Government must not repeat Budget mistakes says think tank

The Budget for 2023 furthered the gap between the well-off and those on welfare and lower work incomes, according to Social Justice Ireland.

Dr. Seán Healy, CEO of Social Justice Ireland said “Government must not repeat this mistake in Budget 2024.”

Analysis carried out by the charity found that the legacy of last year’s Budget only served to widen the gap between rich and poor, and that measures aimed at abating the cost of living crisis did not go far enough.

The analysis, titled Distributive Analysis of Cost of Living Measures, February 2022-July 2023, found that there was a “marked difference” in the way that the cost-of-living measures was delivered to households according to Colette Bennett, economic and social analyst with Social Justice Ireland.

Bennett said the Budgert for last year included temporary measures, such as electricity credits and one-off additional welfare and fuel allowance payments, alongside permanent measures such as changes to the value of core welfare payments and changes to tax credits and bands.

Bennett voiced concern that the temporary measures will disappear, but the permanent changes will remain, and noted that permanent measures favoured better-off households.

Bennet claimed “Budget 2023 increased the Rich-Poor gap by €199 in the year, a gap which now stands at almost €1,000 per week. Budgetary policy should aim to alleviate the pressures on households who can least absorb cost of living increases, rather than increase the disposable income of wealthier households.”

“Social Justice Ireland has consistently argued for the prioritisation of low-income welfare-dependent families in Budgetary policy and welcomes how recent cost of living supports have assisted this group. However, we are concerned that the permanent changes to income taxation levels in recent Budgets have shifted away from this approach and regrettably expect that much recent progress will be reversed” stated Susanne Rogers, research and policy analyst with Social Justice Ireland.

“Our analysis highlights how low-income working families, those with incomes below the standard rate income tax threshold, gain least from the Government’s measures over the past three years.  It also highlights the marked difference in impacts of temporary gains from one off cost of living supports and permanent gains from welfare and taxation changes,” she said.