Budget Day - How empty is the cupboard?

mike65

The shortfall in the current account is going to be about 1.7 billion, the states GDI is about 160 billion so its not that big a deal.

Trouble is, while the government could easily make the case for a spot of intelligent borrowing, its got the perfect chance to scare us in a mild way, into accepting a relative hairshirt budget as being a pragmatic necessity. So I'm expecting a freeze in tax-bands, proberly a modest hike in the reliables esp fuel. Little change beyond inflation adjustment for dole, pensions, child allowence etc.

It won't matter if the budget is seen as harsh as by the next election it'll have been forgotten and the public finances will almost certainly be in better shape anyway.

Mike.

jmayo

mike65 wrote: »

The shortfall in the current account is going to be about 1.7 billion, the states GDI is about 160 billion so its not that big a deal.
....
It won't matter if the budget is seen as harsh as by the next election it'll have been forgotten and the public finances will almost certainly be in better shape anyway.

Mike.

Why do you believe that the public finances will be in better shape by the next election ?
Do you see residential construction and house prices going back up to the crazy levels of a year ago, thus meaning the tax contribution from construction and housing will be back up to last years level ?
Do you see an influx of new industries to take advantage of our increasing competiveness :rolleyes:
Or maybe the public service/sector will take a tax cut and redundancies to make it's budgetary cost less?
I can't see any of the above happening.
Actually I see the reverse happening so that the public finances will be in even worse state by next election. The tax take from construction and housing will drop even more, the public sector with all their benchmarking demands will take an even bigger chunk of the public finances and we will lose even more industry over the coming years.

But then again I am just a moaning cynic according to Bertie :rolleyes:

mox54

Our current administration are a bunch of amateurs run by senior civil servants and industry fat cats!!, they have wasted an onscene amount of money and made poor investments all over the place....ask yourself...why wasn't the red cow done up the way it is now at the start!!, because they're idiots and amateurs and who cares anyway, the money is there to throw around and make mistakes!, not anymore and come 4 pm we'll all be a little poorer because of their !!!!!!!!.

The hard times are on the way and watch the Government fall flat on it's face, HOPEFULLY!!.

Colonel Sanders

Will more tax really be levied on fuel? Increasing oil prices have already pushed prices up at the pumps, such a move would be incredibly unpopular. However as already stated the next election is a long way away and Irish people seem to have political memories of tadpoles.

The price of cigarettes will surely increase and maybe alcohol too (altho with vintners whining about falling levels of business will the publican party really want this)

sovtek

Colonel Sanders wrote: »

Will more tax really be levied on fuel? Increasing oil prices have already pushed prices up at the pumps, such a move would be incredibly unpopular.

Like pay hikes for the political elite, tax on credit cards/ATM's, Bin tax, tax on immigrants (ok well we can't vote until we get citizenship but the latter are growing in numbers and may not have such a short memory) etc etc.

However as already stated the next election is a long way away and Irish people seem to have political memories of tadpoles.

You have a point although the last election was during the "good times". What's puzzles me is that everyone (broad stroke I admit) seems to think that civic participation seems to stop at voting every several years. There are ways to influence government outside of an election (although its limited). If people start taking to the streets things might be a little different. What's wrong with a little chaos every once in a while.
I'm struck by the severe difference in the standard of living on the Continent and how their governments seem to be scared of the people...the total opposite of here. The Germans and the French go mad at the slightest suggestion of corruption amongst the politicians.

The price of cigarettes will surely increase and maybe alcohol too (altho with vintners whining about falling levels of business will the publican party really want this)

Yeah and all the publicans will just raise their prices to keep the %100+ profit margin on drink and cigs.

seamus

Watch the lower band tax rate go up 1%. They'll tax the worker on the street no bother, but when it comes to the higher-band white-collar worker (i.e. the voter), they won't dare go back on their promise. That should bring at least half a billion back into the coffers.

Cigs, Alcohol and petrol will go up, that's a given.

Mortgage interest relief will go up as they attempt to interfere in the plummetting property market, however the stamp duty bands will change to try offset this - the bands'll move upwards, but so will the rates. This will be a vain attempt to convince people to buy new homes (bailing the property developers out of it).

VRT won't move. It's a cash cow for the Government and the volume of new cars being bought is still high. If new car sales drop and second hand sales go up, then they may begin to drop VRT rates.

There may be a drop in corporation tax to try increase our competitiveness.

mike65

Seamus the VRT is going to be calulated on a new "green" basis so there will be changes (unless Biffo chooses not to announce anything today). Income tax rates won't change, they just won't widen the standard rate band so people will get taxed at 41% rate a bit quicker. Tax credits will go up a bit.

Don't see any change on stamp-duty.

Mike.

Hitchhiker's Guide to...

seamus wrote: »

Watch the lower band tax rate go up 1%. They'll tax the worker on the street no bother, but when it comes to the higher-band white-collar worker (i.e. the voter), they won't dare go back on their promise. That should bring at least half a billion back into the coffers.

lol - no way the lower rate tax will go up

kluivert

Is there a specfic budget forum or will this be the trend. Am actually looking forward to the Budget this year, so I can tell everyone I told you so.

Fianna Fail - a bunch of crooks.

Its very simple economics and our great Irish Government have blown it for us. Harvest while the sun shines is certainly what they done.

There are alot of thick professioanls out there. For example, Brokers believe that reducing stamp duty will assist the housing market, it had no effect back in April, why would it work now, why wont it work, because to all you brokers, its simple economics, a housing market is driven by first time buyers, majority of first time buyers including myself are purchasing either new houses with no stamp duty or second hand houses where the value of the house is less than 315k, o wait there is no stamp duty for first time buyers now at all. So makes no difference. So called professionals.

Housing market will only be relieved by a big decrease in interest rates and a deduction in the credit craunch which the Fianna Fail crowns have no power over.

Watch how there will be marginal increase in captial investment for the next year.

Watch how there will be inflationary increases in Social Welfare payments.

Watch how the gap between poor and rich widen once again.

Watch how Fianna Fail put their sticky hands in your pockets and laugh at you behind your back.

I will be listening to the budget over the next couple of hours carefully because this is the budget that will make or break the economy of this country.

Bertie Ahern and Brian Cowen, well done boys, time to sweat.

sovtek

kluivert wrote: »

There are alot of thick professioanls out there. For example, Brokers believe that reducing stamp duty will assist the housing market, it had no effect back in April, why would it work now, why wont it work, because to all you brokers, its simple economics, a housing market is driven by first time buyers, majority of first time buyers including myself are purchasing either new houses with no stamp duty or second hand houses where the value of the house is less than 315k, o wait there is no stamp duty for first time buyers now at all. So makes no difference. So called professionals.

Not so fast. If they drop stamp duty then they can increase their profit margin. It doesn't mean that prices will come down, only that the margins increase. It's like the publican jackals asking for a reduction in alcohol tax. It won't mean cheaper drink, only more profit for the criminal cartel.
I don't think they are thick...just greedy and corrupt.

Hitchhiker's Guide to...

kluivert wrote: »

Is there a specfic budget forum or will this be the trend. Am actually looking forward to the Budget this year, so I can tell everyone I told you so.

Fianna Fail - a bunch of crooks.

Its very simple economics and our great Irish Government have blown it for us. Harvest while the sun shines is certainly what they done.

There are alot of thick professioanls out there. For example, Brokers believe that reducing stamp duty will assist the housing market, it had no effect back in April, why would it work now, why wont it work, because to all you brokers, its simple economics, a housing market is driven by first time buyers, majority of first time buyers including myself are purchasing either new houses with no stamp duty or second hand houses where the value of the house is less than 315k, o wait there is no stamp duty for first time buyers now at all. So makes no difference. So called professionals.

Housing market will only be relieved by a big decrease in interest rates and a deduction in the credit craunch which the Fianna Fail crowns have no power over.

Watch how there will be marginal increase in captial investment for the next year.

Watch how there will be inflationary increases in Social Welfare payments.

Watch how the gap between poor and rich widen once again.

Watch how Fianna Fail put their sticky hands in your pockets and laugh at you behind your back.

I will be listening to the budget over the next couple of hours carefully because this is the budget that will make or break the economy of this country.

Bertie Ahern and Brian Cowen, well done boys, time to sweat.

woo-hoo for the rant!

It's almost possible to forget that we're one of the richest countries in the world

All politicians are the same, and they have very little impact over the economy which is broadly based on international economic trends.

kluivert

Roundtower2 wrote: »

woo-hoo for the rant!

It's almost possible to forget that we're one of the richest countries in the world

All politicians are the same, and they have very little impact over the economy which is broadly based on international economic trends.

Sorry it was susposed to be brief

Here listening to Radio 1 on my phone.

seanabc

It's starting in 10 minutes. I'm listening to the warm-up act on Newstalk.

Thank God I don't smoke anymore. I used to really dread this time of year!

mike65

Jasus get on with it. Listing water projects should be the job of the minister for environment.

Mike.

roughan

anyone heard if they are increasing the VAT threshold like they did last year?

Quality

Maternity benefit surely they can do better than €280 a week????


And a couple of days paternity leave for the daddys.....

mike65

VRT! Changes are as expected from July 1st. Co2 rating with 7 bands like white goods system 14-36%. Broadly revenue neutral he says. We'll see. VRT free hybrids? Or did I miss that?

Annual motor-tax up by 9 and 11% from Jan 1st (2500cc cut off). Then tax linked to CO2 from July.

Mike.

seanabc

VRT will be based on CO2 emissions rather than engine size from 1st July.

Quality

Car tax up by 9% 2 litre and under and 11% 2 litre +

death1234567

Quality wrote: »

Car tax up by 9% 2 litre and under and 11% 2 litre +

Bollocks monkey. Worst budget ever!

mike65

700 million capital programme for health.

30c increase in fags from midnight.

Mike.

seanabc

As I said earlier: Thank God I don't smoke anymore!

mike65

Income tax

Standard rate - unchanged and widened by 1400 pa (surprised tbh)
Higher rate - no mention
Credits up 70 single/140 married

Sec 481 relief continues.

Stamp duty cuts on plastic cash paid for by more expensive cheques!

Mortgage interest relief increased by 20% (I think)

Mike.

Colonel Sanders

mike65 wrote: »

Income tax

Standard rate - unchanged and widened by 1400 pa (surprised tbh)...

Stamp duty cuts on plastic cash paid by more expensive cheques!

Mike.

Both are surprising, the tax on credit/laser cards is unpopular but is a sneaky tax, like the insurance levy, that not many people spend too much time pondering. When they pay it once a year they give out, then forget about it in a weeks time.

mike65

Ooooh stamp duty changes. A banding system to be introduced starting at 4% (?)

Mike.

seamus

Looks like the existing exemptions still apply, but the first €125k of any purchase under €1m has no stamp duty, and the rest has duty at 7%.

Interesting.

seamus

seamus wrote: »

Looks like the existing exemptions still apply, but the first €125k of any purchase under €1m has no stamp duty, and the rest has duty at 7%.

Interesting.

So doing the maths on a €400 k purchase the new"over all" stamp duty rate on the "entire purchase price" there would be 4.81% ?

Trotter

I sell my old smokey car to buy a tiny, fuel efficient supermini with a CO2 emission equivalent to a fairy's fart...

What do I get in reward for being environmentally aware?

A rise in car tax by 9%.

I am so buying a landcruiser and everytime I rev it I'll give two fingers to those windy gutless Greens.

mike65

The new "greener" annual motor tax will be introduced from July 1st.

Mike.

Akrasia

mike65 wrote: »

The new "greener" annual motor tax will be introduced from July 1st.

Mike.

Todays budget was based on projected growth figures of 3%. We'll be lucky to get half of that. Guess what programs are going to be cut back come next autumn when our deficit is way up and tax take right down? that's right, the social programs.

Hitchhiker's Guide to...

Akrasia wrote: »

Todays budget was based on projected growth figures of 3%. We'll be lucky to get half of that. Guess what programs are going to be cut back come next autumn when our deficit is way up and tax take right down? that's right, the social programs.

lol - love the armchair economics. Are you coming up with the estimate that growth will be half the 3% based on any particular economics model? 3% is about consensus amongst actual economists who study growth rates.

Akrasia

Roundtower2 wrote: »

lol - love the armchair economics. Are you coming up with the estimate that growth will be half the 3% based on any particular economics model? 3% is about consensus amongst actual economists who study growth rates.

not really. Cowen et al are over optimistic about the global and national economy. I'm taking their predictions and cutting them.

I second the lol..

miju

Roundtower2 wrote: »

lol - love the armchair economics. Are you coming up with the estimate that growth will be half the 3% based on any particular economics model? 3% is about consensus amongst actual economists who study growth rates.

would these be the same economists who predicted house prices to rise by approx 8% in 2007 based on previous growth rates?

going on current growth rates compared with jan 2007 predictions to where they are now I'd say Akrasia is about right

Uhm who predicted house prices to rise 8% miju? and more importantly when did they make such predictions? Oh and what percentage of the economy is house building?

miju

Tristrame wrote: »

Uhm who predicted house prices to rise 8% miju? and more importantly when did they make such predictions? Oh and what percentage of the economy is house building?

Well to be more precise the figures quoted ranged rom 6% to 8% depending on the economist but a quick google throws up an example of the greatly revered economist Austin Hughes though he's an easy example as he changes his predictions every week. Theres actually a thread over on thepropertypin.com thats recorded various chief economists "predictions" over the last year and a bit.

Austin Hughes wrote:

According to the IIB report 'Irish housing market outlook 2006/7', house prices will increase by 13% this year and 7% next year.

Article Here think that was around Sept 2006

Haven't got the figure for percentage of economy but I think most would agree that the economy is over reliant on construction (which is where the nice big hole in this years budget came from due to the downturn). Though IIRC for every 10,000 less houses built in a year it knocks approx 1% off our GDP or thereabouts.

miju

miju wrote: »

Well to be more precise the figures quoted ranged rom 6% to 8% depending on the economist but a quick google throws up an example of the greatly revered economist Austin Hughes though he's an easy example as he changes his predictions every week. Theres actually a thread over on thepropertypin.com thats recorded various chief economists "predictions" over the last year and a bit.

Ah back in 2006,those halcien days when there was no speculation on stamp duty ( a Huge factor in slowing decisions on house purchases ) and no fore seeable credit crunch.Obviously house prices couldn't continue rising,that would be an impossibility.It had to stop or slow somewhere or re adjust to reality.
Predictions made now for the housing sector are in the light of both of those.

Haven't got the figure for percentage of economy but I think most would agree that the economy is over reliant on construction (which is where the nice big hole in this years budget came from due to the downturn). Though IIRC for every 10,000 less houses built in a year it knocks approx 1% off our GDP or thereabouts.

About 10 to 15% iirc which would tend to suggest the emphasis on it being such a vital sector is over rated.It would want to collapse altogether for any serious impact and I think we could both agree thats not likely.

ven0m

Budget was a joke! It was nothing more than an exercise of sleight of hand .... we'll give you money in this hand (tax credits increase, card stamp duty) & take it back off you in the other hand (motor tax, fags)

I worked out that personally with the tax credit increases I am 0.5% better off, while that arrogant b*****d who calls himself Taoiseach is 11% better off with his fatcat payrise when the country is in a sh*te; healthcare, roads, carbon emissions.

If they were SERIOUS about carbon emissions, road tax on private cars would be exempt, & instead a levy put against fuel; the more you use, the more you contribute to carbon emissions, the more you pay ..... simple ... this was nothin more than a cynical smash-and-grab of the average person's pockets ..... even the increases for child welfare (not that I have any kids!) was a disgrace ... it will only push people back out of the workforce with increasing childminding costs in ireland ......

Yes, I'm whinging & moaning & there's f**k all I can do about our government (apart from not vote for them) - but peole in this country are so apathetic to when it comes time to vote, that frankly - we all really get what we deservee cos so many lazy b*****ds don't bother their arse to get up, go out & vote.......



/END_RANT



:::: ven0mous ::::

mike65

Biffo was just talking about excise duty on fuel and said no due to its inflationary impact (which would be very big in year one, current inflation is 5%).

Mike.

ven0m

mike65 wrote: »

Biffo was just talking about excise duty on fuel and said no due to its inflationary impact (which would be very big in year one, current inflation is 5%).

Mike.

Inflation 5%, average person better off by 0.5% ........ so how does Biffo figure he's helping the economy with the majority of people in this situation ...... it's not .... and don't get me started on "Gormley" ....... his party are the biggest hypocrits in the government ..........

"green" my hole!!!!!!! case in point, NONE of their election flyers were printed on recycled paper, & their posters they put up were on non-bio-degradable plastic using non-bio-degradable plastic cable ties, which is made from petroleum by-products - of whose production contributes to green house gases & carbon emissions ...... yet I never once saw a motion from them to ban these kind of posters on the grounds of them not being "green" or "carbon friendly" ....... I asked a green candidate at my door around election time about it, who slammed my own sliding door closed on me & walked away ..... I won't name name, but he represents kildare north ;-) He did this on a few people in the area who tackled him about it ........


:::: ven0mous ::::

sovtek

mike65 wrote: »

Credits up 70 single/140 married

Crap I'm about to get divorced. Oh well it'll be worth it.

Stark

ven0m wrote: »

Budget was a joke! It was nothing more than an exercise of sleight of hand .... we'll give you money in this hand (tax credits increase, card stamp duty) & take it back off you in the other hand (motor tax, fags)

Well they can't just print off money and give it to you. All they can decide is what limited resources go where. I would consider things like owning a car and cigarettes to be "luxury" items. By putting more tax on these, we have more money to take people on poorer incomes out of the tax net, thus delivering a "fairer" Budget imo.

ven0m

Stark wrote: »

Well they can't just print off money and give it to you. All they can decide is what limited resources go where. I would consider things like owning a car and cigarettes to be "luxury" items. By putting more tax on these, we have more money to take people on poorer incomes out of the tax net, thus delivering a "fairer" Budget imo.

"Fair" would be the government doing a u-turn on their big pay increases & public sector pay increases, & also a u-turn on the 32million about to be forked over to those jokers in the GAA for their "county players" ..... that's money in both cases better spent on the HSE ...... approx. 64 million euros buys alot of medical equipment ........ so you tell me what's truly fair .... the rest of us have to tighten belts but the government don't have to? That sounds like facism to me ......


Also, the majority of smokers in ireland ARE in the poor bracket ....... so do the maths on that one .....

This is a government that hasn't a clue - no mention of extra money for mental health services either even though it's the biggest growing area of concern for the HSE, which is becoming a bigger international problem also ........



:::: ven0mous ::::

seamus

ven0m wrote: »

"Fair" would be the government doing a u-turn on their big pay increases & public sector pay increases, & also a u-turn on the 32million about to be forked over to those jokers in the GAA for their "county players" ..... that's money in both cases better spent on the HSE ...... approx. 64 million euros buys alot of medical equipment ........ so you tell me what's truly fair .... the rest of us have to tighten belts but the government don't have to? That sounds like facism to me ......

The problems in the health service have little to do with the amount of money given and everything to do with the amount of money spent. No matter how much money you give the HSE, it will be spent with very little return. Consultants and management have the whole thing sown up tight. Until we break them, money is irrelevant.

Also, the majority of smokers in ireland ARE in the poor bracket ....... so do the maths on that one .....

Stop smoking == less poverty?
Seriously though, nobody is forcing anybody to smoke. How can you say that a tax on cigarettes is unfair on the poor? That's like saying that a tax on ivory backscratchers is unfair on the rich. Cigarettes are 100% luxury items. If you can't afford them, stop smoking them.

Tax will *always* impact the poorest people first, no matter where you apply it. Increase the higher band tax rate, and the cost of doing business goes up, impacting the poorest most. That's the nature of taxation.

mike65

Smokers get what they deserve as apparently do car owners now.

Mike.

ven0m

seamus wrote: »

The problems in the health service have little to do with the amount of money given and everything to do with the amount of money spent. No matter how much money you give the HSE, it will be spent with very little return. Consultants and management have the whole thing sown up tight. Until we break them, money is irrelevant.
Stop smoking == less poverty?
Seriously though, nobody is forcing anybody to smoke. How can you say that a tax on cigarettes is unfair on the poor? That's like saying that a tax on ivory backscratchers is unfair on the rich. Cigarettes are 100% luxury items. If you can't afford them, stop smoking them.

Tax will *always* impact the poorest people first, no matter where you apply it. Increase the higher band tax rate, and the cost of doing business goes up, impacting the poorest most. That's the nature of taxation.

What is it with boardies reading into things that aren't there ....... sheeesssshhh

Smoking is more predominant through the poorer levels of society, & instead of being a more socially responsible government and going on a drive aimed towards these people, they instead take more money off them. Yes smoking is a choice, so is living ... so what ..... the simple fact is that it is David-Copperfield-style-economics being bandied by a government with no balls. If you want people stopping smoking, ban the sale of them altogether.

In relation to the stuff with consultants - again, you're glossing over the facts when this thread is about the budget .... money is going to the wrong areas in any case. I will veer off slgihtly (so apologies).

The institutions looking after mental health are woefully underfunded, and little is being done to address it. Even money for machines, 64 million euros would replace a number of cancer check machines. Yes I'm aware of the blah blah about people who manage the HSE - but again, that comes down to this government & its continued trouserless approach to management where apparently no-one is responsible for everything ........
leaders are responsible for troops .... beginning, middle & end of.

This is a sham budget, which is a contradiction to election promises made by the majority party in government who knew full well the state of irish finances at the election time, and it is a budget that does nothing to help the weak & vulnerable in our society as the biffo claimed ....... it'll be the last time Fianna Fail ever get a vote from me or many others I know, or the last time I ever do work for them on their behalf at grassroots ........


:::: ven0mous ::::

seamus

ven0m wrote: »

If you want people stopping smoking, ban the sale of them altogether.

Then where would you get the money from?

That smoking still exists in 30% (?) of the population means that you can't just stop selling it. It brings in a lot of money for the Government. They know that smoking puts a massive strain on the health services, but they're not interested in eradicating it overnight. You couldn't remove that amount of money in one fell swoop, much like you couldn't remove VRT or Stamp Duty in one go.

That poor people smoke more I think is irrelevant. If they can't afford them, they won't buy them. If they want to smoke, let them puff away and fund the rest of us.

In relation to the stuff with consultants - again, you're glossing over the facts when this thread is about the budget .... money is going to the wrong areas in any case. I will veer off slgihtly (so apologies).

You said the money "would be better spent on the HSE". I disagree 100%. The HSE needs to better spend its money.

64 million euros would replace a number of cancer check machines.

In theory. In reality, that 64 million would be spent in the first week in January, on almost nothing.

This is a sham budget, which is a contradiction to election promises made by the majority party in government who knew full well the state of irish finances at the election time, and it is a budget that does nothing to help the weak & vulnerable in our society as the biffo claimed

The impending economic issues were evident well in advance of the election. Everyone who did some independent research and watched the markets knew that FF would be unable to deliver on any promises in their first 3 years.
I wouldn't say it's a sham budget, just a bit of an uninspired one. For most people, there will be little difference between this year and the last.

leninbenjamin

seamus wrote: »

TThey know that smoking puts a massive strain on the health services,

slightly off topic, but this is something that constantly rankles me. that is actually wrong.

1) smokers contribute more revenue to fund the health service than they will typically utilise in services under the current tax regime.

2) over the course of their lifetimes smokers actually use up less health resources than someone who lives a long life. it's someone who gets to the age of 80 but spends a lot of time in and out of hospital with various ailments in the last few years of their life.

if everyone was a smoker our health system would have more resources available to it and less drains.

CerebralCortex

leninbenjamin wrote: »

slightly off topic, but this is something that constantly rankles me. that is actually wrong.

1) smokers contribute more revenue to fund the health service than they will typically utilise in services under the current tax regime.

2) over the course of their lifetimes smokers actually use up less health resources than someone who lives a long life. it's someone who gets to the age of 80 but spends a lot of time in and out of hospital with various ailments in the last few years of their life.

if everyone was a smoker our health system would have more resources available to it and less drains.

I think they should tax alcohol and junk food and the lifestyle that goes with them if thats the case they're probably the reason the health service is overburdened. My grandmother is over 83 years old smokes and is rarely in hospital afaik and neither drinks nor eats poorly. (Could resist this post )

Stark

Well they already tax alcohol to the hilt

I don't think our health minister would be too happy about a tax on junk food

Colonel Sanders

Stark wrote: »

I don't think our health minister would be too happy about a tax on junk food

LOL!!!

What the f*ck can't tobacco be taken out of the CPI and then lump as much as possible onto the cost. 30c increases will not result in many people giving up. Demand for cigarettes is inelastic (surely) as long as the increases are relatively moderate. If a huge chunk (25% or more) was whacked on the price the demand may become elastic. As things stand an increase of x% in price will lead to a decrease in sales of less than x% and hence an increase in revenue*

*disclaimer, the above is based on intuition, I haven't looked at actual figures