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Pay rises not tax cuts

Date Released: 15 April 2014

Pay increases rather than tax cuts are the best way to drive recovery and protect public services according to Tom Healy, the director of the Nevin Economic Research Institute (NERI).

Addressing a conference organised by the Irish Congress of Trade Unions and entitled “A New Course for Better Times” in Dublin’s Mansion House on Friday (11th April), Healy asked:

“How can anyone talk of tax cuts when our public services are grossly under-funded in key areas of human need? We cannot have European style public service without European norms of taxation including social insurance and local taxation.Healy also called for “a re-structured and cleaned up banking system” and “a national investment strategy to rebuild and renew Ireland’s infrastructure especially in the areas of social housing, early childhood care and education, renewable energy, retro-fitting, water and broadband.”

In a wide ranging speech to over 300 delegates from across the trade union movement, community activists and academics, Healy also advocated “the strengthening of collective bargaining rights and employment protection to tackle the economically and socially damaging area of low-pay and precarious work.”

“Without a re-structured and cleaned up banking system we will not see the speed of economic recovery needed to bring about full employment. I would suggest a Banc Glas – a new Green Bank formed as a separate commercial entity from Allied Irish Banks and Bank of Ireland, publicly controlled and accountable and competing in the market for enterprise lending, small to medium-sized saver deposits and investment in ‘green technology’. Such a bank could work in tandem with the European Investment Bank and help rebuild the damaged areas of our economy,” Healy argued.

He continued:“The best way to reward work is to pay decent living wages. The best relief to give hard-pressed working families is to stop cutting further into education, health and welfare which only impacts disproportionately on poorer households.

“The best way to ensure greater social equality is to increase Ireland’s ‘social wage’ by way of a proper employer and employee-funded social insurance system – this will pay for education, health and income during periods of learning, unemployment, sickness or retirement.“The best way to tackle poverty is to create decent jobs that pay, not welfare-dependent households which must rely on a fragmented combination of tax reliefs and welfare payments.

“The best way to create employment is through enterprise – public, private and voluntary/not-for-profit and not excessive reliance on large footloose multinational companies (welcome as they are). The best way to fix our public finances is to grow the economy – not to continue cutting our way out of a deficit. And the best way to raise levels of happiness and well-being is by economically empowering individuals and communities so that they can live lives of worth and mutual support and caring.”


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