• -
  • irishtimes.com - Posted: April 7, 2009 @ 4:37 pm

    The Budget – First Thoughts

    Harry McGee

    There have been so many leaks in the past week that there were very few surprises when Brian Lenihan unveiled his second (unscheduled) Budget within 10 months of becoming Minister.

    The Government was never going to go for a borrowing requirement of 9.5 per cent of GDP.

    Still, the 10.75 per cent target will be attacked as being too high and the fact that the cut-backs will amount to almost the lowest possible level, €3.25 billion, will also come under fire from Fine Gael… and with some justification. It all seems a long way from the €5 to €6 billion that Brendan Smith blurted out only three weeks ago.

    The other area which will come under scrutiny is the bias towards tax increases rather than public spending cutbacks. Sure, the scalpel was applied earlier this year. And Lenihan has promised harsh medicine ahead in the coming years (changes in tax bands, carbon tax, property tax, means-testing of child benefit). But the cuts that will be applied this year are modest (with a fair whack being taken from the capital side).

    Lenihan pushed the boat out for TDs and Senators first. And with one fell swoop most of the  controversial perks and allowances have fallen.

    That was necessary.  The new asset management agency will need to be looked at closely. Lenihan said that the assets will be bought for considerably less than thier book value. The critical question, of course, is for how much? Privately the Government has been saying it will be low. But how low is it prepared to go?

    Social Welfare has been left largely untouched. The abolition of the Christmas bonus will be a big topic on Joe Duffy tomorrow but Fianna Fail TDs are saying that it’s still a long way away and politically survivable.

    Those on middle incomes are taking a big whack between the new income levies and a doubling of the health levies. There are also increases in insurance levies. And the PRSI ceiling has been increased to €75,000.  Everybody earning over 50 grand a year will a couple of grand worse off tonight. Of the old reliables only diesel and cigarettes have taken a hit because of the threat posed by cheaper prices in Northern Ireland to petrol and alcohol sales.

    Another measure that wll require a closer examination is the incentive to allow public servants retire at 50. I suspect that many teachers will take up the offer to retire early and get 75 per cent of their pension. Of course, their jobs are unlikely to be replaced, which will have serious implications for pupil-teacher ratio.

    Nothing on the stimulus side. Little on reform or on jobs.

    The Commission for Taxation is being portrayed as the Big Bad Wolf that will come huffing and puffing at our doors later on in the year!

    • Peter B says:

      I, for one, just cannot take this budget on board, while it is being presented by the same cohort who effected policies which are the cause of this draconian budget.

      It’s a dark day for Ireland. I have the feeling of being sent by time machine to 1987.

      Not a single policy of any consequence, in relation to reducing unemployment or stimulating economic growth.

    • It was a coward’s budgets for sure…. Not enough done… My question is? Who owns our government, the Bankers, Developers or what do they have to hide????
      They need to stand up and make the right cuts where they are needed. Cut and cap all the government salaries, bankers salaries, stock market salaries, get rid of junior ministers, get rid of some of the commissions that are doing the work of the ministers, create a basic pay for the HSE top exec. €60,000 and let them earn the difference for performance instead of them not caring and wasting money.
      The budget just didn’t go far enough….
      My last and most important request is when oh when is someone going to have the courage to stand up and say enough and call for a vote of no confidence in the government and get them out……
      They don’t have a clue what they’re at and that’s been proven time and time again over the last year and a half. They are still only half way down from orbit and not aware what’s going on, not aware what’s happening in their own land with their own people….
      Mr. Cowen let me tell you now you will have many more businesses closing in the next few weeks, months, and I bet you don’t even care…… How does it go: last one out turn off the light ( if the government has the money to pay their bill of course) :-(
      The whole world is laughing at the greed of the government and the way the people of Ireland are not doing anything about it. We are one of the most corrupt states of Europe and by that I mean our governement.
      Make the Change… Do something to go down in history for…. Clean up our state… Untill this is done we don’t stand a chance……

    • Dan Sullivan says:

      A vote of no confidence won’t lead to the government being voted out as they have a majority in the Dáil, fact is the voting on the budget is a confidence issue and were they to lose one they would have to go a la the Jim Kemmy Budget ’82.

    • LP says:

      The last days of Fianna Fáil are upon us.

      We are now experiencing the final act of the real-life drama, which we all have expensive ringside seats for, that began with Charles Haughey. When Fianna Fáil started taking bribes at the top it was inevitable that the greed would mutate into something like this.

      The only question remaining is whether Fianna Fáil will swop places with Labour in the next election, or become as small as the Green Party, who themeselves are likely to disintegrate over this disaster.

Search Politics