Full text of Budget 2011 speech online

Darragh

Taken from http://budget.gov.ie/budgets/2011/FinancialStatement.aspx

"High"lights :

Child Benefit
There will be a €10 reduction on both lower and higher child benefit rates with an additional €10 reduction for a third child only. These reductions will bring rates of payment back to the 2006 rate for the first and second child and to 2005 rates for the fourth and subsequent children with the rate for the third child reflecting the 2004 rate. The new rates are still three times higher than they were in 1997.
Details of the specific social welfare measures are set out in the Summary of Budget Measures along with a number of other changes to social welfare schemes and entitlements.
Extra Fuel Allowance Payment
In view of the harsh weather conditions experienced in recent weeks, I am allocating an additional €14 million to the fuel allowance scheme to enable a payment of €40 to households that receive the fuel allowance payment. The Department of Social Protection is putting measures in place to roll out this additional payment as soon as possible and many households will receive this payment this year.
Helping the Unemployed
We know from the 1980s the importance of equipping the unemployed with skills and keeping them close to the labour market. To that end, we are refocusing the National Employment Action Plan to establish clearer pathways to employment by ensuring that State agencies interact early and often with those who have lost their jobs to provide opportunities for education, training or work experience placements as appropriate.
Building on the work placements and training places that have already been introduced, I am providing for an additional 15,000 activation places and supports for the unemployed at a cost of about €200 million.

• The Skills Development and Internship Programme will provide up to 5,000 places in the private sector with a contribution from that sector of an additional €38 million or so to pay some of the costs of the internships.

• The Work Placement Programme will provide up to 5,000 places in the public service. The Tánaiste announced the scheme in the Education sector last week and similar announcements for other sectors will be made by Ministers over the coming months.

• A New Community Work Placement Scheme will provide up to 5,000 additional places in the community and voluntary sector.

The labour activation measures will be complemented by the extension of the Employer Job (PRSI) Incentive Scheme to the end of 2011 and by the transformation of the Business Expansion Scheme into a new Employment and Investment Incentive.
The National Recovery Plan provides for reform of the labour market and the removal of barriers to job creation resulting from the current level of the minimum wage and inflexible employment agreements. The aim here is to provide more job opportunities, especially for the young.

The Taoiseach and Ministers have already taken substantial reductions in their pay. The effect of the pension levy and the pay cuts introduced earlier this year amount to 28% in the case of the Taoiseach and 23% in the case of Ministers.


The changes in PRSI introduced in this Budget as they affect office holders will bring about a further cut in their net pay. Nonetheless, the Government has decided to introduce another reduction in the salaries of the Taoiseach, Tánaiste and Ministers. The salary of the Taoiseach will be reduced by over €14,000 per annum and the salary of Ministers will be reduced by over €10,000 per annum.



This brings the overall reduction in the gross pay of the Taoiseach to over €90,000 and in the case of Ministers to over €60,000. Details to changes in the Government’s transportation arrangements and Ministers’ pay and pensions are set out in the accompanying documentation.


The Government believes there should be a maximum salary rate of €250,000 in the public sector. Only a few office holder posts have salaries above this level at present but there is a larger number in the State Agencies.

Income Tax
Such a system cannot be created in one Budget. But today we take a major step forward in the reform process. In this Budget, we will:

• abolish the Income Levy and the Health Levy;
• replace both with a single Universal Social Charge, governed by one set of rules on a broad base;
• remove the employee PRSI contribution ceiling;
• increase the PRSI rate for the self-employed, higher earning public servants and office holders;
• reduce the value of bands and credits by 10% in line with overall reductions in incomes;
• tackle excessive reliefs associated with private pension provision;
• abolish or restrict many tax reliefs that higher earners use to shelter income unfairly, and
• target the remaining reliefs more clearly on employment growth.

By broadening the base at both ends of the income spectrum, the nominal rates of tax can be kept lower while the effective rate can be raised in a way that is fair to all.


In the measures I am presenting today, those on the new reduced minimum wage will not be brought into the tax net. The top marginal tax rate will be kept at 52% for all taxpayers.


As I said in the 2010 Budget, the Universal Social Charge requires that everyone makes some contribution, however small, to the provision of services. This charge is separate from income tax which is levied proportionately as income increases.


The changes made today generally either maintain or enhance the incentive to work relative to social welfare. For a married couple with no children earning €25,000, their net income will fall by 2.8% or €12 per week. For a similar family with two children, net income will fall by just 1% or €5 a week.



We must always ensure an appropriate balance between the rewards from work and income support from welfare. I believe that in these most difficult of circumstances we have struck the right balance in today’s Budget.

Indirect Tax
Excise will be increased by 4 cent per litre on petrol and 2 cent per litre on auto-diesel, both increases inclusive of VAT, from midnight tonight.


In the light of its success, the car scrappage scheme introduced last year will be extended for a further six months to 30 June 2011. The VRT relief provided in that period will be up to a reduced maximum of €1,250.


I have also decided to extend the VRT relief for series production hybrid and flexible fuel vehicles for two years to end-2012. The rate of relief provided will be up to €1,500. The VRT relief for plug-in hybrid electric vehicles will continue at up to €2,500 until 31 December 2012.


A review will be undertaken of the excise duty payable for licences for on-trade and off-licence sales of alcohol products during 2011 to ensure that the system is both transparent and fair.