Before the general election, Sinn Féin’s supplementary budget serves as the party’s final appeal to the public. The challenge was two-fold: Firstly, it was crucial for the party to honour the pledges they had made regarding housing, healthcare, transportation, income equality, and childcare. Secondly, they needed to convince undecided voters of their credibility and to assuage the concerns of those naturally hesitant about Sinn Féin. A tricky proposition, considering their tendency to outspend the governing parties.
The focal question regarding Sinn Féin’s alternative budget: how does it measure up? It’s substantially large – with an overall pledge of €12.4 billion, 50% more than the government’s €8.3 billion.
Another notable point is the detectable shift to the left as the party tries to solidify its foundational support in an uncertain political climate.
Its primary promise is the eradication of the Universal Social Charge (USC) for earnings below €45,000, a concept that has been a part of Irish fiscal policy since the Celtic Tiger’s fall. Some economists favour the USC as it broadens the tax base, ensuring most workers contribute some form of tax.
The plan is to first eliminate USC for income below €30,000 in 2025 (costing €1 billion) and then progressively raise the ceiling to €45,000, which would amount to just over €2 billion annually.
Conversely, their strategy for generating more revenue involves increasing taxes for higher earners. A 3% solidarity tax would be levied on those with incomes exceeding €145,000, and tax credits would gradually disappear for those earning more than €100,000.
The budget outline proposes a hike in residential stamp duty to 2 per cent for houses priced over €700,000 and 5 per cent for property valued above €1 million, as compared to the current 1 per cent rate up to €1 million and 2 per cent beyond. Additionally, a fresh €400 property charge will apply to owners of a second home. Such proposals are likely to constrict the tax base, as highlighted by the independent Parliamentary Budget Office in their pre-budget analysis. The report also reveals that 79 per cent of the total income tax revenue comes from the top 20 per cent of wage earners.
The proposal by Sinn Féin might not overburden high-income individuals, but reduced tax base can be expected. The budget also outlines major spending plans, including a promise to pour an additional €4 billion into housing by 2025, the total abolition of the television licence fee, the removal of student fees which may save students €1,500 in 2025, reduced childcare costs, widespread free school transportation, raising child benefits by €10 a month, and upping average pension and social welfare benefits by €12.
It remains to be seen whether Sinn Féin can salvage its dwindling popularity before the election. When queried regarding the 5 per cent spending increase limit recommended by the Irish Fiscal Advisory Council, Pearse Doherty, Sinn Féin’s finance spokesperson, responded negatively. He described this cap as random, stating that it was initiated by Fine Gael and Fianna Fáil, yet neither parties have abided by it and Sinn Féin disagrees with it. Doherty anticipates that the USC cut-induced loss of exchequer revenue would be offset by economic growth, resulting in a net surplus. Furthermore, with the USC cuts, an average worker would be at least €1,000 better off, in addition to a €100 tax credit and the one-time cost of living measures, a pledge similar to that made by Finance Minister Jack Chambers for Budget 2025. Doherty’s contribution to the party’s financial policies over the past 15 years showcased his importance during the conference.
The one-off measures regarded are distinct from the financial plan bundle and will necessitate an extra €2.3 billion expenditure, a figure that exceeds the government’s forecast. This includes twice separate double payments for child benefits in October and December, €450 in electric credits, and lump sum payments for individuals reliant on welfare, pensions, and disability payments.
It’s always been a standard assumption that Sinn Féin outspends governmental parties. The concern for some electors, however, lies in entrusting it with public funds to keep a balanced ledger.
In a fortuitous turn of events for the party, this was the week when three instances of prodigal public expenditure gained public notice: the leviathan national children’s hospital, the €336,000 Leinster House bike shed, and the €1.4 million security cabin at Government Buildings.
These instances were cited numerous times in the news conference. “We will not be negligent and wasteful with public funds,” assured party leader Mary Lou McDonald. Rest assured that Sinn Féin will pointedly mention these three examples every time Fine Gael and Fianna Fáil allege it can’t be trusted to govern the economy.