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  • irishtimes.com - Posted: December 8, 2009 @ 6:00 pm

    The Eve of Waterloo

    Deaglán de Bréadún

    There is an unreal air about Leinster House this evening. We are on the eve of the most important Budget since (at the very least) the measures  brought in by “Mac the Knife” MacSharry in 1987. That Budget laid the foundations of the Celtic  Tiger boom: what effect will Brian Lenihan’s speech tomorrow have? If it keeps us out of the bankruptcy boneyard we will be reasonably happy. It seems appropriate to reproduce the first stanza of Lord Byron’s The Eve of Waterloo here. I like reproducing verse that gave me pleasure at school anyway. Below that is a piece from yours truly in Monday’s print edition, which contains all my predictions for the Budget. My one cautionary (i.e., cop-out) note is that some of the final decisions may only have been made today. 

    There was a sound of revelry by night,
    And Belgium’s capital had gathered then
    Her beauty and her chivalry, and bright
    The lamps shone o’er fair women and brave men.
    A thousand hearts beat happily; and when
    Music arose with its voluptuous swell,
    Soft eyes looked love to eyes which spake again,
    And all went merry as a marriage bell;
    But hush! hark! a deep sound strikes like a rising knell!

    Levies for top earners unlikely, but PRSI ceiling may be raised
    Deaglán de Bréadún, Political Correspondent
    Mon, Dec 07, 2009

    Analysis: Cuts to ministerial salaries will be part of Wednesday’s budget

    Never in the history of the State has a budget been awaited with such trepidation.
    Minister for Finance Brian Lenihan’s speech on Wednesday will feature cuts in public sector pay, including 15 per cent off ministerial salaries, child benefit and dole payments will be reduced and the new carbon tax will mean higher prices for petrol and home-heating fuels.
    However, there will not be a third rate of tax and an increase in the income levy for higher earners is now unlikely, although the PRSI ceiling may be raised.
    Plans to bring a greater number of lower-income earners into the tax net have been shelved because of concerns that this would encourage “replacement”, whereby workers on low pay decide to go on the dole instead.
    Likewise, property tax and water rates will not be included in the package, although they may be mentioned as part of a longer-term agenda.
    A cut in child benefit of “about 10 per cent” is on the cards. Payments currently start at €166 a month for the first child which would mean a reduction of around €16. Means-testing has reportedly been ruled out, for now at least.
    The State old-age pension is likely to remain untouched but dole payments – both jobseeker’s benefit and jobseeker’s allowance – are to be cut from €204.30 a week to about €196.
    Dole payments for those in the 20-23 age group are likely to be cut by 20 per cent. The jobseeker’s allowance was already cut to €100 for new entrants under 20 in April.
    The €200 tax on second homes will not be increased.
    The collapse of talks with the unions opens the door for the Government to impose public sector pay cuts of up to 6 per cent. A sliding scale will be used and the amount raised will be “not too far short” of the €1.3 billion target, say Government sources.
    One certainty is that a carbon tax will be imposed. It is expected to put five cents a litre on the price of petrol and diesel. The cost of a bale of peat briquettes is likely to go up by 48 cents.
    Home heating oil would increase by almost €54 for 1,000 litres. A tonne of coal would go up by €56. Gas prices would also rise but not electricity, because the price of carbon is already included in electricity bills. It is expected that the fuel allowance payment will be increased.
    There have been reports that Mr Lenihan was under pressure from Cabinet to introduce a third tax rate. This has been ruled out. However, Mr Lenihan is said to be “toying with the idea” of raising the ceiling of €75,036 on PRSI contributions.
    The renewed programme for government promises to introduce a single 33 per cent rate for tax relief on private pension provision. However, it appears that this is not likely to be part of the current budget package.
    It is understood that VAT will not be cut and that there will be no further impositions on alcohol and little or nothing on cigarettes, because of concern that this will encourage further cross-Border shopping and/or smuggling.
    A 15 per cent pay cut is expected for ministers, top civil servants and university presidents, with a 20 per cent cut in the Taoiseach’s salary. Ministerial salaries would fall to €191,417 and the Taoiseach’s pay would go down to €228,466.
    These cuts would include the 10 per cent voluntary pay cut taken last year.
    © 2009 The Irish Times

    • Desmond FitzGerald says:

      Why should we be surprised that those at cabinet or those whispering in their ear can’t begin to conceive of the juggling ‘ordinary’ people are facing – because those same people have made sure they have never had to juggle their finances.

      Cowen, Lenihan and co simply do not have the intellectual ability to push through changes that firstly hit the wealthy hardest and filters down so that the sting is gone long before the least well off pay anything.

      To prove that gombeenism and sleveenism is alive and well despite everything you only need to listen to the spin that somehow cutting Clowen’s pay to £200k is a good thing – it should be cut far more and the same for everyone from the President down and then the expenses and pensions … plus the fact that the Carey the chief crony is having meetings with Grealish – I don’t know what is worse: Carey doing the dark bidding or Grealish thinking it is acceptable to pull a stunt on his vote to get his constituents something at the expense of others – then again Galway is where Stroke Fahy topped the poll. Irish people truly deserve the politicians they elect.

      All effort will have gone into protecting the perks and expenses and income of about 1500 people who consider themselves part of some golden circle and the ‘ordinary’ people will be made pay for it whether they like it or not.

    • paul m says:

      A pint for the first of the opposition to ask Mr Lenihan “are you not going to ask people to do their patriotic duty this time?”

      If that oaf of a so called finance minister says that there will be no more harsh budgets again he may well yet get lynched by his own backbench!

      oh and lets not forget that the judiciarys salary cannot be cut and only half of them have voluntarily taken the cut that was asked on the last occasion. Deaglán would it not be prudent to put a change to this farce of judges’ protected pay?

      We have criminal bankers, a church riddled with sex abusers and politicians who’ve been hauled up in front of tribunals but not one of them has seen the inside of a prison.

    • part time punk says:

      @ comment 1 – totally agree. Nearly choked on my tea when I saw about Grealish’s talks with the Taoiseach. Then even worse was JHR and JHR jr after getting agreement for a 40 bed hospital in their county. By all means if these projects are worthwhile (pass a cost benefit test, provide good rate of return etc..) they should go ahead but purely doing it just to keep the numbers in the Dáil right is crazy. It’s a zero sum game – giving it to certain constituencies means taking it away from schools, hospitals, farmers, public transport etc. in other parts of the country. Have we learnt nothing over the years ?

    • paul m says:

      I don’t believe it!

      He went and said it: “This is the last of the very difficult budgets”

      Someone throw a shoe at him. Preferably a welly

    • barbera O'Shcokenzy says:

      I don’t know why the headline people didn’t come up with “B-Day” for Budget Day– perhaps because phonetically it sounds like a French bathroom apparatus.

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