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THE GOVERNMENT’S NEXT budget, the last before the next general election to be announced in October, will contain an additional €1.4 billion in tax cuts and spending.
The coalition’s spring economic statement is due to be released tomorrow and will set out Ireland’s proposed economic direction for the next five years.
The spring statement is to be announced following a cabinet meeting, but it’s details have been learned in advance by the Irish Times.
Ireland’s economy is expected to expand at a greater rate than predicted in last October’s budget, with Gross Domestic Product (GDP - a measure of the total income generated in an economy over a period) now expected to increase by 4% this year as opposed to the just under 3% announced in the 2015 budget.
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It therefore seems the last budget before the election will be the easiest on the electorate in about six years, after several particularly severe austerity-led budgets in a row.
Jobs minister Richard Bruton and Enda Kenny Sam Boal / Photocall Ireland
Sam Boal / Photocall Ireland / Photocall Ireland
Reforms to be announced in the statement include:
Cuts in income tax
An overhaul of the taxation system for self-employed workers
Talks with public sector unions with a view to pay increases
A demand made of the banks to cut variable mortgage rates
These are all moves that are likely to go down particularly well with voters, not least the positive news for the self-employed and small businesses, an influential demographic the government is keen to stay onside with.
Ireland’s economy is going through something of a renaissance at present, with 2014 seeing our GDP increasing by 4.3%, almost four times the average for the Eurozone in the same period, and 20 times the growth seen in 2013.
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there are no investigative journalism in this country because one man denis o brien owns all the papers, even sacking an investigative journalist for knocking on ex garda callinan’s door
If they don’t return at least some of that levy imposed on private pensions, many of which were already struggling, then my vote will go elsewhere. Talk of across the board increases in public service pay, including that of the politicians, is nothing short of reckless, given that public service pay is still higher than equivalents in the private sector and is high relative to other EU countries.
€4 billion last year, €4.7 billion this year is the short answer.
You’d have to find nearly €5 billion in taxes elsewhere to plug the gap (now, remember that we’re still running a deficit – this “additional” money available is based on just running a controlled one. We haven’t balanced our books.)
You’ve got €1.4 billion here. Good start, if you’re happy to ignore everything else. Next idea? Bearing in mind that the Irish people have been having conniptions about property taxes and water charges that raise a few hundred million a piece.
Our tax base collapsed from about €50bn a year to €36bn a year when the crash hit. Why? Quite a lot of it was because previously the government had funded itself heavily on once-off transaction taxes, primarily related to house building and selling. USC was both a temporary measure to try and bridge that gap, but in the long run it’s also one of the sustainable tax bases that can pay for the size of a state that we want; where government spending never really dipped below €50bn.
And 100bln of that debt, Denis, is based on what was previously an unbalanced primary book. We don’t and shouldn’t get to pretend that this didn’t simply happen. As such, we need to service and ultimately pay down that debt.
We can finance same with further restraint, and by maintaining a solid tax base.
I remember the early 00s, getting a 1% decrease in the lower tax rate annually, and improved Tax Free Allowances (and later credits). All of that eroded the tax base, the USC is an amalgamation of the previous 2% health levy and pulling those tax rates back in.
FF could have elected to increase the 20% and then 41%, but instead they decided to pretend they weren’t increasing the main tax rates and create the USC with *some* suggestion that it was temporary. Well it wasn’t temporary, we know it now, and we knew it then if we’re honest with ourselves.
That’s 4-5Bln in income tax that we simply cannot do without. It’s called USC, but it’s income tax – the government just wants you to think that income tax is consistent.
Of our debts, 23% is related to the banking bailouts. The rest is related to deficits we’ve run on day to day spending. Even if you cut out the banking debt, we’d not be running a surplus; and saying “Well, we’d be running one except for our debts” is the same as saying “I’m doing well, if only the credit card company would stop ringing me looking for repayments.”
The debt is unsustainable. by 2018 we could be looking at over 10bn just to service it. at this carry on we will need an ever-increasing income tax just to keep up with the interest payments, in the mean time the country’s services are getting forgotten. It’s a vicious circle that a lot of country’s find themselves in. A disaster just waiting for the next crash, and it’s not like were in some kind of boom cycle at the moment is it ?
You have to ask yourself ,1.4 billion will bye a lot of sweets, how meny votes will it bye,
Is this the direction we are headed again. https://youtu.be/qZ9dYiTemJ4
I think the debts are painful but sustainable – For example at the moment the NTMA is refinancing debt at record low interest rates, which will lower the servicing costs. Nevertheless, it is a lot of money; but this idea that it’s all related to banking (or even a majority of it) is plain wrong.
If we had cut government spending in line with the tax take, we’d not have this issue. But then pick the hospitals and schools you’re going to close….
Simple fact of the matter is that if you build national finances on sand, it’ll all fall apart when the tide comes in as it always does in the long run.
Aaron our banking bailout debts accounts for over 1/3rd of our debt some. 37% lets not pretend that this money has also added interest payments to our over all debt. and as a country we’re not allowed to claim bankruptcy and move one. the EU won’t let us and we haven’t the politicians with balls to sort it out. 8bn interest this year 10bn in a few more years.
“I think the debts are painful but sustainable” seriously Aaron. and you’re supposed to be an economist. LMFAO since when is spending 20% of our tax take on paying interest “sustainable”
All through the recession, Denis, I was saying “We need to cut spending, we need to cut spending, we need to cut spending.” I was also saying that nationalising the banking losses was a complete mistake.
How and ever, we’re here now, it’s 2015 and what’s the viable alternative? Default on a load of loans? Effectively cutting ourselves off from international capital markets for the foreseeable future and become a state like, say, Argentina? Probably have to leave the Euro?
Now, if you claim that we can default without any of those consequences frankly you’re wrong. Greece are playing that game at the moment and it’s not going well for them. If you’re willing to accept the consequences, go get a mandate for it – Bearing in mind that the Irish people are all for cutting our national debt, but if we have to close a hospital or a school or raise a tax on property or water to do it, they’ll cut your political head off.
we are continually fed those stories of comparing us to Argentina or having to pay extortionate amounts of interest or having to leave the Euro. They are all scare tactics propagated by the EU. they want their money back is all, Why did you not mention Iceland? and we best wait to see how Greece pans out before jumping to conclusion. Is what we have now best serving for the Irish people or just those in the know like with siteserve. why is it during the recession the gap between rich and poor got bigger ? why haven’t we got a better deal on our debts yet? you can’t cut your way out of a recession its an ever decreasing circle. And if you missed the boat we have already closed hospitals, Garda stations. schools, cancelled medical cards and raided the pensions of not only the public but private too, and we are still deep in the debt hole. just wait for the next crash, as this recovery is also built on sand. Even you should see that Aaron
never mind that . where is all the reporting on siteserve. why is it left up to a TD to do the investigative work. why has very little reporting about the illegal inside trading on siteserve shares not been fully exposed. ?
Well, the Greek government came to power saying they were going to stick it; 29 days later they were offering a plan to continue to meet their debt obligations by continuing austerity. They’ve vacillated, and are now either going to meet their obligations or default and leave the Euro.
That’s the realistic situation, not fantasy.
Our debt repayments are dead money, but people didn’t see it that way when state taxes collapsed to €36bn and spending was north of €50bn and we had a choice between closing that gap quickly or doing it over the long period we have done. The cuts would have been a lot more severe, but our recovery quicker in my opinion; had we not taken on that debt.
Fact is, we chose a different route and now we either meet our obligations or become another financial pariah state.
Aaron, with all that informed opinion you wont last two seconds in here!
You’re supposed to talk about how Enda stole your baby.
The budgetary measures all sound good with the exception to buying the union votes and the public sector wage. An obvious bent knee to Labour to try and (unsuccessfully I’d imagine) save them from annihilation in the next GE.
Whoever forms the next Government will be coming in at the perfect time. Austerity is ending and we’re now producing expansionary budgets, and EU quantitative easing will just be kicking in, injecting billions in virtually free money into the Irish economy for capital expenditure.
Historically, this is where FF come back into government after bowing out for a term for someone else to clean up their latest mess. I wonder will history repeat it’s self this time around?
Probably, and probably with Sinn Fein in partnership.
COYBIB. the EU QE will do shite all for businesses. how did that pan out in America. practically none of the QE tricked down it was all swooped up by the banks and markets. Banks have been getting nice interest rates for many years now practically for nothing and yet mortgage rates and lending are some of the highest in the EU. QE will just mean that the top cats get more to invest and play with.
Aaron that 64 billion is an “odious debt ” what we should do is take the power of creating money away from private banks and create our own money debt free we dont need europe its a load of crap.Think about it in order to create money you have to create debt so how on earth do you fix a debt problem by creating more debt aka “quantitative easing” the monetary system is flawed just like the capitalist system out dated and only suiting the few.
Aaron….can you tell me why we should still pay two billion a year(average) over the next 40 years for bailing out the bondholders of Anglo and Irish Nation Wide on the instruction of the ECB. If you consider that after the fact, other members states of the EU brought in rules to prevent it happening to them in the future.
If we decide not to pay or burn our cash on the promissory note, not a hair on a bondholders head would be touched as they have ridden off into the sunset with our money, if we don’t pay the ECB will have to take the hit and no one else.
That’s what ‘Ballyhea Says No’ is all about……do you support their protest?
At least Aaron has admitted not once but twice in an almost insulting tone that Irish Water was never about infrastructure and conservation but another valuable source of income for his government buddies,
Aaron McKenna
We are a financial pariah state, the corrupt bankers and government are feeding on the corpse of citizens it is devouring and destroying.
We’ll be able to fit more meters now so – more Garda overtime and more for Siteserv . – all subcontracted out – does this represent value for money if there is enough margin to sub it out – surely a more localised approach with the Councils overseeing it would have been the order of the day – cut out the middle man …..Oh but then the great R.P.S. Plan wouldn’t continue to leak along – Irish Water.
Not all of them but yes I understand what you are saying Ciaran, It is a copy and paste world that a journalist lives in. Due to needing to be the first to get it out there, Create SEO to get hits on web site and building it up in your own words. I have worked as a journalist and have been told just use the press release and put in none of my own wording. It is a shame because some well constructed arguments could come of this. I do agree in what you are saying but it is not just Denis O’ Brien. Many others are at it too.
1.4 billion euro giveaway when we owe over 50 billion to bond holders, should the government not be repaying our debts rather than bribing us to vote them back in
Jack I was under the impression that WE do not owe anything, the banks owe it and we do the paying. If the bond holders are paid then it is the turn of the banks that messed this up to pay us back… Every cent, and let us have interest too.
Correct Brian. Also, tax cuts favour the haves and have mores the most. The cuts in the last budget handed something like 450 million to the top 17% of earners, at a time when children with cancer are losing their medcal cards and families are losing the roofs over their heads.
It’s deplorable that we’d have a giveaway when we consider what 1.5billion on health and education might provide, and what some targeted capital investment might provide by way of jobs and economic opportunity in some forgotten decimated regional towns.
The tax increases of the last few years are the unraveling of years of McCreevy/Cowen giveaway budgets. We should keep the solid tax base on focus on investing in services first.
However, money in pockets = votes when you’re a centre-right party, and they hope that people will continue to spend more in the consumer economy, forgetting that a lot of it will just make its way to German/French/Japanese car manufacturers, get spent on foreign holidays, etc.
Fg will hand out 1.4 billion this budget comming but will take it back the following year through other taxes they really think people are tick.Lies that come out of them and trickery is deplorable https://youtu.be/27UL3tZW1bk
Opposition parties can make promises with this 1.4 billion too. FF won’t be believed as it’s too soon… too soon, but SF should have some interesting policies for use of this money
The problem is that the Welfare system here is already generous enough. Any increase in taxes for the rich should be used to help the lower paid people who actually bother to go out and do a days work.
At the time they were not living beyond their means. Obviously the banks would not have lent them money otherwise. I mean, politicians and their business cronies are honest…aren’t they? It must be great to be so fvckin smug and self satisfied. Relishing the idea of others misfortune.
So johnny you say people lived beyond their means and are now buried in debt lived beyond their means . so what about business who borrowed behond their means getting writedowns for hundreds of millions. Bill left with taxpayers . guess you think that’s OK.
@ boga…didn’t we used to tax the “weathy” at up 75p in the £ at one stage, that worked very well !!! NOT! PS FG will be back in Gov next time no problem if only for the fact that there is no real alternative, we could vote SF in, if we want to jump from the pan into the fire!.
My only question is where the hell do the get 1.4 billion to sweeten the PS.
Daniel, pensioners have done their bit for many years. Suffered many cuts in all directions. Had bills added too. It us more than fair that we get back monies and have a reasonable amount for our last years.
Why should they have to plan to make a demand of the banks to cut their variable rates? They are extortionate- just do it now. Today! Backdate it.
Its all poppycock
yeah and I love the way the media use the phrase ” Ireland’s economy is going through something of a renaissance at present,” when in fact they mean we’re boom and bubbling.
So services all over the country closed or downgraded. Health service in shambles. Schools underfunded. List goes on . now before the next ge and in the next budget. They are going to give away 1.4 billion. Only recently children with cancer could not get medical cards and 1 family had debt collector’s calling because little boy with cancer had lost his discretionary medical card. Are they for real.
It’s amazing when this government of vampires is under pressure they manage to find money to give away in a budget. Is Irish society so gullible they believe this horsesxxt. Can’t wait for the next election so I can let them know how I feel about all the lies they told before the last one.
Did i just see an elephant flying through the sky??
Is it going to be a case of give a little back, remain in government and then tax us again. We will probably be taxed for these new postcodea no doubt!
It is depressing to say, but what are the options?
FF, they caused the recession.
SF, they would speed is back into recession with their remedial economics.
Labour, sold their principles up the river.
FG, lost a golden opportunity to fix things for good but showed they are no better than FF for ineptitude and cronyism.
Independents, a few good ones but Daly/ Coppinger/ Wallace are an embarrassment.
Reuna, a joke party.
I’m giving Sinn Fein my vote this time with Fine Gael as junior partner in the hope that Kenny Adams and Noonan will be gone and Fitzgerald and Mary Lou in the leadership.
Shocking I know but that’s just how bad this shower are
1.4 billion announcment a day after a bad poll plus sitserv scandal…i really have to laugh here..do they think we’re actually that stupid ??? It makes them look stupid from my pov!!
Relax people. Brendan Howlin, Minister for TD Health & Welfare says the budget will reverse the unfair, draconian cuts in Civil Dervants, TD’s and Ministers pay. Shure an Begorrah don’t they just deserve it. And he says it’s all about being fair to everybody. Obviously he means everybody in the Golden Protected Circle. Fcuk the rest of us!
Fine Gael champions at dis-incentivizing working in the private sector. Anyone who doesn’t work in the Public Sector is nuts. More salary, better conditions, super pensions, job security.
Give sf a chance i say along with some very good independents..ff,fg,lbr had their chance and blew it..usc and water charges need to go plus some serious stuff going on right now with sitserv!
This really should hammer home the nails in the coffin for the coallition
Give away sounds about right! Give away more of OUR money to write down debts of companies/pay off more unsecured debt etc..
Dont be fooled, thats just the 1.4billion that was taken in from the motor tax and vat that usually goes into water services.
FG have no idea how to incentivise an electorate to vote for them, because FG have no interest in supporting anybody other than the wealthy.
Half that €1.4bn will probably be needed by Health by Budget Time the remainder will be used “easing the pain” for the better off in society.
So don’t vote and let FG/LAB/FFback in? I’ll take a punt with SF this time. They will know that if they are elected that they will have to keep their promises or else face the consequences. I really believe that they will do something about the corruption which is the most important reason to vote them, that and the abolishment of Irish water…ex FF and FG voter btw.
1,400,000,000 in borrowed money being ‘saved’, from paying the people we borrowed, at interest, from in the first place. Yeah, lets not give it back, shur its only compounded interest and the principle that was forced on us, which just increases and increases.
FG have invented a new way to buy re-election. Not only borrow money, they borrow it twice!!
I red thumbed you reg, I want Kenny,Noonan,Labour and the water debacle gone then I’d take a cut in USC bringing the point of top rate of tax up to €35 grand would be a start, we’d still hit the top rate well before other European countries, I don’t like comparing us to other countries but the government seem fond of it, the point you reach the higher rate should be €50 grand in my opinion.
How about this for an idea. Give it back to the people who own it,the taxpayer. Surplus tax is not a slush fund, we’re obviously being overtaxed. Give it back! Or is that concept too American for the high tax free spending socialists we are plagued with.
Hold on a minute Minister Noonan … what about us 300,000 who were “obliged” to jump ship after the crash, getting out taxes back first? 300,000 x 15 yrs x 10,000 ……. just €45 Billion … much less than ye gave the banks.
Balance the books by balancing the Public v Private income first and reduce the inordinate tax burden to support it.
CSO figures for average public and private sector pay – 2013.
€565 : UK average private sector weekly pay.
€581 : UK average public sector weekly pay.
Difference : 3%.
€623 : Irish average private sector weekly pay.
€929 : Irish average public sector weekly pay.
Difference : 49%. reduced to 43.24% in April 2014.
- 300,000 Irish Private Sector workers overboard since 2008 …
- What a disgusting immoral country.
Kenny promised reform-failed. Labour Howlin gatekeeper for public sector unions who will vote them in again if they get dosh. The apartheid between public/private sector is extreme not only to salaries-also Pensions. Public Sector get “Defined Benefit” pensions which are very lucrative whereas private sector majority have no pension. Kenny sold his soul. The dishonesty in this country to face the facts is shocking. Voted fg 3 times but they can forget it now.
Dosn’t that grin on Noonans ugly mug say it all, like IW, we promise to give you €100 if you pay us €1,000 a year for the rest of your life, its a bargain !
Role up, Roll Up, give us your money or else !
All of a sudden they have money to give away. Hopefully people will see that this is just a vote buying tactic. Once back in power they would likely claw all the money back via more austerity. Their not getting my vote. Never Never again will I fall for their s*it.
There is 1.4 billion extra there, right ?
Why not borrow 1.4billion less next year ?
So the government will spend this money buying votes and then go borrow billions? Make no sense
Yes but debt is needed so banks can print more money and this means the rich gets richer and by the time it drips down to the rest of us then. The banks will print more money, this will bring up the cost of living and this will bring up wages that will also increase on the cost of living and then there will be more debt for the banks then to print more money.
Everyone that is rich loves debt and everyone is borrowing from each other as well as loaning to each other, debt will eventually hit a level where an E.U. Political Union will create a Federation where due to monetary union all debt will be centralised within the E.U. P.U. and everyone will be happy with a Federal E.U. bank then.
Incumbent cuts taxes etc and people are up in arms about buying the electorate and an array of other amateur dramatics.
The opposition (well the Lefties really) say they will cut taxes and its labelled sound social policy and a cornerstone of a wonderful economic policy.
Can’t be folks and really shows how full of sh*t the Irish electorate are.
Are you going to let them kiss you on the cheek, and buy your vote for thirty pieces of silver? I’m not, it’s a pound of flesh that Im looking for , not a 1% tax cut
In spite of FG/Labour usually being more competent than FF, after the first 5 months (late summer 2011) of this government, it’s been an almost continual series of lies, misrepresentations, evasions, divisive legislation and budgets, failure to be willing to tackle vested interests, spin, misdirection, selective use of every report and statistic available, irrelevant arguments, authocratic statements, contempt, threats………Our society cannot cope with another term of FG/Labour. I mean that. The relative good work this government has done in certain areas could not possibly be justification for overlooking (if you can remember all of the bad, incompetent and corrupt examples) the serious harm they have done. I don’t even have to use any exaggeration. Their record speaks for itself. David Norris obtaining a copy of the list of Anglo bondholders, when our Taoiseach and ministers said they did not know (“Who are the Anglo bondholders” – Vincent Browne clip on YouTube) should have caused a mass public demonstration at the time. That’s not the worst example either.
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Ensure security, prevent and detect fraud, and fix errors 92 partners can use this special purpose
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Your data can be used to monitor for and prevent unusual and possibly fraudulent activity (for example, regarding advertising, ad clicks by bots), and ensure systems and processes work properly and securely. It can also be used to correct any problems you, the publisher or the advertiser may encounter in the delivery of content and ads and in your interaction with them.
Deliver and present advertising and content 99 partners can use this special purpose
Always Active
Certain information (like an IP address or device capabilities) is used to ensure the technical compatibility of the content or advertising, and to facilitate the transmission of the content or ad to your device.
Match and combine data from other data sources 72 partners can use this feature
Always Active
Information about your activity on this service may be matched and combined with other information relating to you and originating from various sources (for instance your activity on a separate online service, your use of a loyalty card in-store, or your answers to a survey), in support of the purposes explained in this notice.
Link different devices 53 partners can use this feature
Always Active
In support of the purposes explained in this notice, your device might be considered as likely linked to other devices that belong to you or your household (for instance because you are logged in to the same service on both your phone and your computer, or because you may use the same Internet connection on both devices).
Identify devices based on information transmitted automatically 88 partners can use this feature
Always Active
Your device might be distinguished from other devices based on information it automatically sends when accessing the Internet (for instance, the IP address of your Internet connection or the type of browser you are using) in support of the purposes exposed in this notice.
Save and communicate privacy choices 69 partners can use this special purpose
Always Active
The choices you make regarding the purposes and entities listed in this notice are saved and made available to those entities in the form of digital signals (such as a string of characters). This is necessary in order to enable both this service and those entities to respect such choices.
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