book of estimates

bright

According to minister cowen the upcoming budget will be ''fiscally sustainable, economically appropriate, and politically responsible''. the dogs on the street knew that with an election year and all of this talk of abolition of stamp duty it would have been very easy for cowen to produce a publically favourable budget but considering cowen is not planning to add a single cent of tax to cigarettes or other such goods would I be right in assuming that he is merely trying to save face by claiming that this buget is economically responsible while the smoker probably could have takenthe hit to generate extra revenue. is this budget going to be a s economically responsible as he is leading us to belive?

Colonel Sanders

In fairness Brian Cowen seems to have more of a grip on reality than his predessesor, hence a reckless McCreevy like giveaway budget is unlikely. However he is still a politician at the end of the day and will need to do something to satisfy the masses. If the government were serious about smokers quitting cigarettes would be taken out of the CPI or else two rates could be quoted. One excluding tobacco products could be used for pay negotiations etc while another including tobacco could be used as a general indicator. Then the 2 euro or so that the likes of ASH want added to the cost of 20 might be possible. However one must remember that the govt collects substancial revenue from cigarette duty. If duty is increased in 25-50c rises demand for cigarettes will probably stay inelastic, however if there was a huge increase in price it is quite possible that the elasticity of demand would move to be elastic, in which case the govt would lose out financially.