Tag Archives: Budget 2018

From top: Watching Tuesday’s budget speech in a Arnott’s; Vanessa Foran

Accountant Vanessa Foran (her off the telly) writes:

By now you will be already familiar with the main contents of Budget 2018.

I’m just going to mention some key items that got my attention; some contractions, some ironic, one that got my agreeing nod and another that deserves its “are ye taking the piss!”

The Vacant Site Levy isn’t quiet the Revenue Generator the Minister for Finance is telling you. In fact, not a single cent has been earned from it yet since Alan Kelly (yes Labour) came up with it. Of course, it’s worth driving it up even further, since that action doesn’t cost them anything and doesn’t consume resources.

But the levy conditions are so wide it is easy to navigate a work-around. Additionally, most of the Sites on the registrar (and for the site to be subject to this levy, it must already be on the Local Authority Register of Vacant Sites) are increasing in value at a far steeper pace than 4%. Dublin and the surrounding commuting areas are already running ahead with double digit growth values.

This moves me easily on to mention the Commercial Stamp Duty rise, also by 4%; and I am advised, also attaches to the Buy-To-Let Stamp. If this is the case, then it is hardly the incentive to attract more Residential Landlords to commit further investments in the rental sector, or even encourage new Landlords into the business.

Since I am on residential letting; HAP. The Housing Assistance Payment has not delivered any additional units into the Private Rental Sector. Not one. No additional Rentals have been created according to the statistics and data.

Yet your Government is laying another €149 million into HAP. However, if no additional properties are becoming available for qualifying Tenants, it will remain unspent. Maybe this is the plan, a pretend spend to announce in the many responses to the Housing Crisis.

I would add to that and say that there was no new Housing Initiative announced beyond NAMA now advising the Commercial Sector. You can digest that at the Private Sector, and let me record again that I strongly disagree with the Private Sector being the supplier of Social Housing.

The top topic now, even before Brexit, is Social Housing. Yet everything we’ve heard in the last 48 hours was announced weeks ago. That part of your Budget was recycled material that was given a new suit.

By the way; Brexit is getting a €3 billion Management fund. Yet our own Rural Affairs barely saw a €13 Million top up. So your Broadsheet-on-the-Telly friend Johnny Keenan may have to wait a bit longer for some decent broadband.

That might be a familiar and handy dig at the lack of investment outside of Dublin. But you simply cannot promote Rural Relocation as an option to Homeless Families unless there is infrastructure that can be relied on.

The same issue applies to Small Businesses and Start-Ups. If there was any genuine interest in decentralising part of the Dublin based activity and business then perhaps part of that €3 billion should have been allocated to a Rural Affairs led Development Fund.

This pretty much sums up the attitude of this Government to the general public to be honest. I have already remarked my disgust at the labelling of workers on the Industrial Wage and below as “Middle Income Earners.”

These are the Working Poor and not the Squeezed Middle that Campaign for Leo would canvas them as.Continued use of this “Squeezed Middle” allowed this Fine Gael Budget give them pretty much nothing that would enhance their day to days.

Yet the Hotel Industry get to keep their cosy VAT rate of 9%. This is my “are you taking the piss.” I am required to collect VAT from my clients, who are most likely insolvent and or at risk of losing their homes, at 23%. Yet anyone can go away for a Spa Weekend in a 5* and only pay VAT at 9%. There’s one contradiction there. A luxury non-essential service is at 9%. And Insolvency is at 23%.

Additionally, and this may not be public knowledge as it doesn’t get into the press releases and spins, but the Hotel Industry already got a full re-Rating (they now pay reduced Rates) and it wasn’t reversed either in this Budget, despite the obvious fact that this industry is clearly back on its feet.

If I had the means I would engage an Economist to study how much the Hotel Industry got to retain as profits because of their reduced Rates; to actually put a price on how much is being denied to their respective Local Authorities.

One thing to trap from this is that the Hotel Industry must have very good Lobbyists working for them.

Here’s another contradiction; the Budget promoted a 5% Unemployed rate to near full employment over the 12 months. This spells out as a possible Labour Shortage to me and yet Employers PRSI was increased.

This is absurd, and will lead to more Contractor arrangements. USC and PRSI, both EE and ER must be overhauled and rebuilt before it is touched again. Continuing with the current yet historic Social Insurance framework is not working and it is not value-for-money for the taxpayer.

Anyway, steam now vented so onto something which will see tangible benefit over the next 12 months. The additional €75 million into a now rebooted National Treatment Purchase Fund (NTPF.)  As a former Hospital Financial Controller, I know this is a magnificent boost, and I promise ye reading this that the NTPF can make a huge impact into those waiting lists.

Incidentally, this was a Fianna Fáil demand as part of the Confidence & Supply agreement with Fine Gael.

At a budget event yesterday, I learned from Sean Fleming TD that this budget is the first balanced budget in 10 years. But don’t get too confident, there is still a National Debt of €44,000.00 sitting on your head. €44k per head. The 2nd heaviest in the world. We are not in debt as much a Japan, although I’m inclined to envy their indigenous industry profile; Toyota, Honda, Nissan etc.

Fianna Fáil will insist that their Confidence and Supply agreement with this Government is bringing Stability to the country, and it is serving the country well by getting more spend into Services, and less into Tax breaks, which is hardly a secret Fine Gael ambition.

I’m not party to any deals made in Leinster House or their Party Offices, but I will say that this Budget is not a pre-election one.

Tinkering around with a fiver here and there, and not adding anything to the pint is about the height of the populist giveaways. However, it is worth me mentioning that your TDs will get to enjoy their pay rises from January 1st while Social Welfare recipients will be waiting until April.

That behaviour really bugs me as an accountant. Everything included and passed by the Dáil in the 2018 Budget should all commence on the 1st January. The top ups now being earned from Tuesdays Midnight, will all be recorded into this Financial Year 2017.

I will sign off with a note of comfort, my additional 200 EITC will at least be enough cover for my Diet Club Orange and Sunbeds over the next year.

I hope to see ye tonight and feel free to ask questions.

Vanessa Foran is a principal at Recovery Partners. Follow Vanessa on Twitter: @vef_pip

From top: Minister for Finance Paschal Donohoe (centre) at Liam Cosgrave’s funeral last Saturday, Dr Rory Hearne

Tomorrow, Minister for Finance Paschal Donohoe will deliver Budget 2018.

Further to this…

Dr Rory Hearne writes:

In tomorrow’s Budget you will hear talk about ‘what the budget means for you’ and ‘how much will you get back in your pocket’.

You might hear or see the news headlines about how various groups are getting a few euro ‘back’.

You will also hear the big tax accountancy firms (who make massive incomes from advising the rich and corporations on our current tax system) like PricewaterhouseCoopers, provide the Budget analysis and they will state that the Government was confined in what it could do and had little room for manoeuvre given the EU fiscal rules.

But you won’t hear that in fact you would be much better off if the State didn’t cut tax and used it to invest in essential public services like affordable housing and childcare.

You won’t hear that the tax cuts will benefit the higher incomes the most and that there are many other options available to the Government that would provide a more equal society and sustainable economy that they chose to ignore.

You won’t hear much about how the Government’s Budget will actually do nothing (or more likely) worsen our deeply unequal society where we have one of the highest levels of low pay and poverty in Europe and is still struggling to overcome the impacts of austerity and a lost decade of investment in key public services like health and housing.

The presentation of the Budget will focus on Ireland’s growing economy and how we can’t do anything radical that might jeopardise that growth.

But the truth is that, without radical changes, this economy will crash again and inequality is going to continue at its current unacceptable levels.

This society is deeply unequal.

For example, the top 20% in Ireland get five times the income of the bottom 20%. The bottom 20% of our society gets just 8% of income – the top 20% gets 40% of income. The top half get 70% of income – the bottom 50% get just 30%.

We have a huge divide between those reliant on the public health system, waiting for months and years for urgent treatment and assessment, left on A & E trolleys and dying as a result, and those who are wealthy and privileged that can afford to access private treatment.

We have the divide between those who live in wealthy neighbourhoods, the majority of whom live longer and go to university, and those who live with substandard housing, broken playgrounds, the threat of anti-social behaviour, and a minority of whom get to go to third level and die younger.

Our economy and society is deeply divided. And this budget will not address that. We have a generation of people in their twenties and thirties (and many older too) in precarious, short-term and low-paid work and forced to live in expensive and precarious private rental accommodation.

Outward emigration of Irish nationals continued last year – 30,800 Irish nationals emigrated last year – most in employment.

They are leaving a country that has failed to provide them secure and affordable housing and prospects of a decent life, particularly in Dublin.

The Irish economic model has broken for younger generations and those on lower incomes and the poor. Home-ownership dropped from 80% in 1991 to 67% today.

Affordable home ownership is unavailable to a new generation.

A quarter of the population suffer from some form of deprivation – which is over double the 11% rate in 2007. Which shows the lasting impact of the crash and the failure of the recovery to reach many households.

Some of the most social excluded households have been hit hardest. Lone parent households for example have the highest deprivation rate at 57.9%. While those who were not at work due to illness or disability have an extremely high deprivation rate of over 50%.

Women, children, those with a disability or illness, those living in poor disadvantaged communities, Travellers, migrants – these are the most vulnerable groups in society and the ones who suffer the most – yet our system ignores them and deems it acceptable that their rate of poverty and deprivation is significantly worse than the rest of society.

This is a fundamental breach of the human right of these people who have the right to a live with human dignity just as anyone else does.

The truth is our economy is unequal and built on the fragile foundations of Government-supported tax avoidance by corporations.

We are a low taxation and, as a result, a low public spending economy, compared to other European countries.

The state has one of the lowest taxation levels – particularly for corporations, business and the wealthy – in Europe, as a proportion of GDP, and we also have one of the lowest levels of public expenditure as a proportion of GDP in Europe.

Our low tax intake means we have much less than countries such as Denmark and Sweden to spend on public services and support that addresses key issues such as supporting those in poverty (a fifth of our workforce are low paid – one of the highest in Europe – a quarter of our entire population suffer economic deprivation and a third of our children are in deprivation).

With less tax available, we also have less to spend on key areas of social and economic infrastructure such as affordable housing, healthcare, education, transport and childcare. Proposed tax cuts will make this situation worse.

In other countries they have much more public affordable services – such as childcare, healthcare, housing provided by the state or not-for-profit organisations (paid through state support, higher levels of taxation and state regulation of the private market).

But here we have followed much closer to the US, neoliberal, free-market approach to basic necessities – that is we leave it to the private market, the ‘for-profit’ commercial sector to provide much of these public services.

But as they seek to maximise profits it makes them more expensive and less universally available.

We face a major problem in regard to changing things. This is the ‘cosy-consensus’ insider culture in our permanent state (amongst the higher levels of civil service bureaucracy) and successive governments, who have been lead by either Fianna Fail or Fine Gael, who protect themselves and their ‘class’ of the privileged.

They are not prepared to undertake radical measures that would really benefit those who are excluded and suffering.

For example, in housing – the obvious thing to do is to declare a housing emergency, increase by €1bn the funding going to local authorities so they can build 10,000 social houses per year, set up a State company that can build 20,000 affordable rental and ownership homes, and provide private tenants long term security of tenure.

It wouldn’t require raising taxes on ordinary people to do this – it could be financed by State borrowing, taking some of the Apple 13bn tax, using NAMA land and cash reserves, a high vacant site land tax, from the pension fund, a wealth tax, using the AIB and credit union funding, getting flexibility from the EU fiscal rules – clearly a lot of areas of potential funding.

But they won’t do it because it would lead to reduced rent and house prices – affecting the profits of the ‘property-financial’ industry complex – the vulture funds, the real estate investors, the landlords, the developers and land hoarders.

People on the ‘inside’.

So we won’t see major change until those in power are forced to change – by citizen’s action and by an alternative government that is actually prepared to do something radical – like implement a right to housing and health for all.

Why would the Government politicians change things?

They didn’t (and don’t) feel the pain of austerity, the stress of waiting for hospital treatment nor the trauma of being homeless or the constant anxiety of wondering how you will pay next month’s childcare, child’s birthday party, doctor, rent, mortgage or food bill?

Dr Rory Hearne is a policy analyst, academic, social justice campaigner. He writes here in a personal capacity. Follow Rory on Twitter: @roryhearne

Leah Farrell/Rollingnews

Brendan Howlin

This afternoon.

Labour Party leader Brendan Howlin outlines his party’s alternative proposals for Budget 2018.

“The future facing our country today is very different than it was five years ago. Our economy has recovered, strong growth continues and unemployment is falling.

But there are also many people around the country who are still hurting, and struggling to put food on the table for their families.

With our country now at a crossroads, Labour’s Alternative Budget seeks to cut poverty, not taxes.

We want to improve public services, build homes and hospitals, employ teachers and healthcare workers, and reduce the cost of living for our future Ireland.

One of the most pressing issues facing us as a nation is the housing and homelessness crisis, and Labour’s Budget includes a fully costed plan to invest nearly one billion euro into building an extra five thousand public houses in 2018.

In the key area of health, we are also committing to funding Sláintecare [a 10 year plan to revolutionise the health service  with cross-party political support]. – a plan that must be delivered upon by Government.

“This document [at link below] presents a vision for our future and shows that Budgets can be drawn up in a way that will promote decency, justice and equality in our society.”

FIGHT!

Our Future- Labour’s Alternative Budget 2018 (Labour)

Rollingnews



This morning.

The Davenport Hotel, Dublin 2

The launch of Sinn Féin’s alternative budget proposals . To wit:

Sinn Féin has proposed €2 billion worth of tax increases, from increasing the special VAT rate for hotels to a 7 per cent levy on incomes above €100,000, in its alternative budget.

….increases include a second home tax of €400; increasing the VAT rate for hotels from 9 per cent back to 13.5 per cent ; increases in betting tax and the bank levy; a rise in commercial stamp duty from 2 per cent to 4 per cent as well as an extra 5.75 per cent rate on employers PRSI on salaries of over €100,000…

Top, from left: Sinn Fein Finance spokesperson Pearse Doherty with Deputy Leader Mary Lou McDonald and Party President Gerry Adams .

Sinn Féin proposes €400 second home tax, 7% levy on incomes above €100,000 (irish Times)

Rollingnews