Over 11,000 residents of Dublin 15 face a cut in their weekly social welfare benefits next week as the cuts announced in the budget take effect. All recipients of social welfare payments under the age of 66 face a cut of more than €8 per week in their benefits from the beginning of the year. These include 11,581 recipients of the jobseekers benefit, jobseekers allowance, the one-parent family payment, carer’s allowance, illness benefit as well as recipients of the widow’s pension, maternity benefit and blind persons pension. In addition to these, the parents of the 24,000 children in Dublin 15 will have their Child Benefit cut by €16 per month. In total, €7.4 million will taken out of the pockets of Dublin 15 residents and the local economy in 2010.

‘I accept that €4 billion had to be cut from government spending in the budget. The government’s attempt to raise more money through higher income taxes, VAT and excise in the previous budget turned out to be counter-productive. However there were choices as to how the €4 billion in savings could be achieved. The government made the wrong choices. They could have implemented the Bord Snip recommendations on the rationalisation of state agencies, quangos and cuts to administrative spending. This would have saved €750 million. If they had done this, the cuts to child benefit, carers allowance, the blind persons pension and the illness and disability benefits could have been avoided’, said Deputy Varadkar

‘Over the past ten years, Fianna Fail used the temporary windfall in taxes from the construction industry and banking to fund increases in pay, pensions and benefits. Last year, these industries collapsed and the tax take collapsed with them. Since then, the government has already borrowed €30 billion to replace these lost taxes and to keep the money flowing. The pay and welfare increases that occurred during the Bertie years were never sustainable. Indeed, Fine Gael spent most of the last five years warning the government and public that it would all end in tears. Tax increases and spending cuts will be necessary over the next few years but there are still choices to be made. The government should target wasteful spending and administrative costs before touching benefits or increasing taxes.’

…[more]

Mystic Minister’s Crystal Ball must be cracked

Finance Minister Brian Lenihan’s Budget claim that the economy has turned a corner looks totally wrong after both the construction and retail sectors have slumped for another month, Fine Gael Enterprise Spokesman Leo Varadkar TD said today (Tuesday).

“Minister Lenihan surprised many when he claimed in his Budget speech that the economy has turned a corner. Two days later, the retail sales index showed another fall of 9.1%.

“And this week the construction sector slumped again, with the Ulster Bank index falling still further. This sector is likely to contract even more after Brian Lenihan pulled the plug on the Government’s capital investment programme in the Budget.

“This isn’t the first time that Minister Lenihan has got it so wrong:

• During the debate on the NAMA legislation, Minister Lenihan claimed property prices had stabilised, yet they have continued to fall;

• When he brought in the bank guarantee, Minister Lenihan said Irish banks were strong and well-capitalised. But billions of euros have been poured into the banks to keep them afloat.

“Minister Lenihan’s record on economic predictions is appalling. I think he should take his crystal ball back to the manufacturer.”

Jobs, jobs, jobs must be at heart of next Budget

Fine Gael Enterprise Spokesman Leo Varadkar TD has warned that Ireland is on the cusp of a long-term unemployment timebomb, which according to the CSO has shot up by 55% in the last 12 months.

“Ireland is already grappling with the return of emigration and widespread joblessness. We are now also facing the return of long-term unemployment, with the CSO revealing a 55% increase over the last 12 months.

“Fine Gael is the only Party to set out concrete and effective proposals on jobs. But Fianna Fáil has ignored repeated calls from Fine Gael to develop a strategy to retain existing jobs and create new ones. The Government has one last chance to make amends by putting jobs at the heart of the next Budget.

“Ireland now has the second highest unemployment rate in the eurozone. That is why the Budget must introduce a comprehensive package of jobs measures, including Fine Gael’s proposal to cut employers’ PRSI, avoid cuts to the capital budget, and freeze all Government-imposed charges on business.”

There was an article in the Irish Time’s last week entitled “Wealthy Pay Most Tax? This simply is not true” by Anne Costello of the Community Platform. I sent a letter to the editor which I include below.

Madam

Anne Costello of the Community Platform makes a valid point when she says that €1 billion could be raised by reforming the tax relief regime which allows many high earners to avoid paying their fair share of income tax. However, the bulk of her article does not stand up to scrutiny and I am surprised it was published.

She says that a third tax band of 48% for single person incomes over €100,000 could raise up to half a billion in 2010. The correct figure is €375 million. She estimates that increasing capital taxes to 30% from 25% could raise another half billion. This is total non-sense. Only €452 million has been raised in capital taxes in the year to October. Receipts have more than halved since last year even though the Minister increased the rate in the Emergency Budget. She then goes on suggest that abolishing the PRSI ceiling, a carbon tax, a tax on land, a wealthy levy and a small increase in corporation tax could make up the remainder of a seven billion package of tax increases. She gives no figures to support this.

She also seems to miss the bigger picture. The budget deficit is not €7 billion. It’s €23 billion. A return to growth might erase some of that, but we would still be looking at a structural deficit of about €15 billion that will have to be closed through tax broadening and lower public spending. Even if Ms Costello’s €7 billion tax package stood up to scrutiny, she would still need to find €8 billion in cuts. An article from the Community Platform on that topic would indeed be interesting.

Yours etc

Leo Varadkar TD
Leinster House
Dublin 2

Madam, – Fintan O’Toole (Opinion, July 21st) is right to draw attention the background, instincts and ideology of the members of “An Bord Snip”. In doing so, however, he betrays much of his own ideology and flawed orthodoxy.

He contends that the economic crisis was caused by “the banks and developers”. This is facile. The banks and some developers certainly share much of the responsibility for this crisis, but absolving all others does not stand up to scrutiny. This is particularly true of the crisis in the public finances which he argues are merely “a function of the real economy”. …[more]

€7,700 more tax on families since last October

Pay packets have shrunk further this week as Brian Lenihan’s latest round of tax cuts hit home, with the average family now paying €7,700 more tax compared to 12 months ago, Fine Gael Enterprise Spokesman Leo Varadkar TD said today (Friday).

“Hard-pressed employees on monthly salaries and their families are seeing further cuts in their pay packets this week as Brian Lenihan’s double income levy, pension levy and health levy hit home.

“The average family is now paying €7,700 more in tax since last October as a result of Fianna Fáil’s two emergency Budgets. A one income family with one child under five and a mortgage is paying €4,600 more as a result of Brian Lenihan’s last emergency Budget, on top of the €3,100 in new taxes and charges imposed last October. This represents a 12% fall in income this year for a middle income family.

“Instead of reforming Government and making long-overdue savings and reforms, Fianna Fáil chose to penalise taxpayers and their families in the last two Budgets. Not only is this unfair, it will also damage the economy by taking money out of circulation.
…[more]

The emergency Budget will tax people out of their jobs and on to the dole queues, according to Fine Gael Enterprise, Trade and Employment Spokesman Leo Varadkar TD.

“The Emergency Budget should have been about reducing spending and protecting jobs. Instead, Fianna Fáil has decided to tax people out of their jobs and push them on to the dole queue. The Budget will make the economic crisis much worse, and it is now likely that over half a million people will be unemployed by Christmas.

…[more]

As part of the Fairer Budget campaign, I will be at Carlow Town Hall meeting this coming Monday.

It’s taking place at the Dolmen Hotel in Carlow at 8pm.  To date, there has been a great response at the meetings which are taking place around the country, and there has been a phenomenal interest in the website, so if your from that part of the country and are interested in hearing Fine Gael’s alternative, your please come along.

For more, log onto Fine Gael’s new Fairer Budget site