‘There Will Be Incentives For People To Actually Take Pay Rises’

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 Lucinda Creighton at the launch of Renua’s pre-budget submission yesterday at the Royal Irish Academy, Dublin

Um.

You may recall how yesterday Lucinda Creighton announced Renua’s proposed tax plans which include a 23% flat tax and tax rebates, on a sliding scale, for those on welfare and lower income.

Under the proposals the disposable income of those on middle and higher incomes would increase. But those on the minimum wage would earn less.

This morning, Ms Creighton spoke to Seán O’Rourke about the proposals. Sinn Féin TD Pearse Doherty also took part in the discussion.

Seán O’Rourke: “Is Pearse Doherty right when he says you’re going to have people on the minimum wage paying more?”

Lucinda Creighton: “No, what we are proposing, at the moment, anybody who’s on the minimum wage, is in a trap. So if they receive a €10 increase, which amounts to, a €10-a-week increase, which amounts to €520 – rather than benefiting from that pay increase, they actually end up being worse off in terms of their net take home pay, so they actually end up being down €8, rather than up €10 or part of the €10. Under our proposal, for every extra euro that that person earns, for every extra hour that they work, they will be rewarded. They will be incentivised to work harder. There are incentives for employees [sic] to pay people better and there are incentives for people to actually take and accept pay rises. At the moment, there is no incentive because you lose money because of our bizarre PRSI system, you lose money on the minimum wage if you…”

O’Rourke: “But are you going to retain the present tax exemptions so that the credits that are there for people on low income.”

Creighton: “No, we’re not retaining tax credits. What we are proposing is a direct payment, a graduated basic income for everybody who is a low earner and that’s phased out or graduated out, up to an earning income level of €70,000 and that simplifies the system. It means people can see on their payslip what they’re receiving, what they’re contributing and everybody is incentivised to work. We have to make work pay. People pay lip service to it.”

Read Renua’s submission in full here

Listen back in full here

Previously: Way To Go

Mark Stedman/Rollingnews.ie

47 thoughts on “‘There Will Be Incentives For People To Actually Take Pay Rises’

    1. classter

      Why is it a decent proposal? So far as I can see it will immediately make our taxation system less progressive. Am I missing the point here?

      1. Louis Lefronde

        Progressive tax system my eye, it’s bollocks!

        Politicians have been using the ‘progressive tax system’ to buy votes with your money for years. The progressive tax system penalises middle income earners, and in no way incentivises people to work more hours and over-time. Put simple if you work more, you get to keep more of your income under a flat tax.

        A government should never take more than 25% of your income, ever! If they can’t run a country on budget, then they are incompetent. Any government which takes up to 50% of your personal income is wasteful, corrupt and incompetent.

    2. Neilo

      I agree that it seems sensible enough on its face. Which means it is guaranteed not to fly with the voters.

  1. well

    This is just Libertas , with Declan Ganley in stealth mode.

    The flat tax and anti-tv license stuff are all things he will gain from personally. He has a strong interest in RTE’s spectrum (spectrum arbitrage) that he doesn’t hide, it’s what Rivada Networks does.

      1. Nessy

        Yeah because potentially working a 50 hour week under the above proposal, to earn the same as what was previously earned under a 39 hour week seems like a deadly idea when you’re on minimum wage. . .

        Throw in some extra childcare costs for the longer hours you’re away from home and you’re practically partying in the Bahamas

        This is an absurd and ludicrous proposal which does nothing for equality and only widens the gap between the rich and the poor. Pure right-wing, elitist economical nonsense

          1. Nessy

            Met Eireann are predicting there’ll be light showers of empathy scattered sporadically along with a few cents/euros during the course of the this budget.. We might see some of that elusive wealth/recovery yet!

      2. Neilo

        You know, sometimes people can hold different opinions. It’s not a moral failing, just a hallmark of becoming a grown-assed adult.

  2. Spare

    They’ll get 10 seats max (on their best day) so this is never going to happen. FG or god forbid FF wouldn’t let it. But at least they’re putting something out, unlike Soc Dems.

  3. Slugger

    I’m no tax expert, but presumably they’ve focused on the one instance of a pay rise leading to a net loss.

  4. Mr. T.

    “for every extra hour that they work, they will be rewarded”

    Oh thanks Lucinda. So someone gets paid more for working more.

    3 seats max.

  5. perricrisptayto

    ” It means people can see on their payslip what they’re receiving”
    I never had this particular problem in all of my working life to date.
    It’s the bits that are robbed every week to maintain the/ perks/pensions/ lifestyles of the political ruling class of the day, that get to me.

  6. cosine_beag

    Someone on minimum wage in Ireland earns €17,542.2 per year.

    If they earn €10 extra per week they will as Lucinda says, earn an extra €520 which will take their annual salary to €18,062.2

    According to Deloitte’s calculator (http://services.deloitte.ie/tc/Default.aspx) (which should not be taken as gospel) in the first instance you will have an annual take home pay of €16,960.00 after tax, PRSI and USC whereas in the second case, you will have a take home pay of €17,341.00

    Those are the facts. It would appear Renua have not done their sums correctly or that the deloite calculator is out of whack, or that the annual figure I’ve used for the earnings of someone on minimum wage are wrong.

    1. Anne

      “hey actually end up being worse off in terms of their net take home pay, so they actually end up being down €8, rather than up €10 or part of the €10.”

      Lucinda, caught in a trap, there’s no way out, thinks they’ll be down 8 squid, how did she come to this figure at all?

    1. collynomial

      Her belief system won’t allow her divorce from reality, rather she and reality have permanently separated.

  7. diddy

    It would have been nice to see her joust with an independent economist on this proposal instead of having a widdling contest with “that there Doherty” … this is hong kong economics that will benefit high earners most.. load of me bollo

  8. El NoNoNoNoYes

    Was there an ‘Arbeit macht der frei’ banner behind her while she was saying this by any chance?

    1. Rob_G

      I don’t like this casual allusions to Nazis when criticising people you just happen not to like – ok, so maybe you disagree with Joan or Lucinda; they are hardly Nazis.

      Kind of disrespectful to the people who actually suffered under Nazism, tbh.

  9. Earthworm Jim

    There’s a very loud left presence in politics in this country and the rest is pretty much centre without straying too far left or right from centre.

    So for that reason, I will welcome a party leaning firmly on the right, not that I would necessarily agree with everything they say, or even vote for them, but because it would provide some balance. Balance is always a good thing, as are options.

    Not too sure that Renua are really a right party though, think this is just a gimmick.

    1. well

      Both FF and FG are right, and Labour is on FG lease. This country has never had left wing parties in power.

      1. Earthworm Jim

        FF and FG are certainly not right, no matter how much people like to say they are. Most progressive tax system in Europe, incredibly generous social welfare, these are not the features of a government on the right.

        Most parties in Ireland are centre, with the odd policy going either way. Sinn Fein are all over the shop for example.

        1. realPolithicks

          Don’t believe the hype. It’s actually the most progressive “income tax” system, other taxes such as USC and VAT are not even remotely progressive. When you add them all up there is nothing progressive about Ireland’s “tax system”.

          1. Earthworm Jim

            500,000 people being moved out of USC in this years Budget. Every country has VAT bar some emirates and the likes, should we have some sort of means testing on VAT? Maybe only poor people could wear red jumpers and people with red jumpers would only pay 5% VAT?

            And there’s no VAT on food either. FG would be considered communist in the US ffs.
            I’m not saying they’re fantastic but this nonsense that they are some sort of repressive hard right government is a joke. Look up the North and compare.

    2. Madra Rua

      I just spat my soup over my screen “a very loud left presence in politics in this country and the rest is pretty much centre”. Someone needs to teach you your left and right again.

      The mass privatisation of all public services is hardly a centrist or left-wing move. Although I do think the political spectrum is incredibly situational – the democrats in the US are seen as left-wing, but if applied to the UK system they’d fall a lot closer to the Conservatives than Labour or the Lib Dems.

      1. Earthworm Jim

        yeah that’s kind of my point as well, each party verges right on left depending on the paticular policy in this country. We have nothing like the US Republicans, or anything nearly as organised as Syriza thanks be to heck :)

  10. Louise Hannon

    Why not keep it simple and reorganise the tax bands by raising the point where people start to pay tax. That way those on low pay benefit . HCAs recently won a 50c pay rise an hour which after tax etc. Worked out at 2c an hr extra. That’s just one example

    1. Earthworm Jim

      not disagreeing with you, but why can’t people who are in the middle have a little back? They pay huge taxes and get nothing back interms of rent relief, medical cards, transport etc.

      They’re a large silent majority, silent being key

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