Social welfare should increase by 20% and the minimum wage should rise to nearly €13 per hour, according to Social Justice Ireland.

In its latest pre-budget briefing document, the independent think-tank warns that the most vulnerable must be protected as the cost-of-living continues to spiral.

It says tax-increases are ‘unavoidable’ in the coming years – and urges Government to invest in social housing and climate change projects.

Social welfare

On Breakfast Briefing this morning, SJI Director Sean Healy said a 20% social welfare increase is the bare minimum needed.

“We didn’t just pluck this figure out of the air,” he said.

“In the last three budgets, two of them gave no increase whatsoever to core welfare rates and the other one, the most recent one, gave an increase of €5.

“That means in effect that the actual value of the welfare payment has fallen by almost €20 and that doesn’t take into account inflation in 2023. So, a minimum increase of €20 is a must.”

Mr Healy said reported tensions in Cabinet over calls for a €10 increase, “say an appalling amount about how we think we should be addressing the situation that poorest and hardest hit are actually finding themselves in at the moment.”

Minimum wage

The SJI director said we should not wait until the budget to increase the minimum wage.

“It is not just the €20 increase in core welfare rates, there should be a living wage of €12.90 per hour introduced as well,” he said.

“The minimum wage should in fact be moved directly now to the living wage at €12.90. Not just at €12.13 or €12.17 as was being suggested the other day by the Tánaiste.”

Taxes

He said the investment must be funded by increasing taxes – but not income tax.

“I think we have to face up to the fact that if we are going to provide the services we want and the infrastructure we want then we have to increase our overall tax take,” he said.

“Not income tax, but overall tax. We are not a high-tax country overall; we are a country that has capacity to increase its tax take.

“So, for example, we would be recommending a minimum effective corporate tax rate that would bring in about €1bn extra.

“There are some corporations who would be in Ireland’s top 100 corporations in terms of foreign direct investment that would be paying little or no tax on the profits they make.”

Cost-of-living

Mr Healy said the cost-of-living crisis has hit everybody – but it is the poorest 20% who are most at risk.

“These are people who are depending on core welfare rates, people who are in low to middle income jobs,” he said.

“They should be the priority grouping in this budget because it is not going to be possible for Government to give everybody what they want.”

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