Refundable tax credit up to €5,000 urged for parents

Cori election briefing:A refundable tax credit worth between €4,000 and €5,000 for parents with children under the age of six is the best way to tackle the issues of childcare, the Conference of Religious in Ireland (Cori) has said.

The tax credit would replace the early childcare supplement which is currently worth €1,000 a year and would be available to all parents irrespective of income.

The proposal is contained in Cori's election briefing which outlines proposals to bring Irish levels of spending on infrastructure and social provision up to EU levels.

No costings have been made for the tax credit proposals, but the current early childcare supplement costs €360 million a year and such a measure could cost up to €2 billion in tax forgone to the exchequer. "By doing it this way, you could end up paying people four or five times what they are getting in their supplement without the Government increasing its expenditure," Cori Justice director Fr Seán Healy said yesterday in Dublin.

"We need to tackle child poverty and the cost of childcare and this is one way of doing both of those things in one shot."

Cori said the next general election would be about the kind of Ireland that the electorate want in the coming decades.

The organisation, which represents 11,000 members of the religious orders in Ireland, is widely credited with lobbying successfully for increased social welfare payments following Fr Healy's address to the Fianna Fáil's parliamentary party in Inchydoney three years ago.

It outlined proposals to bring levels of poverty in Ireland, currently at a rate of 18.5 per cent, down to the EU average of 16 per cent by continuing to benchmark social welfare payments and making tax credits refundable even to those outside the tax brackets at present.

The building of 60,000 new homes through the social and affordable housing scheme; meeting the UN's target of 0.7 per cent of GNP on overseas aid by 2012 and also Ireland's Kyoto payments are among a list of 16 priorities outlined by Cori for the next government.

Fr Healy said bringing levels of social provision and infrastructure up to EU standards could be achieved in the short-term without increasing the tax burden on middle and low income wage earners by doing away with tax reliefs.

However, in the long-term the electorate will have to decide if they are prepared to pay the price necessary to ensure that public services are at a similar level to our European neighbours, he believes. "I've said many times in the past that we cannot have European levels of services with American levels of taxation," he said.

"In the context of our growing national prosperity it is time we gave priority to bringing our social services and infrastructure up to an EU-average level at least."