Budget will support people who “get up early every morning,” Simon Harris says

Tánaiste and Finance Minister Simon Harris has framed this year’s Budget as support for people “who get up early every morning and go to work.” Speaking at a pre-Budget breakfast briefing hosted by the Mullingar Chamber of Commerce, he said, “if you work hard, you should be able to get ahead, not just get by.”

Harris said strong towns and communities depend on people prepared to work hard to improve their position. He also promised a business package aimed at reducing business owners’ costs while increasing their ability to make ends meet.

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If you work hard, you should be able to get ahead, not just get by.

As Budget negotiations enter their final stage, Harris said cuts to business taxes and income tax are the priorities. The government has not yet finalized the measures described at the briefing.

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That actually doesn't have a fair distributive impact because if you're earning less than €44,000, you're not going to benefit from that.

Michelle Murphy, a research and policy analyst at Social Justice Ireland, said tax credits would be the fairest way to deliver any income tax package in next month’s Budget. She told RTÉ’s Morning Ireland that changes should be fair and targeted at lower-paid workers.

Social Justice Ireland’s analysis indicates that increasing the two personal tax credits would benefit every worker earning more than €20,000, Murphy said. By contrast, increasing the standard-rate band by €2,000 would mainly change the point at which people move into the top tax rate. People earning below €44,000 would not benefit, she said.

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If we are going to look at changes to the income tax system, then you have to make sure that those changes will be fair, and the benefits will flow to all workers.

Murphy argued that limited resources should target lower-wage workers through the tax-credit system. Middle-income earners would also benefit, she said, because their tax bills would fall substantially if credits increased.

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We should make sure that they're targeted at those lower wage workers and the fairest way to do that really is through the tax credit system.