Hardest hit will be hit hard... again
The sixth successive year of austerity for the beleaguered Irish people, and the harshest so far, begins on Wednesday when Finance Minister Michael Noonan delivers Budget 2013. For tens of thousands of struggling families, next year promises to be ominous.
Despite Coalition spin about leaks, the dogs on the street know the broad outline of what is coming down the track: Property tax, higher car taxes, costlier fuel, dearer alcohol and cigarettes, pension pot taxes, paring back benefits for rich pensioners, a mansion tax, child benefit cuts, plus a crackdown on free travel fraud.
Ireland needs a more progressive tax regime, based on principles of equity and fairness, especially as the weekend demonstrated that the existing system lacks the philosophical framework to radically transform this country’s regressive taxation regime characterised by a laissez-faire approach to budgeting aptly described as “salami slicing”.
Last-minute policy-making on the hoof led to heightened tensions among ministers as Fine Gael and Labour haggled over questions of welfare cuts as opposed to the imposition of higher universal social charges on the better-off. Unsurprisingly, tempers flared as the interests of the wealthy were protected by Fine Gael while Labour sought to defend the more vulnerable in society.
If politics is the art of the possible, the result was a compromise in the form of yet another Irish solution to an Irish problem, namely a “mansion tax”. Ideologically pleasing to Labour, it is unlikely to shore up the country’s finances.
On the controversial issue of a property tax, Social Protection Minister Joan Burton, confirmed on RTÉ’s This Week programme that a proposal to enable older people defer payment until they die is being examined.
On the equally contentious question of child benefit, while she favours taxing payments, that will not be on the cards until the necessary IT systems are in place within a “relatively short period of time”. Meanwhile, Ms Burton stresses the importance of keeping universal child benefit payment “at a high level” for caring mothers. In other words, child benefit cuts seem inevitable.
No doubt Taoiseach Enda Kenny and the Government will be lauded by the IMF and Germany for putting the final pieces of a six-year austerity programme in place. But if anyone deserves praise, it should be lavished on the Irish people for their patience, fortitude, and tolerance at a time when their counterparts in other countries were rioting.
They have played the major part in rescuing Ireland from a fiscal debacle not of their making but caused by rudderless politicians, greedy bankers and reckless developers. You can be sure highly paid politicians, who receive unvouched expenses and will get publicly funded pension pots, will not suffer unduly under the burden of Budget 2013. It is the plain people of Ireland, many of them struggling to survive on a basic welfare rate of €188 a week, who will suffer most.
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