per year for private pensions, plans that mainly benefit high-income taxpayers.
Looking back over the past 10 budgets, he said the average gain in disposable income was 16 per cent. Three-quarters of this was delivered in the first five years compared to one-quarter in the last five years. "The distributive pattern over the longer period still favours low-income groups, but to a far lesser extent than in recent years," Mr Walsh said.
The 2007 Budget spent €400 million more than the package suggested by the CPA in its pre-Budget submission. However, the CPA placed a greater emphasis on childcare measures.
"Budget 2007 leaves 6 - 29 per cent more children in poverty than would have been the case with the Combat Poverty package," he said.
Mr Walsh had also called for more transparency from the Government in the run-up to the Budget, instead of the current "cloak and dagger" approach.
He said it was very difficult for groups such as Combat Poverty to make pre-budget submissions without knowing how much the Government was planning to spend.
