Siptu's Jack O'Connor has called for the introduction of a levy on all incomes of more than €100,000 in order to raise around €1billion for the establishment of a strategic investment bank to kick-start the economy.
The head of the State's largest trade union, said the revenue generated by the levy, coupled with money from the National Pension Reserve Fund (NPRF), could create a Venture Capital fund for start-up businesses.
Speaking at the Jim Connell festival in Crossakiel, Co Meath, Mr O’Connor said "high earners who are levied through the tax code would receive a dividend on the performance of the funds and could ultimately hope to get their money back.” He stressed that there would be no guarantee that a levy would offer a dividend but claimed that if the State-run VC fund was managed "properly then it is reasonable to assume it could generate a return".
He said the country was in a "terribly precarious situation" and claimed that an innovative approach was needed to generate investment opportunities.
Mr O’Connor said the €3bn VC fund, made up of €2bn from the NPRF and €1bn from the levy, "would increase investment in the economy by 16 per cent this year, without accounting for what additional amounts could be raised through additional borrowing and risk sharing with private investors".
He described growth as the only means by which Ireland could avoid default and cautioned against those who saw default as a quick fix for the economy in the same way that deflationary austerity has been promoted as a fast route to solvency and economic recovery since 2008.
"Those opposed to taxing the wealthy always cite the negative implications for retaining such people in Ireland,” he said. “This risk would be reduced if they could be assured it would only last for a limited period. People on high incomes would doubtlessly complain, but they would get the money back. In any event they wil lose a great deal more in a disorderly default."
Mr O’Connor was speaking as as a number of rallies took place to mark May Day. The largest rally was organised by the Dublin Council of Trade Unions and aw hundreds of people march from Parnell Square to the James Connolly memorial opposite Liberty Hall.
It was attended by representatives of trade unions, socialist groups and left wing political parties and speakers included political representatives from the main unions, Sinn Fein and the Socialist Party.
Speaking ahead of the rally against austerity, Irish Congress of Trade Unions General Secretary David Begg called on the Government to end its "obsession with self defeating austerity measures that have been an unmitigated disaster for Irish society.” He said three years of “severe austerity” had seen “a dramatic surge in unemployment, a bigger deficit and the return of net emigration.”
According to Mr Begg, cutting peoples incomes “would shrink the economy and causes job losses” and he said suggestions that "we must keep cutting wages to restore lost competitiveness”as “bogus and based on hocus pocus economics.”
