Stay the course on fiscal policy: Despite the heightened uncertainty of Brexit, the Government should not deviate from plans for a modestly expansionary budget for 2017. This involves an additional €1 billion worth of spending increases and tax cuts on budget day, plus an additional €1 billion for social housing outside of the current fiscal rules. This requires urgent EU agreement. This week's revisions to the 2015 GDP growth rates should not impact 2017 fiscal plans.
Get our personal tax system into line: We need a system that better rewards work and is more attractive to mobile talent. If we don't reform we'll lose jobs and investment. You have to earn nearly €55,000 in the UK to be hit by their 40% tax rate, in Ireland workers earning less than €34,000 pay a much higher marginal rate. The point at which workers hit the marginal rate should be increased by €1,000 in the budget, and we need a clear road map to lower the marginal rate to 45% and broaden the tax base.
Improve tax offering to mobile investment: We need to make Ireland a more attractive place to invest and grow a business. Past achievements are no guarantee of future success. Budget 2017 should significantly increase capital gains tax (CGT) relief for entrepreneurs, enhance investment schemes, and improve the treatment of share options. Ireland is simply not a competitive location for entrepreneurs. Unless we make these changes now, Brexit could see an acceleration of Irish owned businesses moving to the UK.
Invest much more in the future: We continue to invest far too little in the economy. We have the fastest growing population in Europe, but the third lowest level of investment in the EU. We must ensure the country has the transport, education, housing and broadband infrastructure it needs to prosper. This will require a major new commitment on investment spending, far beyond current plans.
Tackle the housing crisis with determination: Spiralling housing costs are placing too big a financial burden on working families. They are making Ireland a less attractive place to live and work and are adding to wage pressures. Ireland needs between 35,0000 to 40,000 new homes each year, of which around 11,250 should be within the four Dublin local authorities. Last year, only 2,800 new units were built in Dublin. The Government should seek a derogation from the European Commission, on social grounds, and spend €1 billion outside of the current fiscal framework on social housing in 2017.
- IbecBudget2017.pdf - 1,155 Kbytes
Tuesday, 14 June 2016