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THEJOURNAL.IE HAS OBTAINED the financial documents distributed to German MPs – and can confirm details of the Irish government’s plans for next month’s Budget.
The documents formally outline the government’s plan to increase the higher rate of VAT from 21 per cent to 23 per cent – two years ahead of the conditions required by the original EU-IMF deal – and plans to increase a number of other taxes.
They also outline the areas in which the government proposes to cut spending by €2.2bn in the Budget – mostly through cutting expenditure in social welfare, cutting the numbers working in the public service, reforming public pensions and cutting capital expenditure.
The documents – which were controversially circulated to German MPs on Wednesday – contain a provision allowing the government to scrap some of the proposals and replace them with others.
The Department of Finance this afternoon insisted that the documents were draft versions, and that no decisions had been made on what tax increases would be made in the Budget – though Michael Noonan told RTÉ’s News at One that he would be proposing the 2 per cent VAT increase at cabinet level.
However, TheJournal.ie understands that the provisions included in the draft documents will form the basis of the 2012 Budget – as the documents will be used by EU finance ministers to approve the latest round of €4.2bn in bailout loans, just six days before the Budget is announced in the Dáil.
The package of documents also includes:
Next month’s Budget proposes to make €670m through the VAT increase, €160m through the new €100-per-house ‘household charge’, and €100m through the reform of capital gains tax.
The government will cut capital spending by €750m, and current expenditure by €1.45 billion – with the latter cuts coming by reducing the number of public jobs, reforming social welfare entitlements and cutting Departmental programmes.
While the government is keen not to cut social welfare rates, it proposes to produce “a comprehensive programme of reforms that can help better target social support to those on lower incomes, and ensure that work pays for welfare recipients” – which may indicate that eligibility for social welfare could be reformed so that fewer people qualify for benefits.
Elssewhere, the government asserts that it is committed to tackling social welfare fraud, as opposed to across-the-board cuts in welfare payments.
In regard to the 2013 Budget, the draft documents propose:
Revenue measures to raise at least EUR 1.25 billion, including:
- A broadening of personal income tax base
- A restructuring of motor taxation
- A reduction in general tax expenditures.
- An increase in excise duty and other indirect taxes.
Expenditure reductions of no less than EUR 2.25 billion, including:
- Social expenditure reductions.
- Reduction of public service numbers and public service pension adjustments.
- Other programme expenditure, and reductions in capital expenditure.
The €250m funding for credit unions will be recouped through a “levy”, details of which are not elaborated on – and further funding to back up the lenders is allowed for at a later date.
The documents also say legislation to reform wage agreements – in the sectors affected by the JLC court ruling earlier this year – will be compiled with Troika input by the end of 2011.
Why do we give a billion euro trade opportunity to organised crime, let them supply dangerously adulterated products of unkowable quality for consumption by honest and mostly respectable people who we then criminalise for their taste in intoxicants ?
Does that sound sane to anyone ?
@Steve O’Hara-Smith: because the “war on drugs” mantra. Drugs have won that war a long time ago!
Should have just seized the cocaine. Some drugs are seemingly ok to sell according to the resident Journal druggies
@Mattress Dick: 16 year olds have easier access to weed than alcohol. That weed is unregulated, of unknown strength, could be full of chemicals and is of unknown quality.
Why are we still doing this? How many times does this need explaining?
@Tomo: you’re right. Seizing all drugs is good so it doesn’t get into the hands of kids
@Mattress Dick: correct. Like nicotine. And alcohol. And caffeine. Maybe when Germany and Luxembourg join Canada in creating a legal, regulated market for recreational cannabis, druggies like you will add cannabis to your list of acceptable drugs.
@Mattress Dick: I’d rather listen to well informed druggies than an /gn0rant moral crusader who thinks they know how everybody else should live their life!
@Mattress Dick: If you were genuinely worried about drugs getting into the hands of kids you’d be pro legalisation. As it stands, we leave all control to the black market with no quality checks, no age limits and no oversight.
And if this valuation is correct then this is €1.3 million in lost revenue to the state which is obscene. And that’s not counting all the money wasted trying to enforce prohibition.
We have got to wake up on this..
We are fighting it – keeping the drug lords in business.
Germany legalising it – pushing drug lords away out of business.
Comments open on a criminal investigation?!
@Ciarán O’ Donoghue: *Grabs Popcorn*
@Ciarán O’ Donoghue: comments will be closed once/if they are charged.
They will be out on bail in no time and whatever crimes they subsequently commit will not add to their sentence.
The drugs seized sold back to the gangs by CAB and then done over and over again for the great money loop
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