NERI POST-BUDGET SEMINAR19 OCTOBER 2016

Eamon Murphy

Economic & Social Analyst

eamon.murphy@socialjustice.ie www.socialjustice.ie

@eamonsji

Employment and Tax

Before Budget 2017 After Budget 2017

Salary range Rate Salary range Rate

€0 - €12,012 1% €0 - €12,012 0.5%

€12,013 - €18,668 3% €12,013 - €18,772 2.5%

€18,669 - €70,044 5.5.% €18,773 - €70,044 5%

€70,045 + 8% €70,045 + 8%

@eamonsji

€335m Spent on alterations to USC bands and rates

Example

• Person B earns approximately 3 times as much as Person A• Person B gains approximately 3 times as much as Person A

@eamonsji

Person A Person B

Marital Status Single Single

Salary € 23,400 € 72,000

Salary BenchmarkLiving Wage

(€11.50 per hour)Twice average

earnings

Gain from Budget 2017 € 119 € 351.50

Gain as a % of salary 0.51% 0.49%

Employment and Tax

• €335m spent on alterations to USC bands and rates• €48m on income tax reductions• For that same €383m you could have

(a) Made tax credits refundable (€140m)(b) Increased the personal tax credit for all earners by €100

per person per annum (€227m)….and had money to spare!

• Small increase to the minimum wage (10 cent per hour)Low paid workers looking forward to 2030

• Young people didn’t get the full benefit

@eamonsji

Trends in effective tax rates

@eamonsji

2008 2009 2009* 2010 2011 2012 2013 2014 2015 2016 20175%

7%

9%

11%

13%

15%

17%

19%

Single earner on €25,000 Couple 1 earner on €40,000 Couple 2 earners on €60,000

Trends in effective tax rates

@eamonsji

1997 1999 2001 2003 2005 2007 2008 2009 2009* 2010 2011 2012 2013 2014 2015 2016 20175%

10%

15%

20%

25%

30%

35%

40%

Single earner on €25,000 Couple 1 earner on €40,000 Couple 2 earners on €60,000

Housing and Homelessness

@eamonsji

Supply is the problem, so demand is the solution?

Help to Buy Scheme• First Time Buyers• Income tax rebate of 5% on newly constructed home• Based on income tax paid during the four years prior to

purchase. • Full amount available on homes worth €400k. Available on

homes worth less than €600k. • Pro-rata rebate will be made available in respect of those

below €400,000.

Housing and Homelessness

@eamonsji

Other options…

• 400 social housing units• Levy on undeveloped land• Replace the Local Property Tax with a Site Value Tax

Incentivise developers to put land to use• Off-balance-sheet mechanisms

Invoke Structural Reform ClauseCreate a Special Purpose Vehicle

Homelessness August 2015 to August 2016

@eamonsji

Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-160

1000

2000

3000

4000

5000

6000

7000

Homeless Adults Families Dependents Total Homeless

Extracted from Department of Housing, Planning, Community and Local Government Homelessness Statistics, www.environ.ie

Vacant units vs Housing Waiting Lists

@eamonsji

Carlow

Dublin

Kildare

Kilkenny

Laois

LongfordLouth

MeathOffaly

Westmeath

Wexford

Wicklow

ClareCork

Kerry

Limeric

k

Tipperary

Waterford

Galway

Leitrim

Mayo

Roscommon

Sligo

Cavan

Donegal

Monaghan0

5000

10000

15000

20000

25000

30000

35000

40000

Waiting List 2013 All Vacant 2016 Vacant (excl. Hol homes) 2016

Source: Census 2016, www.cso.ie and Housing Agency, Summary of Social Housing Assessments 2013, December 2013

Other selected areas

@eamonsji

• Childcarenot a bad start, but….

Other selected areas

@eamonsji

• Childcarenot a bad start, but….

• Climate change

Education spending

@eamonsji

Other selected areas

@eamonsji

• Childcarenot a bad start, but….

• Climate change• Education• Demographic concerns

Other selected areas

@eamonsji

• Childcarenot a bad start, but….

• Climate change• Education• Demographic concerns• Official Development Assistance

fall in overseas aid as a % of GNP

Trend in Ireland’s overseas aid (% of GNP)

@eamonsjiSource: Census 2016, www.cso.ie and Housing Agency, Summary of Social Housing Assessments 2013, December 2013

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 20170.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

The UN-agreed target of 0.7% of GNP

Thank you

@eamonsji www.socialjustice.ie