Budget 2012: Some Suggestions by Annette J Dunlea

Nearly €4 billion needs to be raised by the Irish government in this year’s budgetThe Government is planning a €3.8 billion adjustment in next year’s budget, which will include €1.6 billion in tax measures and €2.2 billion in spending cuts.The total Irish budget deficit is expected to exceed €18bn in 2011 and the target shortfall is €17bn in 2012.Following a consolidation package of tax rises and spending cuts of €3.6bn in 2012, a General Government Balance of –8.6% of GDP is in prospect compared with 10% this year. The budget target is 2.8% in 2015.The 2011 Revised Estimates for Public Services break down that €53bn in current spending. Three quarters of the total, €39bn, goes directly as someone else’s income, either in the form of public sector pay (€15.8bn), public sector pensions (€3.2bn) or social welfare (€20bn). Of these three, public sector pay has already been significantly reduced, once to partially offset the money spent on pensions but also to reduce to actually reduce the Exchequer’s pay liabilities.
In Sept, IMF staff lowered projections for growth in demand for Irish exports, especially in 2012, although the impact on activity will be cushioned by the high import-content of Irish exports. In the the October World Economic Outlook, staff lowered the projected Irish growth rate to 0.4%in 2011 and to about 1.5% percent in 2012.The ESRI institute called for a budget adjustment in 2012 of up to €4bn compared with the €3.6bn mix of spending cuts and new taxes in the National Recovery 2010-2014 fiscal plan.The OECD recommended Irish structural reforms to tackle high and persistent unemployment. Its said jobless benefits should be cut the longer a person is out of work and receipt of jobless benefits should be dependent on the acceptance of a training offer.To meet fiscal consolidation targets, the report recommends spending restraint be focused on public sector efficiency, welfare reform and infrastructure projects. It also suggests broadening the tax base, through a reduction in tax expenditures and introduction of property tax.
The Irish Fiscal Council said:
The Government faces an unenviable balancing act in deciding the appropriate fiscal stance for 2012–2015: the domestic economy remains weak, while the debt and funding situation for Ireland will remain fragile for some time to come.
Weighing up the different elements involved, retaining the current SPU targets as a percentage of GDP is viewed as within the range of appropriate courses of action.
Relaxing the budgetary targets agreed in the programme with EU/IMF is not a viable option, given the need to safeguard hard won gains and the creditworthiness constraints imposed by both the market and official creditors.
The Council’s main conclusion is that there is a strong case for a strengthening of the fiscal consolidation effort beyond that targeted in the SPU. The Council believes that a General Government deficit target of the order of 1% of GDP for 2015 would be appropriate. The Government’s current target in the SPU is a deficit of 2.8%.
Where will the gov make the cuts ?
1. All state (including politicians) pensions to be given at 65 or older.
2.One salary per td: for minister, seanad or dail work…fixed salary, public or civil servants
3.No pension of tds continue to work
4.Upon retirement tds and civil/public servants get lump sum or annual salary not both
5.Stop all increments until IMF/EU are paid off
6.Cut Semi State top salaries to max. 140,000 in line with all civil servants
7.Means test children’s test…no family earning over €50,000 to get children’s allowance
8.All government employees work shift rotas and days in lieu instead of overtime
9.No Xmas or performance bonuses at end of year to any managers…paid to do their salary already
10.Increase Carbon Tax
11.Increas VAT to 23%
12.Increase perscription charges to €1.00 per item to a max of €15.00 per family….€2 per item proposed?
13.Annual charge of medical cards proposed?
14.Suggested €10 cut in children’s alowance per child
15.No rent allowance if people refuse 2 choices of social housing
16.Increase fines for litter pollution
17.€100 property charge is proposed
18. Introduce fixed water charge
19.Introduce fines for anti social behaviour and allow for fines to be taken weekly from welfare payments
20.Introduce fines for noise pollution
21.Privatise certain sevices : care of old age, water charges, litter wardens, traffic wardens, local housing and sevices etc..these should go to public tender
22.Call out charges for ambulance and fire brigade for non-medical card holders
23.3rd level government loans for postgraduate courses..first degree free
24.Redundancy pay to be abolished
25.Revisit Croke Park Agreement
26.If legal fees are to be streamlined and laid out more clearly all other professions should too: dentists, doctors, builders, electricians, plumbers and electricians. Public signs should show their call out charges and price per hour or day.
27.No overtime payments to be paid by the state.Ovetime bill costly the state €1 billion per annum.
28. Increase in income tax
29.Suggested increase in household charges
30.Higher DIRT saving charges
31.Suggested phasing out of mortgage relief
32.To reduce childcare costs the state need to buy creches or old schools and create state creches.This would take people off the dole and allow mothers back into the workforce.Fees to be means tested.
33.Share custody of kids bewteen both parents like in America, both parents then pay half medical, educational and childcare costs.
34.Greater focus should be put on creating jobs and targeting higher income earners
35.A waste and savings audit should be done in all departments
36.Bin Charges Tax Credit to be abolished
37.The Rent Tax Credit is being phased out
38.The maximum amount of tax relief allowed on pension contributions will drop from 41% to 34% in 2012, and by another 7% in each of the following 2 years to bring the maximum amount of relief down to 20%.
39.Suggested Extra duty charged:Petrol, Diesel, Alcohol & Cigarettes
40.Increase motor tax charges
41.Suggested make all government payments taxable after first €150.00: dole, children’s allowance, carers, travelling expenses, rent allowances,maintenance etc
42.Make all court settlements and employers tax available online to welfare maintenace orders and compensation claims to be assessed by social welfare officers.Cut out black market working and double payment of maintenance by dad and state.43.Cease payment of all staff increments until IMF-EU loan repaid or Ireland’s recession ends
Budget 2012 will be split in two speeches in the Dail by two ministers over two days.Mr Noonan’s speech will outline tax hikes, the fiscal picture and the economic outlook for 2012. Minister Howlin will also release background documentation related to the Comprehensive Review of Expenditure.The austerity Budgets that began in 2008 have hit the average family take-home pay by almost €600 a month.

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