Budget 2013

[odlum833]

Budget day next Wednesday.

Government is looking at a €3.5bn adjustment for next year to bring the overall deficit down to around 7% (maybe lower depending on whether revenue out performance is maintained to year end). €2.5bn in cuts and €1bn in new taxes including a property tax.


There have been leaks to the media -

* A €10-a-month cut in child benefit, which will drop from €140 to €130.

* A cut to the time for which non-means-tested dole is paid from 12 months to nine months.

* A doubling of the 50 cent charge that medical card holders pay for medicines and other items that they get on prescription from pharmacies, up to a maximum of 10 items per month.

And further details have emerged about the property tax, which will come into effect next year, following yesterday's revelations of the plan in the Irish Independent.

* Elderly people will be given the chance to pay the property tax on their home from beyond the grave

* People living in council houses are expected to be hit with higher rents – with rises of €1 or €2 a week to bring in €50-€100 a year per house.

http://www.independent.ie/national-n...d-3310704.html

It looks like the property tax will be 0.25% of your home's value.

Do you think the government is getting the mix between spending cuts and tax increases right? And what are you least looking forward to out of the budget?

My own point of view is that I would prefer to see a greater ratio of spending cuts to tax increases. I think the public sector should be hit harder than it is being hit. But that's my opinion. I don't work in the public sector but i'd say they have another point of view.

[richiek83]

Originally Posted by odlum833

Budget day next Wednesday.

Government is looking at a €3.5bn adjustment for next year to bring the overall deficit down to around 7% (maybe lower depending on whether revenue out performance is maintained to year end). €2.5bn in cuts and €1bn in new taxes including a property tax.


There have been leaks to the media -




http://www.independent.ie/national-n...d-3310704.html

It looks like the property tax will be 0.25% of your home's value.

Do you think the government is getting the mix between spending cuts and tax increases right? And what are you least looking forward to out of the budget?

My own point of view is that I would prefer to see a greater ratio of spending cuts to tax increases. I think the public sector should be hit harder than it is being hit. But that's my opinion. I don't work in the public sector but i'd say they have another point of view.

I agree with you Odlum. I would prefer to see an higher ratio of spending cuts including cuts in pay in the PS. I'm a Civil Servant myself but I would rather see pay cut than seeing the Carers Allowance being cut for example. I would also rather see more being spent on Capital Infrastructure especially in the Dublin Area. This is not going to happen however. My ultimate feeling is that once this Croke Park Deal expires, we will be into a whole new ball game with regards to the PS pay bill and other productivity measures. USC will probably increase, indirect taxes will go up except for VAT. Child benefit will likely be cut by some €5-€6 and not the €10 as has been rumoured.

I think Road Tax will go up along with Carbon Tax. The propery tax will also be announced and the 0.2% rate rumoured will more than likely be right.

Tough times ahead. This will ensure domestic demand remains subdued. If only they could implement similar policies to the late 80's where cuts were made to spending but cuts were also made to income taxes.

[Rapter]

Will the household charge remain on top on the property tax?

[richiek83]

Originally Posted by Rapter

Will the household charge remain on top on the property tax?

It is my understanding Rapter that it will replace the household charge.

[odlum833]

Originally Posted by richiek83

Tough times ahead. This will ensure domestic demand remains subdued. If only they could implement similar policies to the late 80's where cuts were made to spending but cuts were also made to income taxes.

It always annoys me when I hear a teacher, for example, (very well paid by comparison to their EU counterparts) giving out about cuts in frontline education. Or the more galling ones who say "if you cut my pay the student suffers". Frontline services would not have to be cut if they took more wage cuts which I believe they can well afford in reality instead of the poor mouth waffle you hear from their union bosses. 80% of the education budget is wages.

If they all took another 15% cut across the board all frontline services could be easily protected i'd imagine. Same with every state sector.

There is also the pensioners. Nobody wants to take from the elderly but it has to be said they have not taken their fair share of adjustment. In fact aside from the medicine charge (50c!) they have taken no adjustment. This is hardly fair. And yet again the state pension, according to the media, is going to remain untouched.

Most elderly don't have large expenses, they have medical cards. They don't have mortgages.

[nordisk celt83]

What I continue to be perplexed by is the lack of stimulus and capital spending in the economy. Seriously, why can't more state assets, like the lottery, terminal 1 etc. be sold off?? The revenues could then obviously be used to create much needed jobs and greater domestic demand.

And, why isn't the now depleted Pensions Reserve Fund used to help get us over this prolonged rough patch. Surely it's original purpose is essentially defunct at this stage!!!.

[nordisk celt83]

As regard to cuts and taxes, would rather see a more balanced approach where the better off bear the brunt of the pain.

Cutting childrens' allowance for subsequent children and taxing it for the better off seems like a no-brainer!!!

Cutting teachers' and nurses' salaries is not the way to go. The teaching profession is already being ruined by lower salaries and sporadic unemployment for the younger generation within the education sector.

Civil Servants earning over 100k and large pensions should be targeted for cuts once the CP agreement is obsolete.

[nordisk celt83]

Two thoughts that came to me recently were cutting the subsidy given to C.I.E for OAPS getting free travel, not actually getting rid of free travel in itself though.

Also, what's the deal with medical cards??? I remember hearing something crazy like a GP gets €700 p.a for each medical card holder that registers with their surgery. (is this true?) The average non-medical card holder only visits the GP less than once a year at a rate of €50-70. This should definitely be cut big time, as 40-50% of the population have a medical card, this is obviously a huge expenditure that is lining the pockets of well-healed doctors!!!

The consultants also need a good chop in their salaries!!!

[nordisk celt83]

One last thing... Fully welcome the property tax. It will benefit Dublin and the East Coast in the long run.

Hopefully we don't get another populist FF idiot, like Jack Lynch, getting rid of it again for a few votes, in a decade or two!!!

[Dvblvnia]

Another thing which needs to be looked at is the number of tax incentives and breaks awarded to lots of different activities and sectors. We could probably reap a billion or two from abolishing ones which either don't make an economic impact, are socially undesirable and have outlived their usefulness. We also need to have a bonfire of the quangos. We have about 1,000 state agencies, boards, authorities etc. many of which could be scrapped, amalgamated or absorbed into government departments. About 100 should be abolished so as to save a few hundred million. Local government reform also needs to be advanced with the abolition of town councils, reductions in county managers' salaries and changes to procurement etc. so as to save a few hundred million more. Public and civil service pay is also ridiculous, as posters above have mentioned. How can we continue to afford paying them far above the EU average when we are one of four EU countries in the loan programme? Benchmarking PS and CS pay at 100% of the EU average plus a 15% cost-of-living allowance would save even more hundreds of millions. Property taxes and water charges can also raise over a billion euro and provide local authorities with a new and reliable source of revenue. This can encourage them to reduce business rates which are one of the main obstacles to growth for many small and medium-sized companies.

Do all the above and you can save somewhere in the region of €5 billion.

[odlum833]

Property tax likely to be 0.2% of house value according to the Irish Times today. That's about 300 euro per property per year average.

[god]

Originally Posted by odlum833

... to bring the overall deficit down to around 7%...

Rather 8.9%. See page 3(5) of this document: http://www.finance.gov.ie/documents/...epaper2013.pdf
Also official documents say that similar to 2013 budget adjustments will have to be done in 2014, and 2015 budgets. That's over 9bn euros versus 2012 budget, which makes ~2.5k per year per adult person.

[odlum833]

Originally Posted by god

Rather 8.9%. See page 3(5) of this document: http://www.finance.gov.ie/documents/...epaper2013.pdf
Also official documents say that similar to 2013 budget adjustments will have to be done in 2014, and 2015 budgets. That's over 9bn euros versus 2012 budget, which makes ~2.5k per year per adult person.

No, the budget deficit this year will be 8.2%. Well within the target of 8.6%. The budget deficit next year will be 7%.

http://www.rte.ie/news/2012/1201/bud...ite-paper.html

Without any adjustments the budget deficit would be 8.9%.

[thebig C]

Still digesting the Budget....first impressions....steady as she goes.

Not as harsh as predicted and indeed had some fairly positive measures for SMEs/R&D etc. Also, there was the announcment of an extremely important Taxation agreement with the United States which should help FDI.

C

[richiek83]

Originally Posted by thebig C

Still digesting the Budget....first impressions....steady as she goes.

Not as harsh as predicted and indeed had some fairly positive measures for SMEs/R&D etc. Also, there was the announcment of an extremely important Taxation agreement with the United States which should help FDI.

C

C[/QUOTE]

Hidden nuggets in there. DIRT gone up to 33%. Obviously trying to get people to save less and spend a bit more. PRSI will now also be included in non earned income such as rent income and on the interest on savings and deposits. The self employed have also seen hikes in their tax (think it is either PRSI or USC) to over €500. Rules them out of trying to create more jobs, 0.18% property tax also which is what was expected really. Not as bad as maybe predicted. No support measures yet again for the Lower middle income worker

[Rapter]

I'm surprised they haven't increased road taxes, I'd say they definitely will do it in the 2014 budget for sure...

EDIT: oh wait...

Budget 2013: Motor tax costs rise by up to 25 per cent

THE COST OF taxing a car will increase by up to 25 per cent next year, depending on the age and emissions standards of the car, under measures unveiled this afternoon.

The proposals under Budget 2013 will see an across-the-board increase of 7.5 per cent on cars registered before 2008 – meaning cars with a 2-litre engine will see the annual tax bill jump from €660 to €710.

A more modest 1.4-litre car, meanwhile, will increase from €358 to €385. The smallest cars with a 1-litre engine will go from €278 to €289.

The increases are more steep for newer cars, which are taxed based on their emissions rather than their engine capacity.

The steepest jump will come for owners of cars emitting between 110g and 120g of carbon dioxide per kilometre of travel.

Their annual motor tax bill will jump by 25 per cent, from €160 to €200 per month.

In pure monetary terms, cars with higher emissions will continue to see their tax bill go up and up – with the least eco-friendly cars seeing an increase of €92 a year.

However, the owners of cars with lower or no emissions will see their tax bills fall. Emission-free cars bought since 2008, or electric cars bought before then, will see their tax fall by almost a quarter, to a flat rate of €120 per year.

Separately, the Vehicle Registration Tax paid on new cars - which is also calculated based on the car’s emissions – will go up slightly, with a segregation of the previous bands from seven to eleven.

So wait a minute, the cars which are registered after the second half of 2008, which have the annual road tax of 225, it doesn't write anything about them, will they remain the same?

[thebig C]

Originally Posted by richiek83

C

Hidden nuggets in there. DIRT gone up to 33%. Obviously trying to get people to save less and spend a bit more. PRSI will now also be included in non earned income such as rent income and on the interest on savings and deposits. The self employed have also seen hikes in their tax (think it is either PRSI or USC) to over €500. Rules them out of trying to create more jobs, 0.18% property tax also which is what was expected really. Not as bad as maybe predicted. No support measures yet again for the Lower middle income worker[/QUOTE]

I think the PRSI is the increase which will really be felt. I was talking to my sister, who is self-employed, and she reckons the increase in PRSI for them will entitle them to some benefits.....they have none atm.

[odlum833]

I thought it was a good budget overall. Not as burdening as many thought. Yes some things were cut but as said it steady as she goes. I am very impressed with Ireland's capacity to adjust. Some countries would give their right arm for the cohesion there seems to be.

Our near neighbors are facing cuts. I guarantee there will be uproar on the streets when the true scale becomes clear. But here there is a feeling of getting on with it and that's invaluable despite the problems it incurs in the short term. In the long term we will be a better country.