SFA Pre-Budget Submission 2015 - "The Path to Growth"

In the SFA’s Pre-Budget 2015 Submission to Minister for Finance, Michael Noonan, TD, we argue that the fiscal adjustment should only deliver the minimum net fiscal adjustment package needed to reach the 2.9% fiscal deficit target, and not the €2billion previously planned. This would enable the government to put more money back in people’s pockets and boost consumption and investment which will lead to growth. Our policy priorities include:

SUPPORT INVESTMENT AND JOBS THROUGH THE TAX SYSTEM
    1. Enhance the EIIS by broadening the criteria and rebranding;
    2. Reform CGT Entrepreneur’s Relief;
    3. Reduce CGT to 20%;
    4. Reintroduce lower rate of PRSI for Employers;
    5. Amend Foreign Earnings Deduction scheme for small firms;
    6. Introduce R&D Tax Credit “Lite” Scheme;
    7. Extend the 9% special VAT rate and cap all other consumer taxes;
    8. Increase the VAT Cash Receipts basis threshold to €2.5mn;
    9. Reform Local Property Tax to make it more equitable and boost consumer spending.

TAXATION OF WORK
Reduce taxes on work by increasing the entry point to the marginal tax rate to €34,800 and reducing the marginal rate to 40%; and dropping the pensions levy. Incentivise more risk-takers setting up their own businesses through expiring the 3% USC surcharge for the self-employed as planned; equalising the PAYE tax credit for proprietary directors and introducing voluntary PRSI contributions for self-employed to access unemployment and illness benefits.

DON’T INCREASE THE COST OF EMPLOYMENT
Irish labour costs are 11th highest in Europe, 16% above the EU average and 30.8% more than our nearest competitor, the UK. Government changes in PRSI, illness benefit, redundancy rebate, health insurance and general taxation all impact negatively. No further costs can be imposed through Budget 2015.

MAKE WORK ATTRACTIVE
Remove social welfare traps on recipients coming back to work and taking up additional hours. Maintain successful JobBridge and Jobs Plus schemes.

EXPENDITURE PRIORITIES
Increase capital spending on infrastructure. Reduce current spending through real efficiency led public sector reform.

For further information, please contact Patricia Callan at Tel: 01-6051602 or e-mail: patricia.callan@sfa.ie .
Close