Government plays a budget blinder…

Interesting that the British pre budget statement and the Irish budget came on the same day. It’s hard to compare them, since they are not exactly like and like, and both governments are in different stages of their respective cycles. Aside from a major tax hike on cigarettes, the Minister of Finance did the populist thing, and gave pensioners a benefit hike. Fundamentally though, Cowen had the kind of fiscal slack Brown dreamed he would have only a few months back.An old unionist friend told me last year that the only way there would be a united Ireland is if middle class prods wholeheartedly bought the idea. And the only way they would is if it appealed to their wallet. Hmmm… After yesterday’s announcement the higher tax band for income tax is now 41%. And further the PDs have made it clear they are after another one point cut after next year’s election.

Tax relief on first time mortgages will help some, but not most who will just struggle to make the burgeoning asking price. Although it’s questionable whether owning your own home is now, as independent TD Tony Gregory put it, ‘a basic human right’.

Generally the opposition failed to land many clean blows (subs needed) – a reflection perhaps on the paucity of thinking on the opposition benches as to any flawless performance on the part of Brian Cowan (or Biffo according to the Irish Times’ Miriam Lord).

The Sinn Fein leader in the Dail, Caoimhghín Ó Caoláin was forthright in his criticism of the government, saying, “You have failed once again to use a golden opportunity to make a critical difference in the lives of those who depend on you most.” But he signally failed to produce any analysis of what they had actually done wrong. Bad memories of that painful learning curve perhaps?

The Green Party finance spokesman Dan Boyle had something tangible to throw at the government (buying out of Kyoto?):

A total of about €300 million would be spent on environmental issues, but “90 per cent of that money will be going out of the country in environmental fines as the result of the failure of ongoing Government policies”.

That €270 million “could have been producing jobs. We could have looked at the area of the recyling industry, energy technology industry. But the Minister is choosing to pay the fines rather than doing work to improve our environment.”

Clearly, if Miriam Lords’s sketch is anything to go by, Fianna Fail see themselves as favourites for re-election in June:

Packed with financial firepower, the Government togged out yesterday expecting a good result. Biffo didn’t disappoint. As Budget 2006 moved into its final stages, his backbench cheerleaders relaxed and got giddy.

By their reckoning, they were five goals up with full-time looming, facing an Opposition forced to play with no studs in their boots.

When the final whistle came, the backbench supporters jumped to their feet and celebrated. Across in the Opposition dug-out, players steeled themselves for the moral victory.

They couldn’t have cared less on the Fianna Fáil benches. (Their PD partners appeared less euphoric.) Junior Minister, Conor Lenihan, punched the air. “Ten more years!” he cried. “Folley that!” chortled Tipperary’s Noel Davern.

Whereupon the bulk of the FF backbenchers took themselves off to the bar for a lap of honour, unable to contain their glee long enough to extend the Opposition’s finance people the courtesy of a hearing.

Ach, it’s tough at the top. But as Lord notes, there was a slightly jagged note in all of this triumphal processioning:

“…when Brian announced the pension increases, even Bertie couldn’t help hide a satisfied smile. The old Dublin mammies will love him even more. After an hour, Mr Cowen sat down, applause ringing in his ears. He looked slightly embarrassed. Bertie turned and took Biffo’s hands in both of his.

It was lovely. And then Conor roared: “Ten More Years!” They knew the moment couldn’t last.

There is still six months to the polls Conor… The words cup, slip, and lip come to mind…

Fianna Fail fingers all crossed on the ongoing health of the Irish property market…

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  • George

    Mick,
    It is amazing the position Cowen was in. Revenue took in more in tax last month (10 billion) than the whole of 1990, for example.

    He is affectionately called Biffo by a lot of people, by the way, and has already announced that the top tax rate will drop to 40% next December if Fianna Fáil get re-elected.

    Basically, it seems FF are claiming that one as their own.

    Donie Cassidy (FF) was on RTE after the budget saying the Greens or Labour could be potential coalition candidates but that the PDs were still preferred.

    Good call on doing nothing to the stamp duty in the current property environment. The mortgage relief deal affects 125,000 people so is a smarter move.

    The OECD have called on the Irish government to remove mortgage relief but I remember Cowen laughing at the suggestion. It would be political suicide and he knows it.

    A little bit for everyone here. CORI at one end are happy and the Small Businesses Assocation at the other are also content.

    Pensions up to 209 euros a week while an unemployed couple with two children will get around 2,500 euros more in 2007 than they did in 2006. That seems pretty hefty.

    As for the property market, no point second-guessing it.

    One day, our goose is cooked, the next we are hearing that another 100,000 immigrants will be around next year needing accommodation so another 80,000 houses will be built while the ones that came in 2004 have got the “Irish bug” and want to own their own houses.

  • Greenflag

    Mick ,

    ‘There is still six months to the polls Conor… The words cup, slip, and lip come to mind… ‘

    Six months ? Well you might think that but I could’nt possibly comment 🙂 . Bertie will be out on the hustings and and back in office before the opposition knows what’s hit them 🙂

    Excellent Budget – Who now remembers hairshirt advocating Richie Ryan or taxing children’s shoes Bruton or even Mac the ‘Knife ‘ MacSharry .

    It’s the quiet unassuming Biffo the down to earth Midlander who has ‘delivered’ .

    The Rabbitte has been routed -and Hare Kenny has lost the race . Sargant is green with envy and SF got an introduction to the practicalities of economic policy in a functioning democracy .

    And now for the Gordon ‘ye can’t have your haggis and eat it ‘ Brown’s effort to bolster flagging Labour hearts 🙁

  • Kloot

    Im quite happy myself with the budget yesterday. Ive a good few extra pennies in the pocket each month after it.

    Ive never voted Fianna Fail in my life. Always detested them, but I just cannot bring myself to vote for the circus line up that is the opposition. They are a joke, a complete and utter shambles. Reactionary politics at its worst. I still havent forgot the “lets compensate the Eircom shareholders” or the “lets compensate the Taxi Driver” statements.

    Kenny lacks charisma. He has none, even Biffo Cowen has more then him and that says alot. FG keep telling us that eventually we will get to hear their policies, but for the moment, were being told that we will just have to put up with the line that “were against anything FF are for”.

    In this day and age, do politicans really think people are going to vote for them just because the little leaflet that they handed out in the DART station says “Vote for Change, vote for Xyz”. People are expected to vote for these muppets, just because it says so on a leaflet… Is it too much to ask for some policy statements.

    Such as:

    1. What are you going to do about reform in the public sector
    2. What are your plans and policies for reforming the health care system, exact plans.
    3. How are you going to get my tax bill down. What are your tax plans
    4. What are you going to do about the energy market, why are my gas and ESB bills going up 20% a year.
    5. Childcare

    And so on, so on.

    Yes, it used to be as simple as a knock on the door to introduce yourself as the local FG/FF/LB candidate, and sure dont you know me well, im a son of your last TD. And that was enough cause me da voted FG and his da voted FG so im gonna do so too.

    Now we have an educated electorate, who will fluctuate based on which party promises the most, and which one is the safest hands for the economy. Better the devil you know is the order of the day.

    So, yes, Im happy with yesterdays budget, will I give em my vote to keep them in power… no, not yet, but will I give the opposition a vote to get them in… not a chance, so what to do…anyone for a spoilt vote.

  • smcgiff

    Interesting that a married couple with two kids on €45k income effectively pay no tax. The tax they pay is refunded in Child benefit.

    My personal pick up was a few quid short of €1,500 thanks to budget 2007.

  • The Devil

    Has the budget stores not closed down

  • Donnacha

    ““Folley that!” chortled Tipperary’s Noel Davern.”

    Surely the correct version would be: “folly, that.”

  • Henry94

    Donie Cassidy (FF) was on RTE after the budget saying the Greens or Labour could be potential coalition candidates but that the PDs were still preferred.

    If FF can make the election about who their partners in government should be then it’s bad news for the blueshirts. And realistically that is what the election is about.