Labour want to tax workers to pay for social welfare

jonniebgood1 · 01-07-2012 9:25pm #1

Joan Burton wants to raise PRSI payments on workers.
Gilmore has defended her right to this opinion, hence I would conclude he supports the idea.
Source- http://www.rte.ie/news/2012/0701/tanaiste-defends-burtons-prsi-comments.html

This follows soon after the suppressed report by the ERSI that said "a high proportion of Irish people with children would be better off on the dole than in employment". Source- http://www.irishtimes.com/newspaper/ireland/2012/0613/1224317818878.html

Are labour trying to bring about a situation where we are all better off on social welfare- what the hell are they at? Surely at this time they should be encouraging people to work rather than this type of rhetoric which does the opposite. If people get more money on social welfare than if they get a job then they will not look for work. I believe its known as 'incentive to work', something these labour politicians should show some appreciation of.
I find this mind blowingly stupid and it will colour how people vote next time around.

Pat D. Almighty · 02-07-2012 12:53am

An extra euro per week from both employee and employer wouldn't be such a bad idea, provided we got guarantees that the money would go directly to job creation.

nacimroc · 02-07-2012 12:56am

After the next election, they will be about as popular as the greens!

They should be sued for calling themselves "Labour" when they should be renamed "welfare".

Its like that jobbridge bull$hit they came up with! Took all the normal paying jobs and made them non-paying! Tesco etc. laughing all the way to the bank everyday!

SMASH THE UNIONS · 02-07-2012 1:01am

A while back I would have said that this move is Labour playing to its core voters, the working class and the dole underclass (excuse the term, but it refers to that small section of society that chooses to leech off the dole and didn't work even during the boom years). But this block of voters has drifted to Sinn Fein in recent years, giving that party a boost in the polls while Labour's vote share is falling.

Labour has now become the party of choice for the middle class bourgeouis, mainly public sector workers. This explains why Labour is strongest in Dublin, where most of the civil servants live. This also explains why Labour is so protective of the Croke Park Agreement. Without the CPA as a bargaining chip, Labour would lose its entire voter base. Champagne socialists, pseudo intellectuals, and chancers on 6 figure salaries, like Micheal D. Higgins, do the party's image no favour either. They merely highlight how out of touch they are with the blue collar worker, traditional Labour voters.

Joan Burton's latest comments are possibly an attempt to regain the "dole class" vote with unfeasible populist promises of maintaining the current high rate of welfare payments. I'm blue in the face repeating the figures of our budget deficit, but I think we can all acknowledge that the state is spending way more money than it takes in. Instead of taking the sensible option of reducing welfare payments, Labour decides to squeeze even more tax from our over-burdened workers, thereby disincentivising employment. Madness. The name "Labour" has become darkly ironic as the party seems to have no interest in job creation.

I hope current trends continue and that Labour will go the way of the Greens after the next General Election.

Monty Burnz · 02-07-2012 1:05am

Pat D. Almighty wrote: »

An extra euro per week from both employee and employer wouldn't be such a bad idea, provided we got guarantees that the money would go directly to job creation.

How would the money be spent on 'job creation'? Hire more civil servants?

Good loser · 02-07-2012 1:53am

She's trying to weasel out of her responsibilities again - as she did last year when she 'reduced' social welfare spending by only two thirds of what was promised.

Hope the Troika forces her to deliver this year.

jank · 02-07-2012 4:48am

Bizarre statement by Labour. Why tax workers when the dole is one of the highest in Europe? They should be looking to cut spending rather then looking to raise revenue to match their current spending. FG must be pissing themselves. Whatever you think about them, they are by far the most sanest party in the asylum.

Kinski · 02-07-2012 8:15am

What exactly did she say? The news article linked states "Ms Burton said the benefits that are paid far exceed the contributions and said something has to give."

That sounds like she's saying that either PRSI contributions have to rise to reflect the level of payment one will receive if made unemployed, or else the level of payment has to be reduced.

jonniebgood1 · 02-07-2012 8:32am

Kinski wrote: »

What exactly did she say? The news article linked states "Ms Burton said the benefits that are paid far exceed the contributions and said something has to give."

That sounds like she's saying that either PRSI contributions have to rise to reflect the level of payment one will receive if made unemployed, or else the level of payment has to be reduced.

The Labour leader stood over remarks by Joan Burton, the social protection minister, that PRSI contributions for the social insurance fund needed to be increased.
.....
She said social security contributions in Ireland were "meagre" compared to our EU counterparts. In Ireland, they represented 5.8% of GDP compared to an EU27 average of 10.9%, she said. http://www.irishexaminer.com/archives/2012/0702/ireland/gilmore-backs-burton-over-higher-prsi-199436.html

While she is making her comparisons with the EU27 she should look for average welfare rates and maybe the number of countries that use things such as decreasing welfare to incentivise work. She seems to be talking about all that PRSI covers and as such that needs comparison to see what the 10.9% EU27 figure covers.

antoobrien · 02-07-2012 11:24am

Pat D. Almighty wrote: »

An extra euro per week from both employee and employer wouldn't be such a bad idea

If we see all welfare allowances cut but €1/week as well grand. There has to be give and take, not just take.

I wonder is Joan forgetting that (according to the latest available income distribution stats) published by the revenue commissioners, of the 2.1m people in the labour market 60% earn less than the average wage?

Or maybe she's remembering that they only contribute abut 6% of PAYE and wants to tap them for some income, without caring that it's making welfare more attractive and ultimately going to make it cost more.

plasmaguy · 02-07-2012 7:51pm

Unfortunately tax rises are inevitable if we are to bridge the gap between what we spend and what we take in which at the moment is about 15 billion a year (nothing to do with bank debts before anyone starts, it's the structural deficit).

tayto lover · 02-07-2012 8:05pm

If they reduce wages by taking more tax or PRSI then it is coming to the stage where it won't be worthwhile working anymore. Surely they can see that. There are far too many deductions from wages already.

gandalf · 02-07-2012 9:22pm

I posted this response elsewhere today.

They should be looking at getting the cost of government under control first and foremost before they cripple both the business and general community with more taxes.

It’s becoming more apparent that all our politicians no matter what hue or leaning they have are living in a different reality to the rest of us.

jonniebgood1 · 03-07-2012 8:08am

plasmaguy wrote: »

Unfortunately tax rises are inevitable if we are to bridge the gap between what we spend and what we take in which at the moment is about 15 billion a year (nothing to do with bank debts before anyone starts, it's the structural deficit).

They should sort out the waste first- higher grade civil servants for example in planning authorities that were busy 5 years ago but are not now, maybe politicians pensions also- it is hard to take that someone like Martin 'I had nothing to do with those voting machines' Cullen gets a big pension as reward for his mistakes.

Count Dooku · 03-07-2012 8:41am

nacimroc wrote: »

After the next election, they will be about as popular as the greens!

not if they will do everything to preserve their public sector core voters from real reforms

NinjaK · 03-07-2012 9:33am

tax is too low for the rich, the dole needs to stay the same.

antoobrien · 03-07-2012 9:57am

NinjaK wrote: »

tax is too low for the rich, the dole needs to stay the same.

Considering 60% of the labour force pay about 6% of PAYE how do you calculate that?

bonzos · 03-07-2012 11:59am

Joan should have a look in any betting shop on any work day to see how the SW money is being spent!

Spudmonkey · 03-07-2012 12:22pm

In the remarks Ms Burton said the benefits that are paid far exceed the contributions and said something has to give.

I'm confused by her comments. If she thinks that benefits paid are far too high relative to payments made, would it not make more sense to reduce payments to a level on par with contributions? Why increase contributions?

Smells like a ploy of going after a section of the electorate who they have lost to SF and the ULA.

rasper · 03-07-2012 1:07pm

sounds like another increase tax and then "having to decrease" sw rates to balance out, imagine most workers at this stage are paying more in PRSI and USC than PAYE tax so PRSI is the target.
All sounds like disaster to me no reform just real money sucked out of the economy, who voted for these clowns?

Markcheese · 03-07-2012 3:15pm

"tax the rich " and "dole gets spent in the bookies / pub " are just rhetoric .... The rich are always someone else, ironically for low paid with families the " rich " now include social welfare and pension recipients .
The undeniably rich will just move their homes or a portion of their income out of the state if you over tax ... Lower down the scale don't have that option ....

Something's got to give .....

john47 · 03-07-2012 4:52pm

In an attepmt to stay away form rethoric...

The country is spending too much money and not taking in enough taxes to pay for it.

FF + PD's + Greens created the problems not FG or Labour.

But FG & Labour have to fix it. So what do we suggest...

Reduce taxes - even more of a deficit.
Increase taxes - more unhappy workers.
Reduce S/W - more unhappy doel collectors.
Increase S/W - more unhappy workers.

There's no easy solution but the money has to be either added in or taken away. So SF/ULA answer - dont pay your taxes, your household charge or NPPR. We (the elected officials) will also use tax payers money to go around the country advising people NOT to pay their taxes. Hypocritical me thinks...If everyone takes SF/ULA advice there will be not enough taxes paid increasing the deficit even more...

JR

jonniebgood1 · 03-07-2012 4:59pm

john47 wrote: »

FF + PD's + Greens created the problems not FG or Labour.

But FG & Labour have to fix it. So what do we suggest...

Reduce taxes - even more of a deficit.
Increase taxes - more unhappy workers.
Reduce S/W - more unhappy doel collectors.
Increase S/W - more unhappy workers.

A decent analysis but I would point out that the greens came to power in 2007, I would not blame them for our problems which were created long before this. Our main problem being over reliance on unsustainable taxes.

john47 · 03-07-2012 5:02pm

jonniebgood1 wrote: »

A decent analysis but I would point out that the greens came to power in 2007, I would not blame them for our problems .

I blame them as they helped keep FF in power & they voted with FF for the bank bailout which most people would now agree was a huge mistake. (Then again Labour were the only party to vote no to it!)

John Ryan

Count Dooku · 03-07-2012 7:15pm

john47 wrote: »

The country is spending too much money and not taking in enough taxes to pay for it.

Ireland in top 10 to income tax rates, main reasons for lower tax take are low corporate tax and small taxes for low paid workers

john47 wrote: »

FF + PD's + Greens created the problems not FG or Labour.

FG and Labour didn't do anything to stop it and they were competing in populism with FF

john47 wrote: »

Increase taxes - more unhappy workers.

Increase taxes = reduced tax take
In 2011 income tax take + USC + VAT was less than 2010 income tax take + health levy + VAT mostly due reduced spending
All increases for tax take came from corporate tax
You taking money through income taxes as result people spend less, you get less VAT and you have to pay more for welfare for redundant retail workers

Monty Burnz · 03-07-2012 7:25pm

Count Dooku wrote: »

FG and Labour didn't do anything to stop it and they were competing in populism with FF

I've asked this many times but who is to blame for forcing Labour and FG into competing on populist ground? FF or the electorate?

I blame the electorate.

DarkJager · 03-07-2012 7:27pm

Would somebody please remind what this extortionate amount on my wage slip called USC is contributing towards??

Sierra Oscar · 03-07-2012 7:40pm

gandalf wrote: »

I posted this response elsewhere today.

They should be looking at getting the cost of government under control first and foremost before they cripple both the business and general community with more taxes.

It’s becoming more apparent that all our politicians no matter what hue or leaning they have are living in a different reality to the rest of us.

I totally agree with you that we need to cut the cost of our Oireachtas - but you are in a different reality yourself if you think that will even put a dent in our current budget deficit.

In order to tackle the budget deficit in a meaningful manner then either the budget for the Department of Social Protection will have to be reduced, or else we must resort to raising tax rates and broadening the tax base in order to cover the cost of our generous social welfare system.

Hopefully we will have a sensible compromise between the two options.

tayto lover · 03-07-2012 8:26pm

Sierra Oscar wrote: »

I totally agree with you that we need to cut the cost of our Oireachtas - but you are in a different reality yourself if you think that will even put a dent in our current budget deficit.

In order to tackle the budget deficit in a meaningful manner then either the budget for the Department of Social Protection will have to be reduced, or else we must resort to raising tax rates and broadening the tax base in order to cover the cost of our generous social welfare system.

Hopefully we will have a sensible compromise between the two options.

AND not a word about creating jobs and getting money into the economy to make it flourish. Just cut cut cut.

christmas2012 · 03-07-2012 8:29pm

want to cut the cost of welfare? get rid of jobbridge and fas,for a start,as they are a quango that creates unemployment by hogging up what could have been paid jobs advertised..kill two birds with one stone..

DublinWriter · 03-07-2012 8:38pm

This would be the same Joan Burton with the 'special advisor' on €128,000 a year?

Oh God...

I'm self-employed and I pay 5% PRSI for nothing, nada, zip, I'm not entitled to social welfare should my work dry up. I'm paying €2,500 for health insurance for my family with Aviva - and that doesn't even cover our GP or Dentist bills.

I've seen too many examples of people in this country who know how to milk the system. Social welfare is meant to be a safety net, not a bouncy castle.

Markcheese · 03-07-2012 8:42pm

DarkJager wrote: »

Would somebody please remind what this extortionate amount on my wage slip called USC is contributing towards??

Aparently to a nation where there are lots of takers buy not enough givers..

Sierra Oscar · 03-07-2012 8:51pm

tayto lover wrote: »

AND not a word about creating jobs and getting money into the economy to make it flourish. Just cut cut cut.

We need to create jobs undoubtedly - but we also need to get our budget deficit under control.

If you have a magic money tree that will allow us create tens of thousands of jobs without making any budgetary adjustments then I advise you to get onto the Department of Finance and see if they have any advisory roles up for grabs.

goat2 · 03-07-2012 9:02pm

all of us are down to the bone with what our wage is covering, how the hell can we afford to live if we have to give more, i for one cannot afford any more, i have cut out alot down to the bone, now what, stop living, to give to those who do nto want to work and never did work, (long term dolers)

ManMade · 03-07-2012 9:03pm

I really wish there was a far right (not the racist type) for me to vote for. People getting money for nothing for an unlimited time frame makes me so made. Cut welfare, cut minimum wage, cut vat and fuel taxes thus reducing the cost of living. It's fuel for thought when you go to Europe and compare the cost of every day items.

gerryo777 · 03-07-2012 9:11pm

ManMade wrote: »

I really wish there was a far right (not the racist type) for me to vote for. People getting money for nothing for an unlimited time frame makes me so made. Cut welfare, cut minimum wage, cut vat and fuel taxes thus reducing the cost of living. It's fuel for thought when you go to Europe and compare the cost of every day items.

This is part of the problem.

In this country the government seem to think that if wages/take home pay goes down and VAT goes up and then on top of that introduce a household tax, water rates, septic tank charges and any other charge they can think of, the domestic economy will recover.

People have had enough.

tayto lover · 03-07-2012 9:33pm

Sierra Oscar wrote: »

We need to create jobs undoubtedly - but we also need to get our budget deficit under control.

If you have a magic money tree that will allow us create tens of thousands of jobs without making any budgetary adjustments then I advise you to get onto the Department of Finance and see if they have any advisory roles up for grabs.

Taking more money out of peoples wages means less money to spend in the economy which will mean even more job losses. More job loses = more on dole and SW. It's not that hard to understand but they don't seem to get it. They need to get rid of the advisers they have now.

djpbarry · 03-07-2012 10:02pm

tayto lover wrote: »

AND not a word about creating jobs and getting money into the economy to make it flourish.

What money?

tayto lover wrote: »

Just cut cut cut.

There is little alternative. Large tax increases are not an option at present.

Dannyboy83 · 03-07-2012 10:38pm

jank wrote: »

Bizarre statement by Labour. Why tax workers when the dole is one of the highest in Europe? They should be looking to cut spending rather then looking to raise revenue to match their current spending.

Only way it makes sense to me, is if it's poor thought out diversionary tactic.
i.e.
Take the pressure off with regard to the CPA, by giving the peasants something else to fight over.

tayto lover · 03-07-2012 10:43pm

djpbarry wrote: »

What money?
There is little alternative. Large tax increases are not an option at present.

They should use some of the Pension Reserve fund to generate jobs, help small industries etc.
Again taxes and extra charges decrease consumer spending and only cause more job losses. What they are doing is simply not working so try something else. People have very little left as it is.

retroactive · 03-07-2012 10:50pm

To quote myself from elsewhere. Joan Burton alluded to increasing PRSI contributions required by employers and employees in the December? Why? Because the social welfare bill is costing too much. I hate that woman but i'll try and avoid histrionics on this topic.

The cost of working relative to being on social welfare in this country is absurd. Claiming social welfare and other benefits has become viable way of life for people of this country. IBEC has previously stated the reservation wage in this country , that is a wage that would incentivise someone to move from social welfare to paid employment, at around 32,000. Using child benefit as an example - The current system consists of (i) child benefit (ii) the qualified child increase and (iii) the family income supplement. The second and third element disincentivises work. i.e Should a person find gainful employment, they not only lose their dole but also the benefits connected. Thus, employment will not be desirable.

...and that's just one aspect of public expenditure on social welfare. Moving to the private sector - The private sector has consistantly fall foul of a legislature trying to shift massive additional liabilities onto employers. For example, Joan Burton's proposals regarding statutory sick pay equates to the cost of employing 2500 people.

It is clear that to balance the cost of social welfare crippling the private sector is one option. However, decreasing compounding payments to those on social welfare. i.e to balance, you can decrease the cost or increase the price.

christmas2012 · 03-07-2012 10:51pm

You know why it is so high because of jobbridge and fas..shut the quangos down they create enough unemployment..

K-9 · 03-07-2012 10:54pm

We need a sustainable PRSI system, the North has an Employee rate of 11% with Employer contributions on top, and they have as near as a free health system compared to ours. Their welfare rates are much lower though so we have to find a balance there somewhere.

PRSI and the levies have been tinkered with but what exactly is the USC for? Just seems an extra tax going into general Exchequer funds, while the social funds remain hopelessly underfunded. The USC should be a contribution to the social fund, instead its a book-keeping exercise.

Remember Employer PRSI is now at a reduced rate for minimum wage or so jobs, so the Government is subsidising low cost labour there.

gandalf · 03-07-2012 11:34pm

Sierra Oscar wrote: »

I totally agree with you that we need to cut the cost of our Oireachtas - but you are in a different reality yourself if you think that will even put a dent in our current budget deficit.

For clarity when I said Government I meant the Oireachtas, the Civil Service, the Public Service and the Social Welfare bills. I probably was not clear with that so apologies.

In order to tackle the budget deficit in a meaningful manner then either the budget for the Department of Social Protection will have to be reduced, or else we must resort to raising tax rates and broadening the tax base in order to cover the cost of our generous social welfare system.

Our tax system is widening but our cost base is not being addressed in any real meaningful manner at all. Personally I believe that core social welfare needs to be left until last in this process.

The main area that needs to be addressed is the payroll costs and I personally believe the Croke Park Agreement needs to be shelved and a real reform of the Public Service needs to occur where it is exposed to reality of the employment market. Ie if you have too many staff you can make the surplus redundant.

The age of a job for life has gone and the tax payer should not be burdened when they are not getting an optimal return for their investment.

Hopefully we will have a sensible compromise between the two options.

Unfortunately given the performance of this Government and their reluctance to make the hard decisions I believe the only outcome is more taxes and no real reform or either the Public Service payroll or the Social Welfare system.

KyussBishop · 03-07-2012 11:48pm

The argument about spending for job creation etc.: If we were another country, without a barely sustainable debt (which we have to get under control before it becomes totally unsustainable), we 'might' have been able to afford a bit of short term deficit spending for that, but we're screwed enough by our existing debt that we don't really have any options other than to cut (and that's the crux of it all).

Any job creation schemes or the like, would have to be able to show in advance that they would provide more in the long run, than they take away with the deficit they create (which is a tall order).

retroactive wrote:

The cost of working relative to being on social welfare in this country is absurd. Claiming social welfare and other benefits has become viable way of life for people of this country.

People across the forum need to stop with these points that imply that everyone on welfare is there as a lifestyle choice, and that they choose to be there instead of working.

You may not mean to imply that, but that's how it comes across so you need to qualify what you say to make that clear; there may be a minority who do abuse welfare like you say, but the way it's put generalizes to all, and there are a lot of posters doing the same thing.

djpbarry · 04-07-2012 9:48am

tayto lover wrote: »

They should use some of the Pension Reserve fund to generate jobs...

I think quite enough of taxpayers’ money is already spent “generating jobs”, don’t you?

tayto lover wrote: »

What they are doing is simply not working...

Well, that’s not really true – the deficit is shrinking in line with targets.

john47 · 04-07-2012 10:22am

Count Dooku wrote: »

FG and Labour didn't do anything to stop it and they were competing in populism with FF

Thet were not in government, like at the moment SF are being populist but they are just empty vessels.

john47 · 04-07-2012 10:24am

Count Dooku wrote: »

In 2011 income tax take + USC + VAT was less than 2010 income tax take + health levy + VAT mostly due reduced spending

Dont forget to factor in the huge drop in employment which results in both a drop in income tax and then people having less disposable income to buy things therefore reducing VAT intake.

john47 · 04-07-2012 10:28am

tayto lover wrote: »

AND not a word about creating jobs and getting money into the economy to make it flourish. Just cut cut cut.

But do you want the government to start employing people, then someone else will have the arguement - there are too many people working in the public sector, we must reduce the numbers in the public sector now - oh, hang on doesn't Leo Vradkar want compulsory redundancies in the public sector - well there you go.

The government cant put money into the economy we dont have.
The government cant employ more people.

JR

Manach · 04-07-2012 10:41am

There is very little discretionary spending to allow for investment spending for ordinary PAYE types. Prior to this State recession, one could afford to use savings to enroll in training courses to upskill. This benefited in the not only the trainee, but in the end the employer, the course provider and the economy in general. Nowadays not only has the increased tax burden put training into the luxury column of day-to-day economics, the policy by the Labour Mins. of Education to cut the tax rebate on training has impacted this in a negative fashion.

ednwireland · 04-07-2012 10:54am

Sierra Oscar wrote: »

We need to create jobs undoubtedly - but we also need to get our budget deficit under control.

If you have a magic money tree that will allow us create tens of thousands of jobs without making any budgetary adjustments then I advise you to get onto the Department of Finance and see if they have any advisory roles up for grabs.

but but, this is exactly what they arent doing, start at the top and reform public sector spending (yes they are tinkering round the edges but things like the pay rises to special advisors of the average industrial wage is wrong)

Labour want to tax workers to pay for social welfare

Comments