A chara, – “The budget’s mixture of permanent and once-off items conferred greater benefits on lower-income sections of the population, according to the Economic and Social Research Institute (ESRI). As the tax package was aimed more at middle-income earners, this indicates that the additional spending measures benefited the lower earners as they were worth more as a proportion of their income” (“The Irish Times view on Budget 2024 and child poverty: some progress, but more work to be done”, October 13th).
It’s difficult to see how it can be claimed that “the additional spending measures benefited the lower earners”, unless perhaps just in terms of percentages. The crucial factor here is “as a proportion of their income”, which gives higher earners a disproportionate starting advantage.
This is vividly illustrated, for example, in The Irish Times Budget Supplement (11 October 11th), which offered six sample models of households on different incomes. Take just three of those.
Rebecca, a low-income worker, and living in a one-bedroom rented apartment, is on a 2023 salary of €22,000. Her annual gain from the 2024 budget is €345. This is an effective increase of 1.57 per cent.
Mark and Linda are high-earners, living in a four-bedroom detached house which they own, are on a combined salary of €300,000 (disregarding their annual income from a rental property of €25,000). Their annual gain is €2,259, an effective increase of just 0.75 per cent. Their 2023 salary is €278,000 more than Rebecca. Their 2024 salary is €279,914 more than Rebecca’s; the gap has widened. Although their percentage increase is less than half that of Rebecca’s, their higher salary gives them a much higher start.
Leslie and Kitty, a retired couple in their late 70s, live in their own home, and have a combined income of €46,728. With Budget 2024 they gain €1,398, an effective increase of 2.99 per cent. Their income in 2023 is €24,728 more than Rebecca’s; in 2024 the gap widens to €25,781.
Even if we divide in two the gains of Mark and Linda and of Leslie and Kitty for closer comparison with Rebecca living on one salary, their gains are still significantly greater than Rebecca’s. Either way, it is not the case that the budget conferred greater benefits on Rebecca. She falls further behind.
In 2023 the minimum wage is €11.30 per hour. If Rebecca is in permanent employment and working 35 hours per week, paid the legal minimum wage for 52 weeks, her salary would be €20,566. In the same situation in 2024, if she is paid the increased living wage of €12.70 per hour, her income would be €23,114.
Whatever way I look at it, I cannot see how Budget 2024 can be described as “progressive”, reducing the inequality between those on low income and those on high income. There is no level playing pitch to start with. – Is mise,
PÁDRAIG McCARTHY,
Sandyford,
Dublin 16.
Sir, – Let us assume there is a shortage of bread, and bread becomes priced out of the reach of citizens.
What should our Government do?
Provide interest relief to people who have bread but who borrowed money to buy bread?
Provide subsidies to people who wish to purchase bread without increasing the supply of bread?
Subsidise bakers whose interest in supplying more bread is constrained by their interest in grossly inflated bread prices?
Let the State take the lead and bake more bread?
Our Government ministers should be obliged to spend a year (or five) on the salaries of ordinary teachers, soldiers, shop assistants, etc, and try and house themselves with outrageous rents with no possibility of affording a house.
Then their “let them eat cake” attitude might change. – Yours, etc,
BILLY HANNIGAN,
Limekiln,
Dublin 12.