No sector spared in Budget of landmark severity

11 December 2010 No Comments by The Northern Standard

The various streams of Co Monaghan life were still engaged yesterday in digesting the implications of the Budget measures announced by Minister for Finance Brian Lenihan on Tuesday as the first steps in restoring stability to the Irish economy.
No sector was spared from the tax increases and benefit cuts announced. Local political reaction has divided along predictable lines, with Dr Rory O’Hanlon TD of Fianna Fail describing the stringencies as very tough but very necessary, while Fine Gael’s Seymour Crawford condemned the approach taken by Minister Lenihan as holding out no hope for the unemployed and targeting families unfairly.
The main points of the Budget were:
• 10% cut in tax bands and tax credits. Income tax rates will remain unchanged.
• Reduction in the minimum wage by €1 to €7.65
• €10 cut in child benefit for the first and second child.
• 4% cut in most social welfare payments.
• A cut of €8 a week in benefits to the unemployed, with a similar cut to the carer’s and disability allowance.
• No change in the old age pension.
• Public service pensions over €12,000 cut by average of 4%.
• An increase in excise duty on petrol by 4 cent a litre and a 2 cent increase in diesel.
• No increase in alcohol and tobacco duty.
• Third-level registration fees rise to €2,000.
• Significant reforms of the stamp duty regime.
“Minister Lenihan failed to give any real hope to the 450,000 people looking for work by only providing 15,000 back to work schemes and no real support to retain or provide jobs”, was the reaction of Cavan/Monaghan Fine Gael TD Seymour Crawford.
Deputy Crawford attacked the Minister for taking money from “the blind, widowed, disabled, invalids and carers” as well as those on jobseekers benefit and allowance.
“While ex-Minister and now T.D., Ms. Mary O’Rourke stated that these people can get nixers, I doubt if that is possible and of course it is illegal,” the FG TD observed.
He predicted that the petrol and diesel price increases would have serious effects on Border trade, with businesses losing out to Northern Ireland.
“More seriously it will increase the cost of haulage especially in areas like Cavan and Monaghan where we have no rail services and rely on road transport to maintain our industries and bring our exports to the boats.”
Deputy Crawford said he fully realised that changes had to be made, but he asked why young families should be the main target, as they already had serious problems with lower incomes and high mortgages caused by the property boom.
“Fine Gael did not disagree with the €6 billion parameter of the budget but showed clearly how the same could be achieved by real job creation and a more positive job retention provision. We must retain our well educated young people.”
The cut in payments to the Taoiseach and to Ministers announced in the Budget has been welcomed by Cavan/Monaghan Fianna Fáil TD Margaret Conlon.
Deputy Conlon said, “As public representatives we need to lead by example. People all around the country will feel the pinch from our efforts to get the economy back on track. It is important that our leaders demonstrate that they too are playing a full part.
“I think most people will welcome these initiatives. We need to make sure that our public representatives are not being paid excessive sums and that their salaries and entitlements reflect the condition of the State finances. I believe these measures will go some way towards achieving that goal.”
Deputy Conlon also expressed the view that farmers in the Cavan/Monaghan constituency had been “protected” by the measures introduced in the Budget.
“I’m delighted that the work of farmers throughout our region and the rest of the country have been recognised in this Budget,” she stated.
“Bringing forward the final instalment of the Farm Waste Management Scheme to this month will come as a boost to farmers and their families facing into the expensive Christmas period and I am calling for a minimum delay in the processing of those payments. I was also very happy to see the stock relief for farmers extended, along with the special incentive stock relief of 100% for young trained farmers.
“Overall the important thing to note is that despite the many difficulties facing the economy, our farming sector has been protected in this Budget. Many of the measures announced should have a positive influence on our farms and I hope that this will come as a further boost to farmers and their families.”
These comments were endorsed by her constituency colleague Brendan Smith. The Cavan-based Minister for Agriculture highlighted the fact that up to €100 million of the final instalment of the Farm Waste Management Scheme, which is due to be paid early next year, is now being brought forward to this month.
“By the time the final instalment is paid in full, well over €1.1 billion will have been paid, all of which is Exchequer-funded,” he stated.
The Minister emphasised that significant savings would be be achieved on his Department’s payroll costs over the period of the Government’s National Recovery Programme 2011-2014.
It is estimated that the Department’s staffing level will have fallen by approximately 240 in 2010 and this rate of reduction is set to continue in 2011. The Department remains committed to managing its business and ensuring effective service delivery with ongoing reductions in staff resources, Minister Smith commented.
“Food Harvest 2020 sets out a clear pathway for Irish agriculture and the Irish agri-food sector over the next decade, with ambitious but entirely realistic and achievable targets of growing primary output by one-third and our value-added and exports by around 40 per cent. The Government’s National Recovery Programme 2011-2014 recognises the contribution that the agricultural, fisheries and forestry sectors can make to the recovery of this country’s economy and the enormous social and economic contribution to rural and coastal communities throughout the country.”
Minister Smith argued that the Budget and the spending estimates for 2011 were “a logical next step in providing for the future development of the sector and are a further recognition of its value and its potential in playing such a key role in economic recovery over the next few years.”
“Any Budget that reduces people’s income is a tough Budget and this one is very tough but very necessary at the present time,” Dr Rory O’Hanlon TD of FF stated.
Dr O’Hanlon felt that it was important for the Government to do the right thing rather than what was popular, and he believed the right decisions were made to help the country to return to the levels of prosperity that were enjoyed during the best years of the Celtic Tiger.
“The Budget sets out to spread the burden of savings and tax as fairly as possible. Those earning the most will have to pay the most by way of extra tax increases.
“No politician wants to reduce social welfare payments but unfortunately out of the €31 billion taken in by the exchequer, €21 billion is spent on social welfare payments and it is not possible to reduce our spending without taking some saving from the social welfare bill. The social welfare payments in 2011, after the budget, will still have increased by three times the rate of inflation since the Government came to power in 1997.”
Dr O’Hanlon welcomed the increased fuel allowance allocation of €40 per household and hailed what he perceived as the job creation emphasis of the Budget.
“The Government are committed to assisting those unemployed in getting back to work and this is seen in the 15,000 activation places that will be created at a cost of €200 million.
“I am satisfied that the Government has sought to create a fair and equitable budget. We owe it to the next generation to take the right decisions now and I believe these provisions are the best course of action for the country at the present time. We cannot take the easier popular options. We must do what is best for the country in the long run and I believe that is what Budget 2011 will do.”
Speaking in the Dáil on Budget 2011, Sinn Féin Dáil leader Caoimhghín Ó Caoláin said it was still not a done deal and could be defeated. He appealed to those TDs who had hitherto supported the Government to act in the national interest and to vote against the Social Welfare Bill. He also called on Fine Gael and Labour to pledge to reverse what he called a “cruel and savage” Budget.
Deputy Ó Caoláin said:
“This Budget has launched a further all-out attack on people dependent on social welfare and the slashing of the minimum wage is to follow next March.
“The result of this cruel Budget will be poverty and unemployment and social misery. The cuts to social welfare are savage and it is people on social welfare who are going to bear the brunt of this Budget.
“Jobseekers Allowance has been reduced by €8 to €188 per week for those over 25. For people between 22 and 25 years of age the rate drops by €6 per week to €144. In a Budget with no jobs strategy the Government’s message to the unemployed – and especially the young unemployed is very clear: ‘Subsist on less or emigrate.’
“In Budget 2010 the Government’s cruellest cut was to carers. People on Carer’s Allowance lost €8.50 per week and those on Carer’s Benefit lost €8.20. It’s reckoned that over 160,000 family carers provide over 3.7 million hours of care each week. On top of those heartless cuts we now have in Budget 2011 another €8 per week cut in Carer’s Allowance and Carer’s Benefit. That’s a weekly cut of €16.50 and €16.20 in the space of just over a year. It is an absolute disgrace.
“The Government has attempted to portray the tax changes in this Budget as reforming and progressive. They are nothing of the sort. There is no wealth tax. There is no new higher rate for those with individual incomes of over €100,000 per annum. In Sinn Féin’s economic recovery plan ‘There is a Better Way’ we show that such a new top rate of 48% would raise €410 million – well in excess of the €397 million the Government is slashing from social welfare for people of working age in this Budget.
“Health cuts of €765 million in 2011 will, I believe, result in bad outcomes and even the deaths of patients across the system. There are currently over 1500 beds in our public hospitals already closed due to cuts. The further cuts in this Budget will close hundreds, if not thousands more beds. If the Government had capped the salaries of public servants at €100,000 this would have saved €350 million for the State per year – nearly half of what is being cut out of the Health budget.
“We call on Fine Gael and Labour to commit to reversing these Budget cuts and rejecting the IMF-EU sell-out deal.
“For our part, we in Sinn Féin are quire clear. We have rejected the Consensus for Cuts. We have put forward a fairer, better way to real economic recovery.
“This Budget is still not a done deal. The four-year plan is not a done deal. And the IMF-EU sell-out is not completed either. If there is anyone with a shred of conscience left among those who have hitherto supported this Fianna Fáil-Green Government then now is the time for them to act in the true national interest.
“And the national interest is also the interest of the people of Tipperary and Kerry and every other county and constituency. Tomorrow the Government will try to force through the Social Welfare Bill with its savage cuts to the incomes of the most vulnerable. Let those who speak of the national interest reject this Bill, reject this Budget and reject this Government.”

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