Whatever about the leaks, the underlying thinking in much commentary and policy analysis shows why some people will get hit very hard. Yes, those on social protection should look out –especially around secondary benefits and eligibility. And pensioners – many of their programmes will be sliced if not totally jettisoned. If you’re unemployed, don’t expect much help from the budget (it will end up destroying jobs – especially through investment cuts).
What struck me most is the proposition that Child Benefit should be taxed. This featured on RTE’s This Week (the weblink to the programme is unfortunately not available). The Minister for Social Protection claimed her preferred position was to tax Child Benefit since this would protect the most vulnerable. The ESRI’s Professor John Fitzgerald made a similar statement – that those on high incomes would be taxed while the vulnerable would be spared. This view shows a lack of appreciation of what can happen to hundreds of thousands of households struggling on modest incomes.
Of course, Child Benefit will not be taxed in this budget; apparently, the computers in Revenue and the Department of Social Protection still can’t ‘talk’ to each other. And here’s another thing: taxing universal benefits does not undermine the principle of universality. Taxation can introduce a progressive feature in payments that are granted to all, regardless of income or employment.
But the emphasis on ‘protecting the vulnerable’ ignores the fact that people at work are also vulnerable. Yet it is this crucial group that would be hit in the ‘preferred option’. It underlines a view that social protection is for the poor, rather than for protecting the social.
What would happen if Child Benefit were taxed? How would some income groups be hit? Those on social protection would be protected – but low and average paid should watch out.