Budget 2017 town: what Dún Laoghaire thinks of the budget
VAT for hospitality welcomed; house price worries; pension hike dismissed as politics
Fla Larkin: Self-employed are unfairly discriminated against, he says, with higher USC and stingier tax credits. Photograph: Eric Luke
Martha O’Hagan-Luff with her son Oisín: “My heart goes out to families living in temporary accommodation.” Photograph: Cyril Byrne
Ray Doyle: “There’s a misconception out there that everybody is doing well again.” Photograph: Cyril Byrne
Vincent English: “I haven’t seen the recovery other than in house prices beginning to climb again.” Photograph: Eric Luke
Julia Geoghegan: “We don’t want university education in Dublin to become the province of the Dublin affluent.” Photograph: Eric Luke
Dún Laoghaire vital statistics
Population: 26,516 (as of April 2016)
Households: 11,536 dwellings (10,562 households, 47 vacant holiday homes, 927 other vacant dwellings)
Number of children: 2,468 people under 18
Number of people with third-level education: 3,854
Average house price: €626,747
Number of households with broadband: 6,526
The business owner: Fla Larkin
Fla Larkin, who runs the Haddington Hotel at the foot of Dún Laoghaire’s East Pier, welcomed the retention of the 9 per cent VAT rate for the hospitality sector, describing it as “critical” for his business.
There is a misconception that the benefit is flowing to multinationals and vulture funds but most hoteliers “are independent like me who badly need it”.
Minister for Finance Michael Noonan announced the retention of the preferential rate as part of a series of measures designed to Brexit-proof the economy.
The taxman’s treatment of the self-employed is something that crops up repeatedly when talking to Larkin.
He welcomes the Government’s move to begin correcting the disparity by raising the annual tax credit for self-employed people to €950, bringing it closer to the €1,650 PAYE workers enjoy.
However, the single biggest disappointment for Larkin was the Government’s failure to address the discrimination around PRSI entitlements, with self-employed people still not entitled to jobseekers’ allowance or sick pay.
“Even though we’re a huge contributor to PRSI we don’t benefit in the same way as PAYE workers do.”
Revenue justifies this on the grounds that the self-employed can claim expenses but Larkin takes issue with this.
“Allowable expenditure has to be incurred to further one’s trade. This is a narrow test and Revenue has a low tolerance for incorrect expense claims.”
A few years back, Larkin took something of a leap into the dark, giving up a secure technology job in London to return home and invest in the restaurant sector. His return to Ireland coincided with the biggest economic reversal in the State’s history – not the best start for life as an entrepreneur.
Larkin now employs 57 staff and is continuing to invest, and says he is supportive of the 10 cent hike in the minimum wage.
A move to differentiate wages between full-time staff and part-time temporary student staff would be one solution that would enable a higher living wage for the former, he says.
The lecturer: Martha O’Hagan-Luff
Martha O’Hagan-Luff of Trinity Business School welcomes Michael Noonan’s desire to move away from the boom-and-bust cycles of the past but wonders if income tax cuts and tax breaks for first-time buyers at a time of strong economic growth are consistent with that aim.
“For me, the Government should be trying to dampen down the business cycle and cutting income taxes when things are going good is tantamount to stoking the fire.”
Even though she stands to benefit, O’Hagan-Luff remains wary of moves to dismantle the universal social charge (USC), suggesting people had got used to paying it and there was a danger in removing such a large part of the tax base.
That said, she commends the Government for limiting the cuts to lower- and middle-income earners.
As a mother of three young children, O’Hagan-Luff juggles a busy home life with a busy work life, and is shocked by stories of families living in cars or hotels.
“My heart goes out to families living in temporary accommodation, trying to get children to school, lunches made, trying to make the situation as normal as they can under the circumstances.”
She welcomes the €1.2 billion in funding earmarked for social housing, which is intended to deliver 47,000 new housing units by 2021.
O’Hagan-Luff thinks the Central Bank has done well to hold the line on mortgage lending and worries the new tax-break for first-time buyers will only fan further demand without making housing more affordable.
O’Hagan-Luff believes the rental sector also needs reform.
“Who would want to rent, if you have kids, and you can be kicked out with three months’ notice?”
She also believes the capital spending promises announced in the budget won’t be enough to deal with the various infrastructoral bottlenecks in housing, transport and water.
The self-employed: Ray Doyle
Ray Doyle, who runs a cleaning firm, describes the €5 pension hike as pure electioneering. “Are they the people that really need it? No, but they are the people that will vote.”
A major bugbear for Doyle is the lack of welfare entitlements for the self-employed. During the crash, his business, which specialises in cleaning new builds on construction sites, all but dried up.
When he enquired about his welfare entitlements he was told to come back when the business went bust.
“I felt it was wrong having worked all my life, creating employment and paying VAT, that I had less entitlement than someone who had worked for just a year.”
Doyle is also disappointed by the Government’s failure to address the issue of social protection for the self-employed, saying he would prefer to pay more than the current 4 per cent rate of PRSI in return for better welfare benefits.
As a father of both young and grown-up children, he welcomes the new childcare support package.
Doyle believes childcare costs have become too prohibitive, though he is unsure about whether the Government should aid parents directly or fund creches or after-school services.
Ireland has become a difficult place for young people, he says, with rents and property prices now out of reach for many.
He references Taoiseach Enda Kenny’s aim to make Ireland the best country in the world to do business, but wonders why the aspiration isn’t on making Ireland the best place to live.
Doyle also believes the cuts to USC are largely tokenistic, noting the changes “won’t really make a difference to anybody” and believes the money would have been better spent elsewhere.
As an employer who pays his staff a minimum of €10 an hour, he describes the 10 cent hike to the minimum wage as minimal but warns a more heavy-handed approach by the Government could railroad many small firms out of business.
The contract window cleaner: Vincent English
Vincent English believes the Government missed an opportunity to tackle youth unemployment, one of the lasting legacies of the financial crisis.
He says the trade professions were decimated during the property crash, with many forced to emigrate, while most of the current crop is close to retirement.
To combat the problem, he suggests the Government should have introduced tax breaks for firms to take on apprentices, rather than shuffling them from one scheme to another.
English believes a new bunch of apprenticeship programmes could have been integrated into the Government’s planned investment in social housing.
Like many self-employed people, the crash and the lack of State support left its mark. “When the crash came, I lost 75 per cent of my business and I was not entitled to anything from welfare,” English says.
He welcomes moves to improve tax credits for self-employed but remains aggrieved at the lack of welfare entitlements, especially the absence of sick pay.
Another issue for English, who has two daughters, is inheritance tax.
While acknowledging moves to raise the current threshold to €310,000, English believes the tax is still too high, “particularly when you consider we’re paying property tax now when we didn’t pay before”.
He also believes the €5 bump to pensions will be swallowed up by the likely hike in bin charges next year.
Overall, English believes the budget “didn’t do anything to hurt anybody” but ultimately failed to tackle some of the bigger issues facing post-crash Ireland.
He would have liked to see the Government cough up more money for public transport, an issue which lies at the heart of the current bus dispute.
“We need to have a decent service and not one that finishes at midnight,” he says, noting his daughters are often stranded in the city centre and forced to pay expensive taxi fares home at night.
The student: Julia Geoghegan
Julia Geoghegan, who is studying maths and philosophy at Trinity College Dublin, says the high rents in Dublin are pricing many students out of the market, making university education less affordable.
“I’m lucky because I can live at home, but for thousands of others this has become a real problem . . . and we don’t want university education in Dublin to become the province of the Dublin affluent.”
She welcomes the provision for more affordable rental accommodation for third-level students but takes issue with the new tax break for first-time buyers.
“I’m not sure that incentivising new house purchases is a good idea. The Central Bank introduced a deposit requirement. Sure, this was painful but, in the long term, it would have ensured a more stable, affordable market,” she says.
“The Central Bank must be raising their eyes to heaven at the politicians driving a dagger through its prudence. Secondly, who benefits from these incentives – builders? Let’s have a bit of intergenerational equality here – incentivise housebuilding, not price increases.”
Her other main concern is funding for the third-level sector.
“We need to see education as an important service, bringing much-needed money into the country. I know that this sounds like special pleading, but I see it as investing in Ireland’s reputation,” she says, noting there is to be an increase for third-level education of €36.5 million.
“ With so many areas deserving of spending, this is disappointing but probably realistic. But, we need to think long term in education,” she says.
She says Irish universities are continuing to fall down the international rankings because of underfunding and this needs to be addressed by the Government.
“Worsening student-to-staff ratios sends out a bad message internationally,” she says, particularly when the demand for English-language university courses is rising across Asia.
She is against making third-level education free, believing it would primarily benefit the middle-class without addressing disadvantage and social exclusion.