Irish budget cuts praised by British Tories but criticised at home

To be fair, I was praising the courage of the Irish government rather than heralding every single policy as the greatest thing since sliced bread.

They had the balls to stand up in front of the Irish people and admit that (a) they’re screwed, and (b) they need to take drastic measures to get themselves out of this mess. What I would give for the British government to do the same.

Savage Irish budget cuts praised by British Tories but criticised at home: http://is.gd/5hMKu

They didn’t attack the poor by putting up VAT though did they? They cut VAT. Darling raised a regressive tax. Anything to say about that?

Let us be under no illusion the conservative party exists to protect and promote privilege and the wealthy, all else is window dressing.

Guido VAT was not put up its temporary reduction was ended in line with the announcement that cut it. It was Thatcher who pushed it through the roof

Guido, weren’t you one of the biggest critics of the VAT cut? (As were the Tories) Don’t recall much praise for Darling when he made it.

Guido,

The Irish raised VAT and other duties back in April.

RT @leftfootfwd: Savage Irish budget cuts praised by British Tories but criticised at home: http://is.gd/5hMKu

VAT isn’t regressive, this is a bizarre myth which now seems to unite both left and right. Poor people spend most of their money on things like rent, food, heating, bus tickets and clothes for their kids, which aren’t subject to VAT, or else which are not taxed at the standard rate.

Some indirect taxes are highly regressive (alcohol and tobacco duties especially, petrol to some extent – in rural communities especially – but we accept those for different reasons). Cutting income tax at the lower end would be more progressive than cutting VAT for people in work, and you may wish to adjust benefits accordingly.

In an economy where we consume too much and produce too little, there’s a really strong argument in the medium term for raising taxes on discretionary spending, and cutting taxes on investment and labour.

The point stands, though. Ireland’s agenda of cutting its way out of a recession will only work if the world economy recovers and companies move to Ireland. It probably won’t work for them, and it physically can’t work for a large country like Britain where most of our jobs are internal to our economy, and public spending cuts in a recession would just mean more lost jobs in both the public and private sectors, a fall in demand in the economy, a further round of private sector job losses, and a second wave of the downturn.

[...] What’s more absurd is that the government can’t even rebut the opposition. The Tories have been praising Irish attempts to reduce their spending, without acknowledging the deep shit Ireland is in as a result. [...]

What are the tax rises being put in place? It strikes me that if they’ve done things properly, they may be out a hell of a lot quicker.

This is what the ICTU (Irish Congress of Trade Unions) thinks of the budget… a slightly different take to the Tories:

THE BUDGET OF NO HOPE
Share
Today at 10:10am

Congress has condemned Budget 2010 as “too brutal, too quick and utterly without compassion.”

Congress General Secretary David Begg said: “It offers no hope whatsoever to anyone. It will deflate the economy and will guarantee more job losses. We can also be certain that emigration will once again become a major feature of Irish society.

“I think they have pushed us closer to the cliff and once we go over there is only one direction we can go. Far from the worst being over, it is almost certain that the worst is yet to come.”

Mr Begg said Budget 2010 was marked by a “criminal neglect of any serious initiative on jobs and job protection.”

He said Budget 2010 “attacks working people, attacks the young, the unemployed and the low paid. It takes from those most in need and seeks only a minimal contribution from the wealthiest in society. In fact, changes in the tax regime for the richest act only as a fig leaf for this assault on working people and the vulnerable. It punishes people who are unemployed.”

Mr Begg said the harsh measures contained in Budget 2010 would do untold damage to the social fabric of the country and contrasts sharply with the practice elsewhere in the EU “where Governments are increasing social protection to maintain living standards. Yet our Government is stripping away layer after layer of social protection at a time when people need it most.”

Liz – Well they would say that, wouldn’t they?

Vested interests as usual…

Thomas,

Back in April:

The rates of the income levy – which is a way of raising taxes in the middle of the tax year – will double while the threshold at which each begins will be lowered.

The new rates will be 2%, 4% and 6%, and the new thresholds will be 15,028 euros, 75,036 and 174,980 euros respectively.

Mr Lenihan said tax on cigarettes would rise by 25 cents per packet but there would be no increase in duty on alcohol or petrol as he was concerned any rise would lead to a loss of revenue.

And the rates of Capital Gains Tax and Capital Acquisitions Tax is being increased 25%, effective immediately.

[...] rest is here: Irish budget cuts praised by British Tories but criticised at home … By admin | category: Object | tags: antiwar-newswire, british, british-right, [...]

Irish budget cuts praised by British Tories but criticised at home http://alturl.com/ommg

Anon – Vested interests? If you mean representing and protecting the lives & outcomes of lower paid workers etc then yes. But it is hardly the same type of vested interests as big business and certain property developers and bankers who seemed to have escaped to sunnier climes.

Let’s remember that in 1979 the Tories spent the election campaign denying they’d vastly increase VAT (a ‘Labour Lie’) – then did precisely that when they formed a government. Attacking the poor, as Guido put it.

Liz – On the lower paid workers you’re preaching to the converted.

As for the bankers in the UK escaping to sunnier climes remember our government is the one who bailed the banks out.

I have a theory Liz. The banks profits/long term sustainability collapses due to dodgy overseas investments. The shares drop in value. They get bought by a more powerful bank.

It used to be called Capitalism and it’s a shame the markets weren’t just left alone. Then we wouldn’t own banks as taxpayers.

I want my taxes to pay for hospitals, schools, armed forces. police forces – whatever. I do not want to own any banks.

Your main point though – I disagree with the union opinion. We don’t live in a Soviet state – hard to believe with Brown at the helm I know but how long can we keep recklessly racking up the debt?

The poor will have to pay it back Liz I guarantee it.

Henry – Quite agree with you. Most people don’t realise (overall) taxes were higher and went UP under the Tories…

Anon – re the bankers & property developers – I am not talking about a bail out as per the UK but key individuals close to high level people in FF who had a penchant for using lots of brown paper envelopes etc. Loop holes in the law have allowed them to remain scot free on the Costas while others pick up the slack.

To be fair, had there been an election coming up in Ireland we might have seen something more like Alistair Darling’s fudge. “Give me fiscal continence, Lord, but not yet”.

“By cutting spending

b) store up bigger fiscal problems down the line.”

a) in the very short term, yes. Whether growth is lowered over a longer period depends on the productive forces, pretty much all non-governmental, in society. You’d expect these forces, all things being equal, to get stronger where the state is soaking up less cash. Within limits, of course.

b) CAN Ireland create bigger fiscal problems with what it’s doing than it would have if it continued spending money it hasn’t got ? If they’d stayed as they were they’d have been unable to redeem debt at repayment time except by issuing new debt – and the new debt would have to be issued with a high interest rate because of the perceived increased risk of default. Those extra interest payments would themselves impact on govt finances and increase the risk of default – a vicious spiral.

“Alistair Darling made the tough choices necessary to halve the deficit over the next Parliament yesterday”

No he bloody didn’t ! What he announced won’t go anywhere near ! Michael Saunders of Citigroup :

In our view the PBR seeks to create a fiscal fiction that the deficit can be resolved solely by tax hikes on a relatively small share of the population (’the few, not the many’) and without painful public spending cuts. The revenue forecasts again look over-optimistic, and there are no public spending plans after 2010/11 — only vague forecasts. The Chancellor pledged to protect spending on health, schools and the police, but gave no sign where the axe will fall. Given the record of recent years, this lack of clarity is likely to fuel scepticism whether the Chancellor really is committed to spending restraint.

What distresses me is that this Labour administration has overseen a collapse in UK manufacturing which dwarfs that which took place under Thatcher. The latest closure, of the Corus plant on Teeside, seems to be wholly driven by

a) the value of the EU carbon credits Tata/Corus can sell off (or transfer to their Dutch plants)

b) the value of the UN carbon cash they can get for building plants in India with identical carbon footprints to Redcar.

Labour’s motto is “Globalisation in One Country”

[...] Jump to Comments Minds far more intelligent than mine are running away with the intellectual ball on the PBR. Perhaps the strangest contrast yestoday was the difference between that the Government proposed [...]

Liz – Misunderstood your comment. You’re right and the point is a good one.

Sorry for that.

Anon – i also meant to add the relentless number of tribunals involving business people and high lvel politicians over the years and to top it the revelation that bertie ahern didn’t have a bank account!!

Some of the budgetry measures you have in your blog are incorrect.
Below is a link to the full Budget speech for the correct version.

http://www.budget.gov.ie/Budgets/2010/FinancialStatement.aspx

btw, I loved your successful effort at relief during your assessment, as in “The Irish, egged on by the Tories, have instead opted to…. etc. etc.” Luv it! :0)

Liz – Ahern didn’t have a bank account.

Perhaps that’s why he had €50,000 in a brown paper bag that he gave to his daughter – what else was the poor man to do?

The thing stinks!

Anon – read this. It may just be an urban myth re Ahern’s lack of bank account – but it has been reported quite widely and not just in the red tops… but it seems staggering beyond belief given that he was also Minister of Finance before he became Taoiseach.

Oops forgot to add the link – here it is:

http://www.independent.co.uk/news/world/europe/bertie-ahern-the-teflon-taoiseach-who-came-unstuck-804034.html

Liz – Where abouts in Ireland are you from?

Co. Down

Liz – Never been there I’m afraid. My family’s from the other side of the border – Tipperary – but I got friends from the North, worked there once or twice and to be honest, religion aside(which I have no time for), people to me seem to be the same the world over.

Have a good weekend woman (I just know that ‘woman’ bit will grate!) and I’m sure we’ll be disagreeing again next week.

[...] But of course I can never bring myself to agree with the Tories too much. Given the Tories allergic reaction to the mainstream economic opinion on the benefits of stimulus spending it seems foolish to suggest that if they were in power we would see a glut of countercyclical spending. In fact we would still have been treated to a Government reaction and economic collapse like that seen in Ireland. [...]

Anon – what border?! Been down south loads inc Tipp.

Liz – Nice point well made…

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