Sinn Féin Launch Emergency Budget Submission

Allah Hu Akbar

At a press conference in Dublin today Sinn Féin set out the details of the party’s submission to the government to address the shortfall in public finances. The party’s proposals would protect those on low-to-middle incomes and those on social welfare and call for a third tax rate on income in excess of €100,000, standardized tax reliefs and an end to tax exile status and shelters. Sinn Féin’s proposals would raise an additional €3 billion in tax revenue and savings in 2009 and almost €5 billion in a full year. The party has also called for borrowing to be increased to 10.5% which would raise €2 billion this year and have warned against taking too much money out of the economy at this time.

Speaking at a press conference Sinn Féin Deputy Leader Mary Lou McDonald said:

“Next week’s emergency budget must include measures to start stimulating as well as stabilising the economy. Last week Sinn Féin set out in detail how we would stimulate and stabilise the economy through a major plan to retain and create jobs across the country. Today we are setting out the detail of our submission to the government to address the shortfall in public finances.
“Fianna Fáil and the Green Party’s handling of public finances is compounding the problem. They have stated that they need to raise €4.7 billion to meet budgetary targets but we are conscious that their financial projections have been consistently wrong and that their failure to take measures to stabilise tax receipts makes it impossible to define exactly how much will be needed month on month to stay within budget estimations The government did nothing over the last ten years to broaden the tax base or make it more equitable and as a result, as the construction and retail sectors began to depress, public finances went into freefall. And now instead of bringing forward a framework and strategy for growth they have introduced a set of non-aligned short-term initiatives, many of which are counter productive.

“The government has confused accountancy with economics. They should have put more money aside in the boom and invested in long term priority projects. Instead they wasted much of the state’s money on non-productive schemes such as property incentives, fueling and prolonging the property bubble. Now we have the same thinking in reverse. They will exacerbate the recession by over taxing and spending cuts, rather than stimulating the economy.

“Sinn Féin believes that the only way to secure the economic future of this country is to retain existing jobs and to create new ones; to create a fair and progressive taxation system; to reduce the trade deficit; and to stabilise the financial sector. Next week’s emergency budget must include measures to start stimulating as well as stabilising the economy. We recognize there are growing fears about the damage that has been done to our international reputation and how that will impact on our ability to borrow and at what rate. Measures have to be taken to control our public finances and send a signal to the lending community that we have economic leadership in this state. But we cannot tax or cut our way out of this crisis – borrowing will also be necessary to stimulate the economy, but it must be strategic, just as taxes and cuts must be both strategic and fair.

Public finance proposals

“The crisis in public finances needs to be addressed but it needs to be done in a fair and effective way. We believe that the vast majority of workers are willing to contribute but they are not willing to shoulder an unfair share of the burden. Sinn Féin believes that:
• Those earning the minimum wage should be kept out of the tax net and those on low-to-middle incomes protected.
• Social welfare payments must not be cut – a person on a weekly payment of €204 cannot be asked to carry the can for this government’s failure.
• Waste and duplication must be eradicated in the public sector, but frontline services must be protected.
• Borrowing must be strategic and, as in other states, an acceptable method of financing infrastructure.
• There must be tax justice – everyone must pay their fair share, there can be no exile status or legal evasion, tax defaulters should be vigorously pursued.

“The proposals we are putting forward today are a response to the emergency situation caused by the government’ s mishandling of the public finances. A total overhaul of the tax system is required to broaden the tax base and make it more equitable and sustainable and this needs to be undertaken with some urgency.”

Revenue raising – Total 2009 €2.460 billion – Total Full Year €4.119 billion

We would introduce a range of tax measures which would generate €2.460 billion over the next seven months and €4.119 billion over a full year. These include:
• Make all discretionary tax relief schemes available only at the standard rate; exceptions should be made only if there is a proven benefit to the Exchequer. 2009 - €600 million. Full year €1 billion
• Abolish the PRSI ceiling and raise PRSI on employees by 1%. 2009 – €563 million. Full year - €950. According to the government the Social Insurance Fund will run out by the end of the year. PRSI is ringfenced to ensure that the money is there to meet unemployment benefit, contributory and non-contributory pensions, maternity benefit and redundancy payments. Combining this measure with abolition of the PRSI ceiling will support the Fund in a fair way.
• Increase the health levy by 3% on those earning in excess of €100,000. 2009 – 90million. Full year - €230million.
• Introduce a new 48% tax rate on income in excess of €100,000. 2009 - €180 million. Full year €435 million.
• Charge Capital Gains Tax at 30% (up from 22%) 2009 - €286 million. Full year - €491 million.
• Raise the tax on second homes from €200 to €600 per annum. 2009 - €80 million. Full year €80 million (assuming the tax is paid in a once off payment.
• Reduce the tax reliefs on mortgage interest for landlords by 50%. 2009 - €233 million. Full year - €400 million.

Savings – Total 2009 - €598 million. Full Year €803 million

• Abandon co-location scheme
• Implement a new contract on all hospital consultants which would cap their start off pay at €100,000, with a maximum of €150,000. 2009 - €122 million. Full year €210 million
• Nationalise the wholesale distribution of subsidised drugs and compel medical practitioners to prescribe low cost generic drugs. 2009 - €100 million. Full year - €200 million.
• A 20% cut in travel expenses across all departments. 2009 - €8.4 million. Full year - €14.4 million.
• Cap TD salaries at €80,000 and senators at €60,000 2009 - €4.423 million. Full year - €7.725 million.
• Remove the allowances payable to Chairs, Vice Chairs and Whips of 23 Oireachtas Committees and 5 sub-Committees. 2009 - €485,000. Full year €830,931

Borrowing to be increased to 10.5% of GDP - €2 billion

Borrowing to sustain current expenditure, without a plan to stop borrowing through economic growth is not advisable. However, we believe that it is not just acceptable but necessary to borrow for infrastructure that has the potential to grow our economy.

We believe that the government should borrow 10.5% of GDP to allow stimulation in economy and prevent too much money being taken out via tax hikes or spending cuts......

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Just wondering could I get some opinions on their proposal, personally I think TD's and Senators should be on less.

Another thing that has come out in England is a thing for allowances for a second home, do TD's in Ireland get this as well?

pseudonym1

I think that is pretty darn constructive! Woulld b wary to say the least of Sinn Fein in power, But in comparasion to the crooks that are their now- Meh!

My biggest concern would be the generic low cost medication! That may not work -and perhaps being a little optiomistic in their calculations. May very well get my vote.

As for your questions OP sorry unable to help ya there. Just thought would offer my 2 cents!

Agent Smith

Interesting, if nothing else.


No Corp tax hike?

Rented Mule

Agent Smith wrote: »

Interesting, if nothing else.


No Corp tax hike?

That's the most sensible part of the plan.

Tech3

As much as no social welfare reduction they have no ideas to generate jobs which should be a priority. I would have expected VAT to be deducted also but its not in their proposals.

silverharp

QUOTE - They will exacerbate the recession by over taxing and spending cuts, rather than stimulating the economy.


So let me get this straight , "we" got ourselves into a hole by borrowing and spending too much ,soooo their solution is more borrowing and spending. ah too funny. D- now go to the back of the class and face the wall

Hagar

Now that the regular Sinn Féin knockers are starting to appear out of the woodwork perhaps one of them will tell us how Fianna Failure plan on digging the country out of this hole.

silverharp

Hagar wrote: »

Now that the regular Sinn Féin knockers are starting to appear out of the woodwork perhaps one of them will tell us how Fianna Failure plan on digging the country out of this hole.

nobody said anyone else will get it right , every possible political combination will make the same ploicy mistakes , its genetic trait of poiticians

Permabear

This post has been deleted.

edanto

They seem to have a lot of sensible tax and cut proposals.

But the preamble led me to expect a plan to fuel job creation as well. Where is that?

ixoy

How exactly do they plan to stimulate economic growth? That's, importantly, lacking in the plans above.

Also borrowing more? How is that going to help us meet our goals of getting it back to 3%? What exactly are we borrowing money to spend on?

It seems designed more towards the lower-end, the working class, and not really the middle-class who would lose tax relief at the higher rate (so for example the Annual Commuter tickets would suddenly be a lot less attractive and push people back to cars).

thebman

Personally I'd eliminate transport expenses altogether for the Dept of Transport. They should be using Public Transport and since they are in charge of it, give themselves excemptions to pay fairs related to work

I agree with Donegalfella on most of his points.

The middle class (anyone over 23,000) should take much of the burden though so for example I would be for things like someone on an upper middle class income should not get an annual commuter ticket tax exemption.

The lower income families below that should make some contribution but realistically have little they can contribute. If your earning below 16,000 there should be no tax on them because you could barely live on that TBH.

This will not harm ticket sales IMO as I was on this line and earned below the average income for the state and had no problem meeting this expenditure. I have a car but quite simply you can't get into the city at that time of morning by car so you have to use the train if you are close enough to it which is why it is packed to the doors with people every morning. You don't need to provide an incentive for people to use a service that is being used at capacity. Dublin Bus is just *** and nobody with a choice will use it no matter what you do with it in its current state.

Funny they have no plans to privatise state owned businesses which I'd be in favor of as it would generate revenue and many of these are losing money at the moment but should clearly be making a profit (Dublin bus - subsidy = loss making), Irish Rail, Bus Eireann (how the hell this is justified as being still needing to be state owned I'll never know).

I'd also reduce social welfare by 10 Eur a week for single people and by more for people living with parents unless they can show they are paying expenses to their parents. This is just drinking money to a lot of people living with their parents.

silverharp

• Charge Capital Gains Tax at 30% (up from 22%) 2009 - €286 million. Full year - €491 million.


I'd love to see the assumptions behind this one, who the hell will be paying CGT in 09 , since most of the cute hoors seemed to be up to their gills in Irish bank stocks , they will have bags of losses to offset any gains made this year

Driseog

Those saying that low income workers shouldn't be protected are talking soft. I know lads on minimum wage and just about getting by, if they were to get taxed there is no incentive for them to remain in employment, they might as well be on the dole. And a lot of those not strictly on mimimum wage have had their hours reduced. Whats the point in working in a sh1ty job if your as well off on the dole?

thebman

Driseog wrote: »

Those saying that low income workers shouldn't be protected are talking soft. I know lads on minimum wage and just about getting by, if they were to get taxed there is no incentive for them to remain in employment, they might as well be on the dole. And a lot of those not strictly on mimimum wage have had their hours reduced. Whats the point in working in a sh1ty job if your as well off on the dole?

You have to reduce the dole in line with taxing minimum wage so the incentive stays the same.

Besides its not fun being unemployed. Working a crappy job is better than being unemployed.

nesf

• Make all discretionary tax relief schemes available only at the standard rate; exceptions should be made only if there is a proven benefit to the Exchequer. 2009 - €600 million. Full year €1 billion

Already suggested by others.

• Abolish the PRSI ceiling and raise PRSI on employees by 1%. 2009 – €563 million. Full year - €950.

Already suggested by others.

• Increase the health levy by 3% on those earning in excess of €100,000. 2009 – 90million. Full year - €230million.

• Introduce a new 48% tax rate on income in excess of €100,000. 2009 - €180 million. Full year €435 million.

An interesting combination not been suggested by most others. The thing is you'd almost certainly not get €655 million extra out in a full year. Increase taxation by 10% (more like 14% given the PRSI changes) on incomes over €100K and you'll find people getting paid in ways other than income for amounts over that threshold.

• Charge Capital Gains Tax at 30% (up from 22%) 2009 - €286 million. Full year - €491 million.

Not mentioned by others because it's a bit pointless given that Capital Gains revenue is plummeting at the moment. CGT is a fair weather tax stream, not one to depend on in a recession.

• Raise the tax on second homes from €200 to €600 per annum. 2009 - €80 million. Full year €80 million (assuming the tax is paid in a once off payment.

A nice populist tax here that I haven't seen bandied around by others (though I may have missed it). Should go down well with their voter base. Raises **** all revenue though.

• Reduce the tax reliefs on mortgage interest for landlords by 50%. 2009 - €233 million. Full year - €400 million.

This initially looks good until you realise that reducing relief might increase the rate of defaults which will cost the exchequer money unfortunately. The time to cut mortgage interest relief was several years ago not now.



In summation. Should go down well with the base given how it's structured to hit the most well off. In that sense well constructed and sensible opposition policy. As a realistic document for implementation simply not big enough. The cuts aren't large enough and I don't think they'll make as much on the CGT and income tax increases as they estimate.

Hagar

Why do our TDs get their salary tax free? What is the logic behind it?
I know it won't make a huge difference to the coffers in general but it would do wonders for the national morale if the ordinary people saw that the leaders of the country were treated the same as they are when it comes to tax.

Time Magazine

Allah Hu Akbar wrote: »

• Implement a new contract on all hospital consultants which would cap their start off pay at €100,000, with a maximum of €150,000. 2009 - €122 million. Full year €210 million
• Nationalise the wholesale distribution of subsidised drugs and compel medical practitioners to prescribe low cost generic drugs. 2009 - €100 million. Full year - €200 million.

Lol. Bye bye pharmaceutical industry.

Allah Hu Akbar

The Economist wrote: »

Lol. Bye bye pharmaceutical industry.

Sure isn't that what America is doing?

Why do our TDs get their salary tax free?

Do TD's not pay taxes on their salary?

Time Magazine

Allah Hu Akbar wrote: »

Sure isn't that what America is doing?

To the best of my knowledge, America is not incentivising its best medical professionals to flee. Nor is it killing off the competition in a market by passing laws and forcing doctors to buy their products.

They say FF have mixed up accountancy and economics. This much is probably true. However SF are mixing up economics with lunacy.

segaBOY

Allah Hu Akbar wrote: »

• Nationalise the wholesale distribution of subsidised drugs and compel medical practitioners to prescribe low cost generic drugs. 2009 - €100 million. Full year - €200 million.

Why nationalise the wholesalers? What makes SF think they can do a job better and cheaper than say the likes of United Drug who run successful operations in Ireland and the UK? Do they think reemploying all of these lads on Public Service payscales with full pensions is really going to make wholesaling anymore efficient or cheaper? The issue is about reimbursement that Mary Harney is tackling head on in the next budget and slashing prices! This is just silly.

And as mentioned in previous post-push generics too much you are biting the hand that feeds you, Pfizer, Schering Plough, Merck, Wyeth etc etc they'll all leave this over priced economy.

Allah Hu Akbar wrote: »

Borrowing to be increased to 10.5% of GDP - €2 billion

Borrowing to sustain current expenditure, without a plan to stop borrowing through economic growth is not advisable. However, we believe that it is not just acceptable but necessary to borrow for infrastructure that has the potential to grow our economy.

We believe that the government should borrow 10.5% of GDP to allow stimulation in economy and prevent too much money being taken out via tax hikes or spending cuts......

Has anyone told them about the ECB or IMF? Laughable at best, the public finances are in serious deficit, lets make them worse by getting in more debt to artificially boost an overpriced economy for a longer period of time putting us in even more debt and making us even less competitive.

Good work Gerry, I'll pass for now. :rolleyes:

cm2000

Jesus where to start with this load of crap.....

-Our capital Gains is down 75% at the moment and an increase of that massive scale would completely discourage investment. Over the last few weeks the stock market has been recovering quite nicely, introduce this and investment will slow.

-The "just tax the rich" concept is populist rubbish. You cannot have an economic contraction of this scale and not ask the vast vast majority of the country not to take any pain at all. No cuts on Social Welfare? No Income tax rise on most people? This plan is a copout, it won't work, it won't raise that much tax, it'll scare the living crap out of anyone rich or aspirational in the country and it's not "fair" at all. it's victimization of a small group of people.

-Raising costs by raising employer PRSI is the complete opposite to what we need to do to get out of this mess. How people don't realize that costs for businesses are too high and this takes from our competitiveness is beyond me?

-If I am one of the best cancer doctors in the country then why the hell would I work for €100,000 a year?? ridiculous cap. Similarly €80,000 for a TD?? Alot of these guys take a pay cut anyway when they come into politics. The solicitors, barristers, doctors and accountants in the Dáil would all earn more than they are on now. When they are earning a decent amount you can still get smart people running for election. Make it €80,000 and bye bye anyone who- rightly- feel that they are good enough to earn more than that at this stage in their careers.

Can you imagine the stock market collapse if this ridiculous drivel comes into effect?

portomar

donegalfella wrote: »

This post has been deleted.

“The Government’s budget has once again fallen apart. Its plan to spend €65 billion is only supported by €34 billion in tax. The Government is travelling on a road that can only lead to ruin. No country can borrow 12.75 per cent of a rapidly shrinking income and hope to survive,” he said. “This situation is the consequence of eight years of economic mismanagement and 18 months of denial and incompetence in the face of the mounting crises,” said Mr Bruton.''

source:

basically, the governemnt is on course to be borrowing a good deal more than sinn feins proposals. I do think it's hilarious to see the shinners writh about looking for new economic clothes when it realised that if it gets its previous marxist leanings put into practice it would be a disaster for the country muppetts

cutting back on TD's and doctors pay though?? go for it, if ya can, government at the mo doesn't have the balls, tho its more complicated than that obviously. Our pharmaceutical manafacturing industry is built mainly on exports, i think sinn fein are talking about trying to save the exchequer money by changing they way the state buys drugs for public patients including those on medical cards, don't think they're suggesting buying out Wyett?? correct me if im gettin this one wrong. and by the by governments role shouldn't be to create jobs as such but bring jobs here from FDI and create an environment, infrastructure, tax system and fiscal rectitude attractive to job creation.