Little Christmas cheer in Budget

There was very little Christmas cheer in the Budget announced last Wednesday by Minister for Finance, Mr. Brian Lenihan, T.D. Most of the measures had been well flagged by selected leaks prior to the official announcement in the Dail. Nevertheless the Budget speech delivered by the Minister came as a shock to the general public, particularly those workers in the public sector who bore the brunt of the cuts announced by the Minister. Even those public sector workers on moderate and even low wages will suffer cuts in their take home pay. The cuts in childrens allowances were also flagged in advance though those dependant on social welfare will be shielded from its effects. A particularly savage cut was the Jobseekers Benefit for those between 20 and 24 who have seen cuts to their benefit ranging in size from 50%. The Minister made it clear that this cut applies to new signings on, and apparently it does not affect existing young people on Jobseekers. However, this does not account for young people living away from home and there is no doubt that this measure will force many young people to emigrate. The Minister did say that he was making significant allowances to Fas to create many thousands of training places.

It was rather ironic to see the cut in excise on drink with the Minister threatening publicans that if they did not pass it on to their customers he would replace it next year. The scrappage scheme which will come into effect from January 1 next year was greeted with relief by the motor industry which has been haemorrhaging thousands of jobs. Whether this will translate into new jobs in the industry remains to be seen. The carbon tax introduced by the Minister will go towards greening Ireland and working towards elimination of our national carbon footprint.

Two other measures announced by the Minister involve the re-introduction of a property tax and also the re-introduction of water tax which has a very chequered history. Both of these taxes have a very emotional resonance with Irish people though it will take up to two years for these measures to be fully implemented. The abolition of rates on domestic dwellings by former Taoiseach, Jack Lynch catapulted him into one of the largest government majorities ever in Irish political history. Many pundits have subsequently argued that the very size of his majority was the very cause of his subsequent downfall. However, like the water tax the reintroduction of a property tax will have to be judged on its implementation and its effect on invididual householders.

The old age pensioners have done reasonably well with state pensions untouched though it should be recognised that the annual Christmas bonus will not be paid to anyone on social welfare. This in itself is another cut in people's circumstances. The levy on individual items on medical card prescriptions is also a measure which by its very nature will hit the elderly more than any other sector.

This budget was totally lacking in any credible jobs creation measures and was designed simply to balance the national books and restore fiscal credibility on the international stage. It has certainly done that in spades. However, what the country now needs are a series of imaginative and workable initiatives to get our people back to work as quickly as possible. The Ministers comment that we had turned the corner seemed to be wishful thinking judging on this budget but it remains to be seen what is coming down the tracks.