Ruairí Quinn
Question:62 Mr. Quinn asked the Minister for Finance the steps, if any, being taken by his Department to poverty proof the forthcoming budget; and the extent, if any, to which the last two budgets were poverty proofed. [18882/99]
Written Answers. - Budget Strategy.
Any measures which I introduce in my budget on 1 December next will not have the effect of increasing poverty. I am not going to give any further details of budget 2000 at this stage.
In relation to the 1999 budget, an assessment of the impact on poverty of the tax changes was carried out with the assistance of the ESRI's SWITCH model, analysis provided by the Revenue Commissioners and the Department's own analysis of the impact of the tax package on disposable income. This exercise assessed the tax changes by reference to questions set out in the guidelines for poverty proofing prepared by the NAPS unit of the Department of Social, Community and Family Affairs. I have arranged for the outcome of this exercise to be placed in the library of the House and for a copy to be sent to the Deputy.
In relation to expenditure measures, the responsibility for poverty proofing lies with the spending department. For budget 1999, poverty proofing exercises would have been carried out in the relevant Departments on expenditure items before they were put forward as proposals for inclusion in budget 1999.
A formal poverty proofing exercise was not carried out on the taxation measures introduced in budget 1998, as the formal arrangements for poverty proofing were not introduced until after the Government decision of 1 July 1998 – seven months after the budget. Nonetheless, that budget had a positive impact on poverty through the increases in the basic personal allowances, the restriction in the standard rate of tax, the increase in the PRSI weekly allowance and the increases in the exemption limits. The budget also announced a special initiative to assist the long-term unemployed back to work, consisting of a tax allowance of £3,000 for the employee, tapered down over three years and a double tax deduction for wages for employers who take on the long-term unemployed.