NOW IN OUR fifth year of austerity budgets, government is tomorrow set to announce €2.25 billion worth of cuts and €1.25 billion of revenue raising measures in order to reach the magic adjustment number of €3.5 billion.
But where is the axe going to fall and what are you most afraid of?
We asked. You responded.
In the first of two readers’ panels (part two on budget morning), we get the views of:
Jane*, 30, rents a house in Dublin with her husband, having moved from Galway where she owns a house that is in negative equity. She has been unemployed for a year, after being made redundant from her job as a specialised engineer. She is worried about any changes to their tax credits and what the future holds if she is unable to get a job in 2013.
As an engineer with experience, I wasn’t expecting to be out of work for more than a few months, especially when I was willing to take lower-paid jobs. I have found that FÁS and local employment services (LES) have no clue how to help specialised professionals. I am now on means-tested Jobseekers Allowance but get very little due to my husband working and the fact that we have savings. I have no problem with this system, however, we would like to start a family soon and living off our savings long-term is not viable.
The obvious worry for us would be for any change to our tax credits and to the means-tested system if I do not get work in 2013. Also, how will we be affected if we have a child?
Another issue we face is that I bought a property in Galway before we married, which is now in negative equity. Unfortunately we had to move to Dublin for work and there are currently no prospects to move back there. As we rent a ‘second home’, we pay the Non Principal Private Residence (NPPR) and Household tax. I believe that it is highly unfair paying the NPPR tax when we have no choice but to live somewhere else. At the moment, rent is helping to pay the bills but we do not make any profit from it. I would, however, be cautious about any debt forgiveness program initiated by the government. Another major worry would be a changes to tax reliefs on interest payments and the household tax etc.
I am sick to death of hearing about jobs in software and gaming. The area I specialised in was part of the ‘Smart Economy’ initiative and unfortunately there are few jobs in that area. What I need is support to use my skills in a different career and besides the software industry, it is difficult to find networking opportunities for skilled professionals in a similar position.
*person wished to remain anonymous
Fintan Hynes is 37 and lives in Galway. He is married and has a daughter, aged three. He works in the private sector as a software engineer. His wife also works full-time. He believes that changing the tax rates will act as a disincentive for people to work harder and for longer.
While not rich, our household income would be above average. However, we need to run two cars and pay for childcare and a mortgage so we would not have a huge amount of money left over. In general I’m not overly stressed when I think of the budget ahead. While not overly impressed with the performance of the government so far, I still think that they are smart enough to realise that they cannot tax their way out of a recession in the same way that the state did in the 80s.
With regards to the upcoming budget, I don’t think the tax rates for any of the bands should be touched. I am on the high rate and am paying a rate of 55 per cent (including tax, PRSI, USC) on any extra Euro I earn. It’s a bit of a disincentive to doing overtime or working for a bonus when so much of it is taken away.
I also don’t think that someone on our income should be in receipt of the children’s allowance. It’s a nice bonus for us but not something we rely on so I think there are other people more deserving. It probably makes most sense to tax it as income.
I think it’s small beer to be going after home help hours and disability services. Nothing seems to be done to tackle chronic waste in the health system. Everyone who has been through the hospital system has stories of how wastefully the resources are used. I took up a bed for a full day waiting for a piece of paper to come from one department to another. They don’t seem to be utilising IT systems at all.
Any job generation plans should be very targeted. For example, an additional tax credit to get gaming companies into Ireland might be an idea (in much the same way Montreal has done). I’m against many (but not all) “social engineering” type tax measures. I do not want to see fat tax, sugar tax, additional carbon tax or minimum alcohol pricing.
I would also worry about the government making health insurance less affordable. If they keep up policies that increase the costs of private insurance it will mean less money overall coming into the system as people ditch insurance altogether.
Local government is probably another area where a lot of money can be saved. They also seem to be very inefficient organisations. I do agree with a property tax and don’t understand the mass resistance to it. Same applies for water charges. I’ve worked and lived in Europe and these taxes are standard in most other countries. Some clarity on the costs and system are definitely needed though.
As regards the alternative budgets from other parties, the only one I’ve really heard so far was from Sinn Féin. It sounded like the usual class war “tax the rich” fare that they serve up. I didn’t see it as a valid alternative as some of their maths didn’t add up and they seem to be confused in the difference between wealth and income.
Gavin Morgan, 30, is a small business owner in Glasnevin, Dublin 11. He is married with one child. His main concern is that the carbon tax on diesel and motor tax will affect the daily running costs of his business.
Our company constructs and maintains natural and artificial sports surfaces mainly in the South of Ireland but also in Northern Ireland. With the upcoming budget, the planned motoring cost increases will certainly affect us. As we travel all over Ireland our motoring costs can be quite high and we’re looking to reduce them at the moment rather than increase them.
With the proposed increases on carbon tax on fuels and motor tax this will affect an awful lot of businesses in Ireland. I certainly hope they don’t increase the VAT rate as we deal with sports clubs and other organisations who don’t have the luxury of being able to claim back VAT. I think most people understand the current situation we find ourselves in so I know there will be some pain to take and if it helps getting Ireland back on its knees then so be it.
At the end of the day cuts and increases have to happen in order for us to succeed as a nation, so I look at budgets and don’t necessarily worry about them too much because I can’t change the way a government runs the country. Instead I try to focus on what I can change and work hard on that. I think the government are doing a pretty good job at the moment but it will be interesting to see how much pain people will have to endure and what sectors will be worst affected.
I would like to see the government coming up with new ideas to create jobs and reduce the number of people on the live register. Speaking from experience, the current JobBridge system is a bit of a disaster so there needs to be a bigger incentive for people to come off the social welfare. As I am currently studying an online BSc in Environmental Science, I’d like to see a helping hand given to students/parents in relation to fees and encourage young people to educate themselves in Ireland.
David Connolly is 30 and lives in Dublin. He bought a house this year, where he lives with his partner and three children under 10. Traveling 100km for work each day, he is worried about a rise in the costs of running a car and a reduction in the enterprise supplements his partner receives.
I’m a private sector worker working in the retail sector. My partner is self employed but her business struggles to provide any meaningful income so I would therefore be the main breadwinner.
I recently purchased a house in north county Dublin and have realised just how bad off you can get once you purchase a house. I travel to Kildare every day to work, spending over a €100 in petrol every week.
I have to say I’m one of the lucky people so far in that the recession has never really affected me and I would have benefited in that I was able to buy a house at more than half the price it was in the boom years.
This budget has me worried in many different areas in that I have very little surplus once all the bills, mortgage and fuel is paid for. Petrol is a major worry as I travel 100km every day for work. Electricity and gas bills are also very high. Any increase in car tax or carbon taxes would further erode my income (I’m not like a TD who gets expense to go to work).
My partner earns a supplement from the self enterprise scheme and receives child benefit. Without that I would also have to further supplement living costs from an already tight budget. My private health insurance has also risen by over 30 per cent in the last two years and any further increases would mean I would have to seriously look at giving it up.
Pat Kelly, 69, is a pensioner from Cork. He is single and is looked after by his niece who lives with him. Frightened about what next year will bring, he is worried about cuts to home help along with property and water charges.
In 1984 I had major back surgery and as a consequence I had to give up work the following year, having discovered a form of Spina Bifida after surgery. I immediately started caring for my mother and father, both of whom were wheelchair-bound and have since passed away.
I’m a single man. I’ve found it very hard over the years, but through organisations like Older and Bolder and the Carers Association, they’ve helped me. I live now with my niece [and her two children] as she cares for me. She does my cooking and cleaning.
I’m of the generation where we worked our tails off in the 50s and 60s for small money, working 12hrs a day, six days a week, in the hope that when we would retire the services would be there for us. But as we’ve seen with the home help cuts and the home care packages that are on hold for the moment, that isn’t the case. It’s very, very frightening for me personally. I genuinely fear for my future.
Austerity is nothing new to me, but austerity to me meant that you couldn’t afford to socialise when all your bills were paid. I’ve the gas on most of the day, the heating. I’m genuinely afraid of the household charge and the water charge that’s coming down the line.
It’s an irrational fear, but I have a fear of going to jail [over non-payment of the household charge]. I can’t afford it. There going back three weeks, I was out with friends, we were at a meeting and they wanted to go for a drink. Now, most of them don’t drink and neither do I, but I couldn’t go with them because I had paid all my bills for the week, they were big bills. I had €18 left for the week.
I have the state pension and I have a 15 per cent disablement payment. In addition to the back surgery, I developed a thing called COPD (Chronic obstructive pulmonary disease) as a result of working in a factory that was very dusty. I have a fear of getting ill, and I fear my government. I shouldn’t fear my government, my government should fear me.
Surely it would be more cost effective to restore the home helps, because if a person isn’t getting help at home, they’ll end up in a nursing home which is going to cost a fortune. I can’t see the logic. It seems like one government department isn’t aware of what the other government department is thinking. There seems to be no joined-up thinking.
The money now seems to be going to pay for bankers and for pensions for politicians with no thought whatsoever for the people who build this economy. We worked our butts off. There’s no acknowledgement. No appreciation.
All my bills are paid, thank God. We’re not in debt to anyone, but we’re living from week to week. I’m paying over €1,200 a year for Aviva, for health insurance, but I can no longer afford it. I have a medical card but the problem is is when you’re trying to see a specialist.
Eric Driver is 28 and farms part-time. He is engaged to be married and living in County Wicklow. He is concerned about any changes to agricultural relief and would like to see disadvantage payments going to those who make the most of their land.
I am 28 years of age and farming part-time in County Wicklow. I also work as an assistant mart manager with Local Livestock Mart, Tullow Livestock Sales. I’m also an agent for KW Forage Systems. I’m engaged to be married and have a brother and sister, both younger.
The farm comprises of 120 acres which is all rented on long term leases, with a stock of 440 ewes and 25 cows. I sell all progeny as store lambs or weanlings. The budget is a major concern for me and it is imperative that both stamp duty relief and 100 per cent stock relief is renewed for young, trained farmers.
It’s also very important that the 90 per cent agricultural relief is also renewed. It is hard enough to move land to the younger generations as is but with the removal of these structures it will bring a stop to any movement before death.
Partnerships have proven to work in many cases, but not all I hasten to add. The government need to amend regulations which in turn make the development of a partnership more financially fit for those entering the agreement.
I would also be hopeful to see targeted supports put in place by the government, maybe working with the banking sector and devising a structured loan, or possibly tailoring a scheme which will help young, trained farmers to get on the ladder. Currently there is no support to get a young farmer off the ground.
Education is a key strength we have in Ireland but if the government do not correctly review the earnings and profit on the family farm it will ensure the introduction of a two-tier education system, as farm families may not be able to meet the cost of education at a higher level.
Disadvantage Payments are vital in areas like my own, where land is less than favourable for farming all year round. The scheme needs to be ring-fenced and the money directed at those who are producing food and not the less productive people.
The budget is not going to be easy but it is important that government remembers the part of our economy that is growing and that is providing employment. Funds need to be directed toward the active farmers who are the active food producers.
Tomorrow we will be getting the views of:
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