The budget thread…

I’m undergoing a little domain confusion at the moment, while I make some decisions about my own future direction.  Which is the reason all of my older posts have disappeared from here.  Apologies if that sounds awfully cryptic, but an explanation (and possible restoration of older posts) will be forthcoming within the next six weeks or so, and I’d just ask ye to bear with me until then.

Yesterday, if you were living in a bubble somewhere, saw the publication of Budget ’09.  Suffice to say, I was glued to my monitor from 3.45pm yesterday, as the Irish Times, RTÉ and Suzy all provided me with live updates of what Brian ‘Jazz Hands’ Lenihan was delivering.  I’ve since taken a little time to read the budget documents, and various opinions doing the rounds, and below are some of my criticisms and alternate suggestions for what Budget ’09 should have contained.

Criticisms:

• 1% levy on all income under €100K (and 2% above that).  What were you thinking?  You though that progressive taxation was in fact a lousy idea, and that we were much better off fucking that out the window and penalising the lower and middle classes?  Were you high when you thought this up, or just didn’t give a damn?  This is expected to yield €1.18Bn in a full year, but is not a measure I would have resorted to.
• Health expenses reduced to standard rate of relief rather than marginal rate?  So, middle class families will now only get 20% of medical expenses reimbursed basically.  Now is about the time we should start feeling sorry for anyone who is unfortunate enough to have bred in the last 20 years.
• Cycle to work scheme.  Christ – this one really made me laugh.  We’re going to spend €0.4Mn in a full year on treating bikes as a benefit in kind.  Nice to see the Greens made an impact on the budget.  Oh, and if anyone knows of an employer who will bother taking up this scheme and providing their employees with bikes, please let me know – I’d love an employer like that.
• PRSI ceiling barely increased.  So, the PRSI ceiling was increased from €50,700 to €52,000.  This is such a laughably small increase, the department didn’t ebven both providing an estimate for how much this might provide to the exchequer.
• VAT increase.  Right, we’re back to screwing the lower classes by avoiding the progressive taxation model again, are we?  Excellent.  Oh, and while we’re at it, congratulations on boosting inflation – every retailer in the country is guaranteed to pass on a little extra increase of their own while implementing this one….
• No increases on beer, cider or spirits.  No prizes for guessing which lobby group influenced this decision.
• Stamp duty reduction on commercial property.  See above.
• Capital allowances for energy-efficient equipment.  Hang on a sec – the Greens managed to get something else out of negotiations?  Actually, scrap that – at an estimated full year cost of €5Mn, it’s not worth mentioning really.
• Charge on additional residences.  In principle, an idea I like.  However, at €200 per annum, the amounts are laughably low.  In fact, the charge amounts to less than someone earning €21,000 a year will pay in the new 1% levy.
• Abolition of child benefit payments for children over 18.  Nice.  See previous posts about screwing people from lower and middles classes (ie – those who actually depend on these payments).
• Increased medical costs.  Right, so not only (as per above), can you claim less tax relief on medical expenses, but you’ll also have to pay more to get medical treatment?  A&E charges risen substantially to €100 per visit, in-patient charges also increased by 20%, and the threshold for entry to the Drug Payment Scheme rises to €100 per month.
• Rise in college registration fees.  With registration fees rising to €1,500 per annum, we’ve effecively seen 50% college fees sneak in through the back-door, and this is clearly an attempt to blow the idea of universal free access to third-level education out the window.  Again, way to hammer the middle classes in particular.
• Continued road building.  Excellent.  Another key area where the Greens have delivered a massive impact clearly.  While the charges for parking spots are welcome in my opinion, the primary focus of the Dept. of Transport remains road-building rather than public transport.  At least there’ll be nice roads for those who can afford to pay €200 for a parking space to drive on, cause there’s not much hope of additional busses or anything being provided as an alternative.
• Decentralisation continues.  I wonder how many years exactly it will take for the Government to realise what a failed programme this is.  As revealed in yesterday’s budget, to date, only 2,500 positions have been moved outside Dublin.  They’re still planning on increasing that to 6,000 (ie – over doubling the paltry amount they’ve acheived to date), but at least we can be grateful that they’ve quietly canned the resot of this daft scheme.
• Equality Authority and Human Rights Commission budgets slashed.  As Suzy rightly points out, the merging of back-office functions is no bad thing.  However, slashing budgets by this much is going to have policy and advocacy implications.
• Combining the National Gallery, IMMA and the Crawford Gallery.  This move worries me greatly – I have a huge amount of respect for all three institutions, and I always shudder when I see the Government move in any way to cut arts funding – an area that is permanently criminally underfunded.
• Integration of Combat Poverty into the Office of Social Inclusion (which has had it’s own budget slashed!).  This I find really worrying, and strikes me as a move to silence the one public body that could have vociferously criticised the Government for their regressive steps on taxation yesterday.

So, they’re 17 criticisms I have with the budget.  I have others too of course, but I never expect to be totally satisfied with a budget, and those were the ones that sprang out and irritated the hell out of me.  Lest I should be accused of being overly partisan, allow me to list some of the areas in which I actually think the Government got it right yesterday:

Congratulations:

• Levy on car parking facilities.  I actually think this is a good idea.  My only problem is that it doesn’t affect civil servants, which is a little unfair.  It would have set a good example if those responsible for developing our transport infrastructure, had started using that infrastructure.
• Increased petrol prices.  OK, so oil markets have been pretty volatile in recent times, and people are feeling the pinch.  There is still a need to change the habits of those driving to work etc. on a daily basis, and levies/taxes are the bext way of changing such habits (along with education of course, but I’ve long since given up on this Government’s ability to implement policy through educational reform).
• Tobacco excise.  I smoke.  The state incurrs a cost as a result.  I don’t mind paying.
• Wine increase.  I only think it’s farcical that there wasn’t an across-the-board booze increase.
• Air Travel tax.  Nothing wrong with a travel tax, and again, people need to start thinking about how much they’re flying.  I don’t see a major problem with this.  It should have been applied to smaller planes, and to shorter distances though.  I don’t see why someone flying from Dublin to Glasgow, Cork or Liverpool should be exempt.  And private planes definitely shouldn’t be exempt.
• Financial cards.  The levies on use of ATM/debit cards were always unfair and silly.  Glad to see these reduced.
• Cheque charge increase.  There’s no need for cheques anymore except for businesses really.  And with their low rates of tax, they can afford an extra 20c on a cheque.
• Capital Gains Tax increase – *applause* – something I wholeheartedly approve of.  Still think 22% is too low though – should have been brave and made it 25%, which would still be low by international standards.
• Motor tax increases.  Again, if designed as a behaviour-changing form of taxation, it’s not a bad idea.  Might be a little unfair not having a rate lower than 4% for small/super-efficient cars though.
• Increases in pension payments and other welfare payments.  They may be small, but I’ll take some consolation that they’re giving back a little of what they’re taken with that ridiculous levy and the means-testing of pensioners for medical cards.
• Abolition of a number of hopeless agencies.  WHile I’m critical of the Government’s steps in some areas, in others I think a ratuionalisation was urgently needed.  Especially if people are being asked to pay higher taxes – they have a right to know their money isn’t being wasted on a number of unnecessary agencies.  Examples I’m happy to see gone include: National Adult Learning Council, Rent Tribunal, National Crime Council and 4 military facilities.  Note, this doesn’t necessarily mean I don’t find those policy areas important, just that I thought the agencies were totally useless.

I wanted to post about some measures I would have proposed also, but I’m tired after writing all of the above, so I’ll try to return to this topic tomorrow!