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Extract from article on austerity below, ‘…Even though we’ve been the good little Europeans and we passed the Fiscal Compact Treaty like they told us to, rowed in state expenditure and capital spending, are in the process of further reducing public pay through Croke Park 2 to the chagrin of public servants and sucked up the property tax once the heavies from the Revenue Commissioners were enlisted to deduct the payments from source, it seems the allure of the roulette wheel of fortune at the Austerity Casino is too enticing for this Government to give up in any budget too soon!…’ (Scroll down for full article!)
Minister for Finance, Michael Noonan, outlines details of the parameters for Octobers budget, details below in Irish Independent and Irish Times articles on current Budget negotiations in cabinet.
Fine Gael upped the ante, with one minister calling for an income tax reduction “as soon as possible”, starting with families on average incomes.
But Labour has indicated that it wants to see fewer spending cuts in areas like social welfare.
Differences over whether to ease up on austerity through tax cuts or spending increases are now coming into focus after Mr Noonan said there seemed to be “some leeway” for Budget 2014.
This is the first time that a Finance Minister has held out the promise of any easing of austerity after six bruising Budgets in a row…
Noonan says income tax hikes should be avoided
Stephen Collins, Wed, Jun 19, 2013, 12:44, First published:Wed, Jun 19, 2013, 12:25
Twenty five years ago this past week, Ray Houghton unwittingly started a cultural revolution and a revival of confidence in the Irish psyche with a looping header after six minutes into the back of the English net in Euro ’88. Little did we, or the Irish soccer team know that day, that this was the catalyst for the beginning of a new Ireland that believed in itself and one that had, in some small way, removed the shackles of British imperial subservience in the mindset of a people beset by seven hundred years of subjugation, subservience and suppressed sovereignty. Little did we know that a mere twenty five years later, that the baton of our sovereignty would be ensconced in the sweaty paws of Brussels for the last five years, with no end in sight.
In the eighties, we didn’t have massive personal debt, we didn’t have massive mortgages in negative equity, what we did have was 60 pence in the pound taxation, with PRSI on top of that, we had a wage at the end of the week, a shitty car in the driveway that was paid for outright, and we had a tab in our local shop, that we cleared at the end of the week. Now the wise sages blame our own personal greed, but not all people in this state were greedy, they simply tried to make a future for their family, by buying a home, having a holiday once a year and maybe a half decent car in the driveway.
Fast forward to the nineties, when Italia ’90 and USA ’94 propelled us onto the world stage as a half decent bunch of footballers that very few countries wanted to face, and Feile and Riverdance were the Irish cultural phenomenon’s for the nation. I remember spending Christmas Day alone in a friends house in the North West of Ireland, and I vividly remember watching The Lyrics Board (a bizarre Irish international success story in TV land throughout the world), drinking a few glasses of Dark Rum and tucking into a healthy meal of Beans and Sausages, but this was après college time in my life and the future was bright and the prospects of better days were blooming! That was an Ireland where things were tough for many people in society, but things were starting to turn the corner, quickly for many, but slower for others.
In the interim, this country has seen unprecedented building growth and infrastructure throughout the country, but also a legacy of greed and materialism. A house of cards economy was built upon speculation, political ineptitude and drastically over inflated property. As headlines about Bank bailouts, Recovery funds, NAMA and the odd billion here and there dominate the media, these news stories mean nothing in real terms to the people trying to make ends meet, huddled masses grumbling in corners of near empty pubs whilst ‘doleing’ out shrapnel of 10 and 20 cents, to pay for maybe one more pint!
Those in the media and those economic geniuses tell us that people are hoarding their money and squirreling it away, the former Taoiseach warned us against this, and pointed the finger of blame at us for not putting money back into the economy and it seems the current Government doesn’t have too much faith in the plain people of Ireland either as they test the waters for continued austerity. Large swathes of the media gazing out of their ivory portholes, see recovery on every corner, in city centre wine bars, celebrity chef restaurants and Über sophisticated café bars, they don’t seem to frequent the rural and urban working class pubs, bookies and greasy spoons that are empty or closed.
Maybe I hang around in the wrong circles of society, but I don’t know who these people are with their butter mountain like reserves of acorns are. Who I do know, are the people who can’t afford to pay their Mortgages, their Management Fees, their ESB, their Gas bills, their phone bills, their TV bills, their Child Support and Childcare, their Insurance, their Rent, their Loans, their Credit Cards, their Food Bills. The facts of the matter are that there are people who are being hounded by banks on a daily basis to make repayments they are unable to afford, there are county and city sheriffs throughout the country being instructed to recoup goods from peoples homes, there are homes throughout the country, lit by candlelight tonight because the electricity has been disconnected, there are visits from volunteers from St. Vincent De Paul to help those who can’t afford food and bills and rely on the generosity of others, and most of all there are people who can’t take all of this anymore, Irish people who are stretched beyond all belief, depressed, ashamed, afraid and in the most extreme cases, suicidal, primarily due to their financial worries.
So why are these people who didn’t spend excessively, again and again being the ones who are targeted and being focussed in on for ongoing cuts, after being subjected to a call to patriotic duty over the last few budgets. It appears that those who are in financial difficulties are yet again in the firing line for another few budgets of hardship, as they were targeted in previous Budgets, since the economic collapse and meltdown of the Irish economy in 2008. There has been cold comfort from our Government’s since then, most recently with warnings from our Minister for Finance, Michael Noonan, some months ahead of the Budget last December, who said that last years EU deal on bank debt would make no difference to the fiscal calculations, and true to the Ministers word, this is what transpired as the public was hit with yet another austerity fuelled budget.
Even though we’ve been the good little Europeans and we passed the Fiscal Compact Treaty like they told us to, rowed in state expenditure and capital spending, are in the process of further reducing public pay through Croke Park 2 to the chagrin of public servants and sucked up the property tax once the heavies from the Revenue Commissioners were enlisted to deduct the payments from source, it seems the allure of the roulette wheel of fortune at the Austerity Casino is too enticing for this Government to give up in any budget too soon! Even though the liquidation of the IBRC (formerly Anglo Irish Bank) will harvest annual savings of €1 billion euro to the exchequer, it is very unlikely that the savings will be used to ease the burden of the next budget according to jolly old Finance Minister, Michael ‘Ebenezer’ Noonon. The Minister for hardship and widespread burgeoning penury, stated in February that there still remains ‘a significant gap’, between the amount recouped by the Government on an annual basis and that which the Government spends. His coalition partners in Labour, however, are anxious to use these savings to ease measures of austerity imposed on the public in Budget 2014, and as they hover at a PD, Green Party like sub 10% approval rating, the implementation of these of these savings may well be their only way back from electoral annihilation in the next election.
In April it was reported the ‘Irish taxpayer would be in line to get back some of the €32bn they poured into distressed Irish banks’, at the height of our banking crisis, when EU finance ministers agreed to speed up the creation of a banking union that would recapitalise troubled lenders.’ However, at the Economic Ideas Forum in Helsinki on the 7th of this month, the Taoiseach was not as positive on the issue and said it would be a matter of discussion and negotiation “towards the end of the year and into next year”. “We are not in a position to give a date for delivery, that is an issue still up ahead of us in terms of negotiation and discussion.” So, it appears that may be as far as the optimism on this once eagerly expected deal goes, with senior sources in the EU saying that it is becoming increasingly unlikely that any deal on retrospective direct recapitalisation of banks will now happen, due to lobbying and staunch opposition from the bureaucrats and technocrats in Brussels. So where is the leverage the Government promised us they would exert while we held the presidency of the Council of the European Union over the past six months? Just so we haven’t forgotten that our national sovereignty is a keepsake in the bosom of Brussels, it was announced last March that the budget this year, and every subsequent year, will be brought forward to October, on the diktat of the European Commission to ensure it complies with EU law. That’s means austerity will land on your paycheck and in your pocket early this year!
TD’s, Ministers, Top Level Civil Servants, High Ranking Academia (not humble part timers like me!), the Medical Profession and others have no idea of how difficult it is to survive from week to week, so why don’t they truly experience cuts to their massively over inflated pay? Because this is an unequal society, where the marginalized, the pensioners, the unemployed, the low paid and those who did not benefit from the boom are expected to spend money to stimulate the economy and are expected to do so whilst also seeing their income be slashed in the common good. We need to realise that the marginalised are always the ones targeted by the upper echelons in society who will never truly experience poverty and penury! Continuous austerity may to some degree contribute to easing our national debt burden, but at what cost? When the dust settles on nearly a decade of austerity, what kind of society will be left in the wasteland ruins of the homes of the working class, coping class and negative equity generation?
Article by John J. O’Donovan ©
First published:Wed, Jun 19, 2013, 12:25
He said this would be the first step in discussions with his cabinet colleagues about the shape of the budget.
While Labour sources have been emphasising the need to scale back on spending cuts in the next budget Fine Gael Ministers have been ruling out any further income tax increases and stressing the need for tax cuts as soon as possible to ensure the economic recovery continues.
Asked where he stood on implementing tax cuts versus scaling back spending cuts, Minister for the Environment Phil Hogan said this morning: “I’ll tell you, I’m going to leave that now for a matter for a Budget discussion. In the context of our estimates I have a lot of places where I can spend a lot more money like other Ministers.”
The Ministers were speaking ahead of a speech later by Minister for Enterprise and Jobs Richard Bruton in which he will call tax cuts are necessary to sustain economic recovery.
Mr Bruton’s remarks represent a shot across the bows of Labour Ministers who have been calling for a scaling back of spending cuts in line with the country’s improving finances.
Some Labour TDs have called for higher taxes on those earning more than €100,000.
As the Cabinet meets in Dublin for the first substantive discussion on budget options Mr Bruton, the Minister for Enterprise and Jobs, will tell an international audience that ordinary Irish families who have taken so much pain in recent years need to see a reduction in their tax burden.
In a speech to be delivered to the International Labour Organisation in Geneva, as part of his duties under the Irish EU presidency, the Minister will say that Ireland must address the burden of income tax on people with average incomes to create the jobs required to tackle the unemployment crisis.
“For example, a recent report from the Irish Government’s advisory body on industry and competitiveness has shown that the marginal rate of income tax at 52 per cent for employees and 55 per cent for self-employed is higher than in most of our competitor countries,” says Mr Bruton.
“It also kicks in at a much lower level of income. In fact at €32,800 for a single person, the threshold is below the average Irish income,” he adds.
The Minister says tax rates of more than 50 per cent on average incomes did damage to inward investment and entrepreneurship and made too many people question whether they would be better off not working.