The Budget Axe Falls… on me

So I deliberately didn’t write about the budget yesterday. I was too annoyed and I would write the wrong thing. But today, I am a little calmer. This post is about how the budget affects me, expect broader posts as the week go on. Basically this is a rant!

Overall I am not happy with the budget. That is fairly obvious. While I myself am not massively hit straight away, my pay package from the 1st of January will be hit with the Universal Social Charge.

This budget also limits my choices in furthering my education. The €200 charge on Post Leaving Cert Courses means that it will cost in the region of €500 to do the course I was planning to do next year, which means I have to now reconsider my options. Is this what we want for our knowledge economy? One where people have to figure out whether they can attend college. The higher education student contribution of €2,000 rules out university for me.

Thankfully none of the other cuts will affect me in any major way. But I am annoyed with the cuts in pensions for those under 65, and the cuts in careers allowance and tax credits. How does that make it a progressive budget?

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No Consenus

German Logo of the ECB.
Image via Wikipedia

Euractive have a very interesting article on the talks between EU Economic Commissioner Olli Rehn and the Irish Government and Opposition.

“He asked us our view and I told him […] we had no confidence in this government, and the thing that would give more stability to the country is an election and a government in place that had a significant working majority,” said Michael Noonan, finance spokesman for the centre-right Fine Gael party

This of course means the markets are jittery about Ireland. Will Fine Gael stick to the 4 year plan to reduce the deficit if they win the election? Will Labour? This worry and the Portuguese Debt Auction  has sent “the risk premium on Irish and Portuguese bonds to record highs and prompting market talk of European Central Bank (ECB) intervention.”

This is worry news indeed.

The Irish yield spread over benchmark German bunds reached a record peak near 574 basis points in late trading. The 10-year Portuguese/Bund spread also hit a euro lifetime high of 466 basis points and traders said the ECB had been buying bonds.

Credit ratings agency Fitch Solutions said the cost of insuring Irish and Portuguese sovereign debt against default had widened by 24 and 22% respectively compared to the sovereign debt market average in the last week.

Commissioner Rehn is still thinking positive though, he told RTÉ

“I believe that the markets have not yet internalised this plan and these decisions because they are still at the planning stage,” he said. “Once they have been decided by the government and passed by the parliament they will have a real effect, and then the market forces [will] believe that Ireland is able to cope.”

I personally hope that he is right. Next months Budget is going to be make or break, not just for the Government, but for the country as a whole. There is no doubt that cuts and taxes are coming, and a few holy grails will have to be given up, but can we accept that as a country? Will we protest on the street like the Greeks? Or will we grin and bear it?

The next four years are going to be tough. Can we make it? I hope so, but we need political will and not political point scoring.

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Budget 2010: The Good and the Bad

Value added tax
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If you are looking for indepth stuff on the budget, you wont find it here! Vists Suzy and Irish Election if you are looking for that sort of stuff! This is my reaction to the budget, which I mostly missed due to college. Hence why I wasnt tweeting.

General Reaction: My first reaction is that this budget won’t make a whole load of difference to me. Things may get cheaper with VAT and Excise cuts, but the carbon tax may cut the savings on it. Yes this is a selfish reaction, but this is how we all react to the budget. How will it effect me!

The Good: So what was good in the budget? The public sector pay cuts were needed. It is a pity there wasn’t an agreement on it, but it needed to happen. The 10% cut in the Taosieachs pay (he took the other 10% already) was a move in the right direction, and so is the cut in ministers pay. The reduction of VAT back to 21% was a good move, but maybe he should have taken a full per centage off it? I agree with the cut in social welfare if you refuse a job.

The Bad: The budget is a bit of fob in my opinion. Its tokenistic to being green. The forestry scheme (which was explained to me by Peter) is a complete and utter fob! The scrappage scheme is like what the hell? Who wanted that? The cut in social welfare is hard to defend and as Suzy points out wont be as protested against as the Pension cuts last time.

“Unlike older people, people with disabilities and their carers, children and the unemployed are not as mobile to protest or vote for that matter.”

The Carbon Tax then is another way of putting more excise on petrol and diesel and will actually increase the cost of everything as everything has to be transported. The 50c on the Medical Card Prescription Items is going to take a while to get used to. I am still still trying to fathom the drop in the excise on drink? Why did that happen? Also why no increase in tobacco excise? I had smokers giving out last night over that has they were hoping for an increase as an incentive to give up smoking!

So thats my opinion. There is no doubt that this budget is a half-arsed fob. Where are the concrete actions, where is the stimulus for Irish Business? Not the banks.

The Government has its priorities wrong and Richard Bruton was right to mention TK Whittaker and Sean Lemass in his remarks considering they had a vision for Ireland and pulled us up by our laces. This budget doesn’t even tie them!

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The Bludget doesnt effect me that much

As I apporached today I was fearful that they would do something that would directly effect me (Im selfish I know). But as someone on minimum wage I thought they might do something to the tax limits, but they didn’t.

What did you make of the Bludget?

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Bludget: Are we flucked?

So the bludget is tomorrow and as my boss said, the country is flucked!

The Government cannot put the blame for this tough budget on outside forces. They have been in Government now for nearly 12 years and must share some of the blame.

I was at a fundraising lunch on Friday for Colm Burke and the Guest speakers were Pat Cox and Brian Lucy. Coming out of that lunch I was depressed. Its not looking good for us.

So what should the Government do? Here are my ideas:

  1. Cut Junior Minister (I know they are cutting 5, so 3 more wont hurt)
  2. Means test or tax childrens allowance (Consider it part of income)
  3. Increase top rate of tax
  4. Reduce civil service
  5. Reduce TD/Senators/Ministers Pay and Expenses (10% seams like an idea)
  6. Scrap E-Voting Machines
  7. Increase the upper “Lenihan Levy” rate

Well they are my ideas. Not sure if I would go as far as what Brian Lucy wants which is to Nationalise the banks. Do you have any ideas for the Brian Lenihan?

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"You must be BATTY to think we wont fight the cuts"

The above was on a hand made sign at the education protest in Cork City last Saturday. It was one of the largest protests I have seen in Cork especially in comparison to the student protest on fees earlier this year and the protest I was on back in 2004 on fees.

From my work I could see the protest passing which seamed very colourful and enjoyed the support of shoppers. It took the protest a good 45 minutes to pass the Savoy Centre (where I work) which gives you an indication of how large the turnout was. Their were teachers from Kerry, Cork, Limerick, and Waterford from the signs I saw but they could also have been teachers from Tipperary and Clare and I am open to correction on that!

Fair play to the INTO, TUI and ASTI for organising the protest which is resonating well with the public and has people on their side. The Government and the Education Minister especially are making a mess of this issue and the Education budget needs to be re-thought completely.

VAT increase – The Costs

There is a post on Iain Dale’s Blog about 15 reasons why a VAT cut won’t help so how many of them also apply to the VAT increase that will occur hear on the 1st of December.

1. Deflationary for the next 12 months

Inflation Gaurenteed to be at leats 1.1%

2. Reduces business liquidity possibly by over £1bn

Yup, the same affect not sure about the value

3. Little or no help to SME’s in the B2B sector

No change there

4. Helps lower income individuals/families proportionately less than higher ones

Hits lower income groups more.

5. Gives businesses / retailers abilities to mark up price changes eg 70p chocolate bar is now 68.52p

Forces retailers to absorb the cost increasing, lowering there margins and reducing scope for growth

6. Reduces the price of cigarettes probably first time in 20+ years

Cigs go up again (no harm IMO)

7. Reduces alcohol prices – possibly encouragement to binge drinking

More increases…

8. Involves re-priceing by virtually all retailers at their busiest time of the year (supermarkets & garages can cope easily – others less so eg restaurants)

More costs, less expansion

9. Reduces restaurant/ hairdressers etc tip income Lower paid impact again

Reduces liklihood of tips due to higher costs

10. Requires HMC&E to recalculate Flat rate VAT scheme rates & notify SME’s – initial confusion

Yup, exepet it will be Revenue doing all this…

11. Reversal to recover lost income requires possibly an increase of 33.3% in VAT rate

okay so this one wont effect

12. Reversal of rate increase will slow recovery

It could slow any possible recopvery due to increased costs

13. Optional increase in Income Tax personal allowance could have given 75% benefit immediately ie December/ January wheras VAT benefit spread over 12 months

dosent effect

14. Doesn’t reduce food prices – idea why not negative VAT rate!

Increase food prices

15. Doesn’t significantly help housing market – critical

Definately dosent help housing market.

So two of the fifteen wont happen with the planned increase, but the increase will hurt in the long term.

Government Mistakes. You Pay

Fine Gael has launched its winter campaign against the Government and shows no sign of resting on its poll poistion. The campaign aims to highlight the governments mistakes and Fine Gael’s alternative to the budget. The campiagn consists of a website with online videos, regional meetings and asking people for there say.

Speaking on the launch of the campaign Fine Gael Leader, Enda Kenny said

We want to hear what the public have to say about the future direction for our country. We have set out an alternative to the current Government’s approach based on tough but fair policies that protect the vulnerable in our society but tackle wasteful and excessive spending. This campaign exposes the Government’s failings in the recent Budget and promotes our better alternative. It also allows for both virtual and actual interaction between our Party and the public. We look forward to meeting thousands of people around the country over the coming weeks as we organise our public meetings, but we also look forward to getting reaction to our campaign online at our campaign website www.FairerBudget.com.

Commenting on the campaign, Deputy Leader and Finance Spokesman Richard Bruton said:

The recent Budget from this Government risks turning a recession in to a depression. It was ill-conceived and made fundamental errors in the way it was framed. Current spending continues to increase at an unsustainable rate while capital spending has been cut. Pay costs continue to rise for existing staff numbers yet front line services are cut for the most vulnerable. The Fine Gael approach would give our small businesses a chance to trade their way out of trouble and would also have better protected the more vulnerable members of our society. This campaign will, I believe, help promote that message to a wide and diverse audience.

Strangely enough there is no meeting for Cork City. Must get on to public reps about that! Do have a look about the website.

Cervical Cancer Vaccination Programme

I have been following Redmum very closely on this issue has she has some excellent links and footage of Harneys statement in the Dail. She has some excellent posts which include links and ideas to try and change the Governments mind on this issue.

*HPV vaccination programme ‘put on hold’

*Email Harney photographs of your daughters

*Some more action on Cervical Cancer

She has also linked to a petition so please sign it!

Also Grandad has an excellent post on this issue and Mary Harney and the HSE in general which is also worth a read.

It is a shame that the Government have withdrawn this service and it should be reinstated.

Budget – Still not happy…

So we have had two major(ish) u-turns on the latest budget. One on medical cards, but still 5% of pensioners will lose their medical card and one on the 1% “Lenihan Levy” which means that if you earn €17,540 you don’t pay tax but if you earn €17,541 you do as P. O’Neil points out over in Irish Election. I’m still not happy with that as I work in retail so therefore have to work Sundays and public holidays meaning I get overtime and have to pay the tax. I worked it out. On my average wage the Government will get what it will cost me to go to College next year! I agree with the unions that the limit should be set at €22,000.

But now attention is moving on to the cuts in Education and to a lesser extent Social Welfare. Will the Government u-turn on these I doubt. Schools look like they won’t re-open in January due to health and safety concerns. 16 yr olds lose their disability benefit (to save 0.07% of the departmental budget!!!!!!). Lenihan has targetted the old, the sick and the young!

This PR Budget, has blown up in their faces! They would be better off re-writing or better yet Lenihan and Harney resigning.

You could add Mary Coughlan to that list as she has shown how useless she is in her current post as Tánasite. What an embarrassment to Brian Cowen this government must be, which is ultimately a reflection on him as he appointed them. The Greens don’t come out much better with Mary White trying to claim that the Greens were going to pull out over the Medical Card, they weren’t! The gainers from this have been Labour, Fine Gael, Sinn Fein and Independents, especially Finian McGrath and newly indpendent Joe Behan. I think next years local’s are a near dead cert loss for Fianna Fail over the Budget.

I do apologise for the incoherency of this post, but my mind is frazzled from last night