Five things you won’t see in this year’s budget
As Budget 2014 approaches, here’s a few things you’re unlikely to hear this afternoon
A cut in the number of Dáil deputies:
Ireland currently has 166 TDs representing 43 constituencies throughout the State. Although the Government said it would reduce the number of TDs back in 2011, it proposed cutting deputies by only eight overall. That cut is expected to come in from the next Dáil but, according to the constitution, there needs to be at least one representative per 30,000 population, preventing any drastic cuts. Of course, the Government could put it to a referendum, like they did with the Seanad. But for the time being, we’re stuck with at least 158 deputes in the Dáil.
A pay cut for TDs and ministers:
The Taoiseach currently earns €200,000 after taking a pay cut upon entering office in 2011. The average TD, meanwhile, earns around €92,000, while Cabinet members and Ministers of State get additional payments on top of that. That’s less than in the US, where the president earns $400,000, while the average congressman earns $172,000. But it’s significantly more than most European countries, including Britain.
You’d think TDs could stand to take a pay cut, but it’s unlikely that Enda and Co will be forced to downgrade their salaries this year, despite the drive to cut costs that was given as a chief reason behind abolishing the Seanad.
Reduce the tax burden:
First there was the income levy, which was only ever expected to be a temporary measure. Then came the universal social charge in January 2011, which by 2013 took between 2 per cent and 7 per cent of the applicable income. Now we have property taxes, soon to be joined by water charges and increased DIRT rates are looming. What we won’t see if an easing of the tax burden on ordinary citizens.
A third tax band for high earners
Although a higher rate of tax has been lobbied long and hard for, it’s unlikely that we’ll see it imposed any time soon. Previous efforts to get a third rate of tax for high earners – those on more than €100,000 a year, for example – have come to nothing. It would be a little like turkeys voting for Christmas.
An increase corporation tax:
Ireland is home to many multinationals and, although our low corporation tax helps attract some of them to these shores, apparently it’s not the reason they stay here. Instead, we’re often told, tax is a secondary reason to locate in Ireland, with the primary one being the quality of talented people. That may be true for the existing companies, but would we be quite so quick to attract new companies to these shores if we increased our corporation tax a little? Either way, it’s unlikely that ministers will want to rock the proverbial boat by adding to the tax burden of US multinationals operating in Ireland. And given the Government’s staunch defence of the corporate tax rate despite heavy pressure from other EU leaders, the chance of raising the rate by even a couple of percentage points seem extremely unlikely.