Farmers turn anti-austerity
In Ireland’s case, the Commission recommends our Government widening property taxation well beyond residences, perhaps including farmland; reducing high healthcare expenditure; cutting excessive legal services fees; “improving” environmental taxes, and removing environmentally harmful subsidies.
Sizeable short-term savings cannot be achieved without reducing significantly the increase in social security spending, according to the Commission, adding that this implies curbing healthcare and pension costs, for example through setting more ambitious annual healthcare expenditure targets and temporarily freezing pensions”
It is unlikely to be good news for the elderly, coming from an organisation which seems to ignore the rising tide of protest against austerity across Europe.
The Commission’s latest advice will no doubt lift that tide further.
For example, farmers have joined that tide, dismissing the widening of property tax to include farmland as a totally unacceptable and unaffordable imposition on farm businesses. Any further taxes on farming and farm families will be rejected outright, warned IFA President Eddie Downey. Up to now, farmers had been less vocal about austerity, and many of them may even have welcomed the troika’s overseeing of the Government’s management of the economic crisis. But tax on farmland seems a step too far for them.
Nevertheless, at the end of June, EU leaders will discuss the Commission’s recommendations, including broadening the property tax net, and they will be considered by the EU’s Council of Finance Ministers in July, and it will then be up to member states to implement the recommendations when drafting their national budgets and other relevant policies for 2015.
Along the way, Mr Barroso may find that he has taken a step too far for EU leaders.
He served as Prime Minister of Portugal for two years before becoming the EU Commission President in 2004, but it may be that his political instincts have deserted him over the past ten years.
He has ignored the European electorate which at the end of May chose the largest ever number of Eurosceptic MEPs for the new European Parliament.
Barroso says that if politicians show leadership and summon the political will to see reform through, even if it is unpopular, the EU can deliver a stronger recovery and a better standard of living for everyone. But it hardly shows political skill on his own part that even though Marine Le Pen’s National Front achieved a historic win in France, Mr Barroso and his Commission has come down heaviest on France’s tax system and its social and welfare benefits.
Cutting benefits could be a step too far in France, where Ms Le Pen’s National Front topped the European Parliament poll with a quarter of the vote, leaving President François Hollande’s Socialist Party in third place.
Nor will the Commission’s austerity continuation recommendations go down well in Britain, Greece, Germany, and Austria, where anti-austerity and Eurosceptic candidates did well in the elections — well-intended though recommendations may be to help member states out of the crisis and back to growth, improved competitiveness, and job creation.
Directions from the troika helped the Irish government to get some unpalatable austerity measures across the line. But they did so at a time when national bankruptcy threatened. Now that some recovery has been measured, major new measures — like a tax on farmland — are not on politically.
In a time of economic crisis, taxing things that can’t easily move, such as property, is like shooting fish in a barrel. Nevertheless, the Government pulled back from land or site tax, and is not likely to revisit that now. In any case, millions of homeowners were a more rewarding target than about 130,000 landowners.
Even the cabinet moves to include the capital value of farmland in the determination of third-level student grants have been dropped.
Talk of farmland tax strikes fear into farmers, who mostly vote conservative precisely because of such fears. Many of them still remember the backlash against the land tax in the mid-1980s However, that was a income tax rather than a wealth tax.
In those far-off days,. it was designed to replace an income tax system which was leading farmers to downsize in order to avoid tax. Farmers paying land tax only would no longer need accountants, and could invest based on potential return rather than to reduce income tax bills.
Now, of course, the European Commission wants farmers to pay land tax plus income tax.
