From the dismal north to the dismal fiscal deficit of the south…

And if you thought the news from Northern Ireland was depressingly dismal, it’s budget day in the Republic

What is most distressing about the current situation is that policymakers and some economists appear to echo the Dickens character Micawber in ‘David Copperfield’ that “something will turn up,” which is the benefit of a recovery in the economies of Ireland’s trading partners. However, given the severity of the recession, the end to easy credit and the extent of the public debt in the developed countries, there will not be a return to the mainly high growth two decades that preceded the economic crash.

And in the ‘if I were you, I wouldn’t start from here’ class, Morning Ireland starts with Sinn Fein’s view of the budget process and moves on to Niall Collins of Fianna Fail and finishes with Stephen Donnelly weighing into the government’s folly of carrying the burden of two defunct banks and paying 3.5 EURO in the next fiscal year as ‘immoral and economic stupidity’.

In today’s Examiner Colette Browne enumerates what’s popular and it is not what she believes the government has planned for this afternoon:

While the Government is trumpeting its property tax as the most innovative item in today’s budget, tentative plans to increase the universal social charge on incomes over €100,000, from 7% to 10%, were quickly abandoned.

The speed with which this idea was torpedoed shows the Government is completely out of touch with public opinion, after a whopping 88% of people, in a poll in the Sunday Business Post, said they favoured just such a measure.

In fact, of all the questions posed by Red C in the wide-ranging poll, this was the one that received the most support and one can see why.

Instead of the notional money that will supposedly be hauled in from a mansion tax, the USC increase would have netted €200m — a figure that could be relied upon when the Government is doing its maths and trying to balance the books.

Furthermore, as self-employed people are subject to a 10% USC on incomes over €100,000, it seems curious that the Cabinet was so averse to extending that rate to the PAYE sector.

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