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Thursday, January 1, 2009

Brian’s Big Budget starts to hit home.

Happy New Year! Or maybe on second thoughts commiserations, we’re here in 2009. After the pre-Christmas gloom and the festive cheer we’re where Brian Lenihan and Brian Cowen wanted us in 2009. I wonder last October were they at one stage counting down the days to January 1 so that the budget increases would take hold?
Lets look at a few and see how they may pan out. Well the increase of excise duty on petrol looks on the face of it to be painless however that combined with the currency crisis, another problem that FF and the Greens have ignored and hope will go away has eroded the competitive edge on petrol and now forecourts along the border are rapidly becoming quieter places. At its height this trade brought in an extra €100M to the coffers. The extra 0.5% VAT increase came in a month ago and it will add to inflation and while I accept that the figure in January should be down because of the sales and reduced demand, it will have the effect of increasing some prices at a time when incomes in PAYE households are going in the opposite direction.
The €100 A&E charge came in at midnight. Initially it’ll have the effect of making people think twice about going to A&E if you haven’t got the medical card and also sending patients first to the GP’s to get a letter of referral so as to avoid paying the charge. As sure as light follows day once GP surgeries are choc-a-bloc they in turn will raise their charges to €100 too so as to reduce pressure. Other charges for long stay patients will rise too by 26%, these apply in long stay hospitals and for those in psychiatric care.
Health expenses are now only allowable against tax at the standard rate, thus saving €120M. 50 cent was also added to a bottle of wine and while in supermarkets you can get 3 bottles for €20 up north you can get 3 for £10 or almost €10.
The 1% income levy on all incomes also kicked in at midnight. I believe that the Revenue Commissioners were making quiet inquiries about whether some on the €20 border line may in fact be above the limit thus catching them in the net. Meanwhile if you’ve a family business there’s always the loophole where you can transfer your business earnings to other family members engaged in the business and hey presto everyone in the family is below €20K thereby avoiding the levy. While you’re at it claim rent-a-room tax relief on money handed up by family members towards their keep!

Another major plank courtesy of the Green Party is the tax on parking space at work. While private employers may be entitled to charge €5 per annum for the parking space thereby ensuring the employee won’t have to pay the charge it’s highly unlikely that public servants will have such a benevolent approach from the minister for the Public Service who is one Brian Lenihan TD.
It won’t be too long until tax equity once more becomes an issue in the Irish work place. Loopholes are there to be exploited and the more taxes or levies FF & The Greens bring in, the more work there is for accountants to creatively shelter the cash from the perfect fiscal storm that threatens. PAYE workers have no such sanctuary for their earnings, even if you put into an account DIRT has gone up by 3% to 23%.
The new payment regime for child benefit with respect to those over 18 in full time education starts today, so this year it’s half the rate while next year it’s nothing!
Equity is a buzzword for FF and the Greens and their charges reflect this. No matter how old or young your patriotic duty requires sacrifice. So, it’s goodbye to the Early Childcare Supplement at 5 and a half. Not to mention how schools will be affected by education cuts. Farmers young and those hoping to retire, as well as those in disadvantaged areas are cut too. Labour has not in the past reached out to the farming community, given that the multi-nationals can move abroad while financial services can go down the swanee, should we not pay more attention to agriculture and its potential?
So sorry to have brought you back to the real world with a bang, 2008 may well be looked at with some benevolence in years to come judging by the way that Fianna Fail and the Greens leave it till the last moment to notice that they’ve made the mess as big as possible!

2 comments:

Susan said...

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.


Susan

http://www.car-insurance-choices.com

Joe said...

Thank you for your comment, Happy New Year!