McNamara rows in behind Budget

CLARE Labour TD Michael McNamara will not vote against some of the main taxation provisions in Budget 2013, despite dissatisfaction with the Government’s failure to introduce a tax on annual pensions over €100,000.

According to reports on Wednesday morning, Deputy McNamara was considering his support for the main taxation provisions. He told The Clare Champion he had robustly argued for the introduction of an additional 3% Universal Social Charge for pensioners earning over €100,000 at Labour Party parliamentary meetings behind closed doors.

“A new solidarity tax would not have raised enough money to avoid making significant savings elsewhere but it would have shown we are all in this together,” he said.

Deputy McNamara said he is unhappy that self-employed business people, who create employment, pay a universal social charge of 10% and argued that former government ministers, high paid civil servants and bankers receiving large pensions should be contributing a lot more in taxation.

While Deputy McNamara supports the removal of the universal social charge exemption for pensioners earning over €60,000, he doesn’t believe this goes far enough.

Acknowledging that substantial savings have to be made in a number of Government departments including Social Protection, he believes children’s allowance should be taxable. He pledged to continue arguing for this measure as a fairer means of making savings instead of the universal €10 cut to all recipients before the social welfare changes are introduced next April.

Clare Fine Gael Deputy Pat Breen claimed Budget 2013 included a number of significant job creation measures that will protect existing jobs and create new ones.

He said the 10-point Tax Reform Plan includes measures such as reforming the three-year corporation tax relief for start-up companies to allow unused credits to be carried forward; increasing the cash receipts basis threshold for VAT from €1 million to €1.25m and amending the close company surcharge.

He also pointed out amending the R&D tax credit by doubling the initial spend eligible for credit from €100,000 to €200,000 to encourage innovation and business expansion and extending the Foreign Earnings Deduction for work-related travel to certain countries and beyond the BRICS would benefit small and medium enterprises.

“Ireland has a large export market which has been making steady progress over the last 18 months, supported by a growing indigenous sector, which is boosting our export growth. Budget 2013 contains measures which will address the difficulties many SMEs face in today’s difficult economic climate.”

Senator Tony Mulcahy noted it was a good budget for Shannon. “This is the culmination of the package announced on Monday to facilitate the construction of hangars. There was 600 people involved in the construction of Aerospace alone and it’s not hangar, it’s hangars.

“The big items were that the pension was left alone, the disability allowance, which is obviously a huge personal one for me, was left alone. There is a cut to the respite care grant of about €225 but I don’t think that will do tremendous damage to any budget.

“The county council will be collecting the domestic rate and there is a 15% leeway for the much hammered commercial and small businesses in the county who have been carrying all that burden since 1977. There is a 15% float there where the county council can decide whether they will cut the commercial rate and I will certainly be calling on Clare County Council and councils up and down the country to do that. That will be a big help to small businesses.”

Senator Martin Conway meanwhile said it was a difficult Budget. “It was never going to be easy. There were elements to it that I would have preferred didn’t have to happen. I would have much preferred to see a means tested approach to child benefit. That said, I would hope that in future budgets that will come in. I would have hoped that there wouldn’t be a cut to child benefit particularly for middle Ireland, who very much rely on it. Overall I am pleased with the fact there hasn’t been any reduction in PA hours or home help hours for people with disabilities and older people as had been feared.”