Fine Gael’s pre-budget proposals, launched today, are something of a curates egg, at once promising 30,000 job losses in the civil service, yet aiming for 100,000 extra jobs. We look at some of the highlights of the plan and what they will mean for you.
Limiting tax increases to one-quarter of the adjustment next year and one-third of the adjustment over four years.
That doesn’t sound too bad, but with a €6 billion ‘adjustment’ (that is, cuts) planned next year, that means €1.5 billion extra in taxes in 2011 alone.
Radical public sector reform to end waste, inefficiency and duplication, starting with the political system.
A largely symbolic cut in the number of TDs, and (subject to a referendum) abolishing the Seanad. It won’t make much difference to the bottom line, but it allows the government to say politicians are “sharing the pain”. But remember, the next Dáil will have to run its course anyway, so it could be 2016 before the changes take effect. In the meantime, expect howls of pain from TDs and Senators.
A jobs and stimulus plan.
Cake for everyone in the audience. And possibly cheese.
A much greater emphasis on closing tax loopholes for the rich, including suspending property-based tax reliefs and tightening the rules for tax exiles.
Expect hostility to this idea from Independent Newspapers (major shareholders: Tony O’Reilly, a tax exile, and Denis O’Brien, a tax exile). The Sunday Independent will drip with rage this weekend.
A fairer approach to Fianna Fáil’s proposed annual recurring property tax on the family home.
There will be lots of talk about fairer, better, and more efficient approaches to ideas proposed by Fianna Fáil. But mostly it boils down to admitting Fine Gael will run with the same ideas as Fianna Fáil, with some cosmetic alterations.
18,000 more voluntary redundancies in the public sector than the Government proposes.
A job cut by any other name is still a job cut. Combined with the Fianna Fáil proposals, that means 30,000 fewer civil servants. Probably unavoidable though.
Targeting the €3 billion worth of annual social welfare fraud through the establishment of a single Payments and Entitlements system.
Because they’re all scroungers anyway. For one example of the myths surrounding dole fraud, check out the Legend of Ballyconnell. And yesterday, we had the saga of the Fingerprint Machine.
Replacing the minimum wage cut proposed by Government with a cut in the jobs’ tax to encourage people off welfare and into work.
This seems to mean a cut in employer’s PRSI. As the plan says later, Fine Gael will “abolish the lower 8.5 percent rate of employers’ PRSI on staff earning below €356 per week for at least three years to reduce employment costs”. No direct benefit to workers, although it may make creating new jobs easier, but it should please Ibec.
A €10 million one-off marketing budget for State agencies to restore Ireland’s battered business reputation across the globe.
Fine Gael does Mad Men. We encourage readers to suggest slogans for this campaign.
Increase DIRT to 30 percent to encourage higher levels of household consumption.
Except, lower savings mean the banks will need even more money to thanks to their insolvency woes.
Cutting the threshold for application of minimum 30 percent effective tax rate to €250,000 from €400,000 at present (with marginal relief from €125,000).
Seriously, how rich do you have to be in Ireland, before you’re really rich? why not €100,000? Why not €70,000, which is about twice the average industrial wage?
Implementing at least half of the McCarthy report recommendations.
Things have moved on since Colm McCarthy published his Bord Snip Nua report. Even implementing the entire report would save “only” €5 billion. And the EU/IMF needs us to cut a multiple of that figure.
Close FÁS and the HSE and abolish 145 quangos.
And replace them with something even more bureaucratic and expensive.