ESRI says Budget 2014 hit spending power of low income groups most
The Economic and Social Research Institute has said Budget 2014 had its greatest impact on the spending power of low income groups, which declined by 2% as a result of its measures.
Taking changes to direct and indirect taxes and social welfare transfers into account, the ESRI said top income groups lost 1.7% of their income and spending power in the latest Budget.
Middle income groups faced the least impact – losing 1% to 1.2% of their spending power.
Combining the impact of all budgets since October 2008, the top 10% of income earners suffered the biggest impact, with a cumulative loss of 15.5%.
This was largely a result of tax increases and cuts in public sector pay.
The lowest income groups had a loss of 12.5% over the five-year period, while for middle income groups the budget loss has been 11-12%.
The ESRI said, contrary to the perception of the squeezed middle, the biggest budget-induced losses have been felt by the highest earners, followed by the lowest earners.