James Lawless – View from the Tracks

Logging as it comes in…

Construction – got it wrong – over dependent – property bubble

International perspective

Contraction property sector

Openness economy

Stablise public finance

Restore international reputation

Stimulate economic confidence

Protect Jobs

Repair banks

“From each according to his means”

Governement examining own costs..

Remuneration scheme

10% additional reduction, (25% reduction already)

No long service increments

Ministerial Pensions in service – gone

Teachers differences – gone

Oireachtas chairs – halved

Whips, vice chairs – no extra allowances

10% – Ministers, Cabinet

Public service levy – 20% down due to pension levy and other cuts

Review of top level pay rates, changed circumstances

Benchmark against Euro countries same scale

“From each according to his means”

Progressive – tax changes –

Minimum wage – 7 euro per week 2% of income

300K PA – 300 per week 9% income

Against extra debt 12.75% GDP ratio national debt

Now targeting 10.75% borrowing target ratio

Limited scope for public expenditure cuts – prefer not to cut public sector pay further, cancel infrastructure or cut welfare rates

Over reliance on construction related activity in economy

“Multi-annual consolidation plan”

Spending cuts = 2.7BN (2010)

Capital Cuts (1.3BN 2010)

Public sector pay roll (reduction cost of payroll – levy saved 1.4BN; Numbers to go now – ban on recruitment; Early retirement over 50s new scheme no penalty; Pensions will be taxed in future; Lump sums possibly in future budget)

Welfare spending 21BN budget (Pension has increased up to now)
No reduction this budget – flag for future years

No December welfare bonus; Job seekers allowance halved ; Rent supplement reduced (fall in rents); Welfare fraud targetted; Non nationals especially; Child benefit taxed from next year

Early childcare supplement – preschool year ; new supplement instead ; existing benefit to be abolished at end of year.

NDP spending programs will be met, tenders more competitive now. Sustain construction and development.

Extra PPPs to fund infrastructures ; consider sale and leasebacks ; national recovery bond

Taxation

12.5% coroporation tax to remain

Tax shelters, loopholes to be cut off. Residential rental reliefs cut. Trading profits residential land gone. Property health schemes (private hospitals) tax reliefs gone.

Mortgage interest relief – available first 7 years only.

Capital gains increase to 25%

New levy rates 26,000 – 75,036 – 174,980; 2% ; 4% ; 6%

1st May 2009 ; extra taxes become effective

Remoulding of public service levy – addresses anomalies at bottom end

25% extra tax on cigarettes ; no increase on alchol or petrol ;

Bank restructure..

Tags: Budget