Tax should be at the top of the Government’s priority list, Social Justice Ireland has said.
As TDs gather in the Dáil today, it is important that the politicians acknowledge the fact that we’re going to need more revenue, not less, to fun the needs of a growing and aging population, Social Justice Ireland (SJI) has noted.
On Breakfast Briefing, SJI’s Research and Policy Analyst Michelle Murphy said the Government needs to see that “realistically, we have a growing and aging population”.
Defecits
“We do have current infrastructure and service deficits,” she said.
“What all of our politicians really need to acknowledge [is] that the proportion of revenue collect is going to have to increase in years to come, which means our tax take will have to increase to fund services and infrastructure and actually to provide services and infrastructure based on need and based on population growth and pent up demand.
“That means you need to look at the tax base, look at the tax take, how you're going to generate that revenue, and how you're going to do it in a stable, recurring way over time, and have a vision as to what kind of services and infrastructure people can expect.
“We haven't had seen those discussions and even looking through the manifestos, it's not immediately obvious what vision the parties might have - particularly around tax.
“The reality is, we're a growing and aging population - if we're going to meet the needs of our population over time, then we need to start planning for that now.”
Annual resourcing statement
Ms Murphy said an annual resourcing statement is needed to properly calculate how much of a tax take Ireland needs over the coming years.
“For a start, one thing that we think would be a really useful part of the budgetary process would be an annual resourcing statement so that, alongside maybe the summer economic statement, Government make a presentation to the Dáil about how much tax is needed just to deliver existing levels of service,” she said.
Ms Murphy said that instead of just calculating the amount of tax needed to keep already operating services afloat, the Government needs to calculate for service and infrastructure development in the budget and move away from leaning on individual’s tax.
“We're growing and aging, which means in 10 years’ time, and in 20 years times, there’s going to be less people in work than there are now,” she said.
“What that means is that we can't be relying on PRSI, income tax and that, which are kind of three of the four legs that make up our tax take.
"Highly reliant"
When you take away the corporate tax take, Ireland is "very highly reliant" on individuals paying their taxes, Ms Murphy said.
“If you do have less people at work, and the CSO projections are showing us that because you have more older people in proportion to the labour force, how are you going to pay for the pensions, the home help hours and even the education services?
“You need to look beyond that - so that's why you need this planning piece as to how you're going to generate that recurring, stable revenue, beyond just looking at individuals all of the time.”
Ms Murphy said that if the Government began this annual statement in 2025, they should look at planning out until 2030 and begin creating proposals on how to bump up services in Ireland.
Man with many bills or invoices and no money. Image: Alamy
