McCreevy's Cuts.

Mr E

Examiner:

The Minister for Finance has announced the biggest curb in public spending in well over a decade.

Charlie McCreevy has revealed €36.7bn will be spent this year and said the current rate of spending is not sustainable.

He expects all Ministers to manage with the amounts announced.

In total there is just a rise of 2% and with inflation running at almost 5% that is almost cancelled out.

The Minister said health, education and welfare remain the priority, with almost 66% of the money allocated to those departments.

The health budget is €8.9bn - up 6% but with inflation in the health sector rated at 10%, there are tough choices ahead for Minister Michael Martin.

Mr McCreevy today laid down the law to his Cabinet colleagues, saying he wants "value for money", and he cannot go on increasing health spending.

All Ministers will outline how the tight new estimates impact on the departments in briefings later this evening.

Minister McCreevy says he will deal with benchmarking and social welfare payments on Budget day.

Just listening to Dunphy... Luas delayed, first time buyers grant gone.... I'm sure a full list will appear shortly.

- Dave.

Mr E

Independent:

Finance Minister Charlie McCreevy has taken the axe to the public finances. Spending estimates announced in the past few minutes are even worse than expected - and the amount of money the Government will spend next year will only go up by 2%, that's less than half the rate of inflation. There's also bad news if you're hoping to buy a new home - the first time buyers grant is being abolished. Capital spending on infrastructure is going to down by 6%. Rural communities are going to suffer the most with the Departments of Agriculture and Community Affairs suffering the biggest cutbacks. Arts, the Environment and even Transport are also going to get less money. Health, Social Welfare and Education are getting increases but these will be less than inflation. Minister McCreevy says he'll deal with benchmarking and social welfare in the next budget but he has warned that the country may not be able to afford any increases.

jd

Well I'm fecking furious..
I have paid the initial deposit (pending title research etc) , but have not signed full contracts yet...
I'm abt 4k down, and I'm pretty stretched as it is re the amount I'd have to put up...

Mr E

Yeah, I'd planned to buy a house early next year. My grant is gone - I'm not happy.

And don't talk to me about how much longer the new ring road in Limerick is going to take..... :mad:

- Dave.

Meh

There's also bad news if you're hoping to buy a new home - the first time buyers grant is being abolished.

Good. This was one of the stupidest grants in existence. It just led to the price of every house in the country going up by exactly £3,000 -- it was just a direct transfer from the government to the seller.

RainyDay

Good. This was one of the stupidest grants in existence. It just led to the price of every house in the country going up by exactly £3,000 -- it was just a direct transfer from the government to the seller.

Not true - It only applied to buyers of brand-new houses. In many estates of 'starter homes', the builder will knock the price up by 3k - but normal market rules of supply & demand ensure that 2nd houses reflect a real market price.

The solution to this problem would have been to extend the grant to purchasers of 2nd hand houses too. FTB's need all the help they can get to get onto the property ladder.

jd

First time buyers haven't the benefit of an equity gain from their previous residence, and it helps towards the initial deposit.

yankinlk

thats bs, it does not help towards deposit. It helps toward new fixtures and fittings. Begone for good FTB grant, you were useless but to line the builders pockets. Same thing with the childrens allowance tbh, if that goes up, the creche's go up by three times as much.

[jerry seinfeldish] What's the deal with everyone buying new houses as a standard for "first time buyers" ??? It makes no sense. If you were truly wanting to invest in a home, but couldnt afford a lot, it would make more sense to buy used.

Hasn't the government reduced the stamp duty for first time buyers purchasing second hand homes? That way the house comes with fixtures and fittings...and then you can do it up the way you want over time.

kaimera

The medical card had to be the worst.
Miserable bastard.


Drugs Payment Scheme up by 20+%.

Repli

Charlie McGreedy

Gah.. is it true he's raising the cost of public transport by 9% too ?

kaimera

apparently so

Victor

Originally posted by RainyDay
The solution to this problem would have been to extend the grant to purchasers of 2nd hand houses too. FTB's need all the help they can get to get onto the property ladder.

They did this a few years ago. Get sum ski||z.

So is Charlie about to give us the finger?

jd

Originally posted by yankinlk
thats bs, it does not help towards deposit. It helps toward new fixtures and fittings.

Fair enough, if you want to be a pedant. Still it means Ihave to find 3.8k out of somewhere..

RainyDay

They did this a few years ago. Get sum ski||z.

Rubbish, Victor. The FTB grant applies to new houses only. If you don't believe me, check out the Dept of Environment website

The Minister for the Environment and Local Government, Mr Martin Cullen, T.D., has today (14 November 2002) announced the abolition of the new house grant scheme

kaimera

Never mind the cuts..

what about a increase in the cost of a PINT.

Up by 10% so add another 20+ cent onto what your paying now>

ffs

Meh

Originally posted by Kaimera
what about a increase in the cost of a PINT.

Up by 10% so add another 20+ cent onto what your paying now

Where did you hear this? It wasn't in the estimates anyway -- they don't deal with taxation. They are just an announcement of what the government intends to spend next year, not where it's going to get the money from. You'll have to wait for the Budget itself to find out what tax increases (if any) are on the way. Before then, it's all just speculation...

sceptre

It's highly unlikely he's going to mess around with income tax (or if he does it won't by much) - he's stated his continued commitment to his taxation policy. Whether you consider that as a good thing or not is another matter.

(from an anti-monetarist POV raising the standard rate of income tax would be a big mistake with regard to stimulating the economy so at least this year I'd propose that income tax should remain at the same level (with a little nudging of the bands). McCreevy is a rampant Friedmanite (when his policies tend towards coherence) though so he might not necessarily feel the same way)

b20uvkft6m5xwg

I dont think the FTBG was a great solution for the probs faced by young peeps buying into the prop. market. There seems to have been much conjecture as to its benefit for some time now.

My own personal belief is that the financial institutions in the state need to modify the financial products they offer in terms of financing property purchases. For instance the system in Japan where Mortgages generally are spread over 2 generations.

Borzoi

Originally posted by yankinlk
thats bs, it does not help towards deposit. It helps toward new fixtures and fittings.

Well, I can tell you for a fact that the FTB was spent on my deposit, thanks to the Banks willingness to lend it up front. Had it not been for that I would not have been able to but when I did, probably woulb have been another six months, wherupon prices would have gone up - again.

AlekSmart

Ladies and Gentlemen....!

Minister Seamus Brennan is revealing today the total cost of his TAXI-Drivers hardship fund......
Now those of you who are dazed and confused at the decision of the State to cease the FTBG can take solace that of the €40Mil saved by that decision,some €30Mil will now be but to much more socially desirable "Hardship alleviation" amongst Taxi-Drivers,their widows and orphans etc....
This is just the simple Mathematics and is not a commentary on the usefulness or otherwise of this particular Ministers decisions.....

yankinlk

Well, I can tell you for a fact that the FTB was spent on my deposit, thanks to the Banks willingness to lend it up front. Had it not been for that I would not have been able to but when I did, probably woulb have been another six months, wherupon prices would have gone up - again.

I dunno bout your situation...sounds very unique. i had to put a deposit on my home a year before it was built, when it was only a glint in the builders eye. there was no bank going to give me a loan on a FTBG for a house that did'nt even exist yet. i think you are witholding a bit of info...

i too got a loan from a bank before i actually had the FTBG, but the rules were very strict as i remember...like contracts signed, application for FTBG in the mail and on it's way ... but again that loan was used well after a deposit had been paid... at least 10 months.

Victor

Kindly remember that those who availed of the FTBG have assets (houses) that are not subject to any tax during the currency of ownership or when they are sold. I have little pity.

Waylander

That would depend on whether they have lived in the house for the whole period of ownership or not Victor, and they also shelled out alot of money for those assets, they were not just given them. I always thought that it was a bit ridiculous that first time buyers of second hand houses never qualified for the grant and the stamp duty exemption as well.

Victor

Originally posted by Waylander
That would depend on whether they have lived in the house for the whole period of ownership or not

Of course, but there is always "one" home a medium-large property owner can use for this purpose.

Originally posted by Waylander
and they also shelled out alot of money for those assets, they were not just given them.

Hey some people spend a fortune on booze, do they get tax back? There are many people at the moment with houses worth €200,000+, having only paid the builder €50,000 a few years ago (I know there is interest costs, but these can also be written off).

Originally posted by Waylander
I always thought that it was a bit ridiculous that first time buyers of second hand houses never qualified for the grant and the stamp duty exemption as well.

You miss the point, new houses attract VAT, second-hand ones don't. At one point the grant made up the difference between the stamp duty (up to 9%) and the VAT (recently 12.5%)