Noonan and Howlin get the excuses in early
Budget 2013 is a reforming piece of work, particularly in the area of pensions and a property tax, believes Finance Minister Michael Noonan. “People have been talking about a property tax all my life since it was abolished in the late-1970s. There has also been a huge number of reforms in public sector and private pensions,” he said at a press conference following the budget.
Mr Noonan said the Government had three objectives for this budget: To stop “piling debt on top of debt”, frame a budget that would not cost jobs and continue with tax rises and spending cuts in as fair a manner as possible.
The Minister for Public Expenditure and Reform, Brendan Howlin, said his objective was to get more out of a shrinking public sector in the face of growing pressure from ballooning ranks of the unemployed, old age pensioners and students.
Mr Howlin said the decision was made that basic welfare rates would not be touched, “which is a remarkable achievement”.
But given that an adjustment of €3.5bn was required, some painful decisions had to be made including cutting the child benefit, he said.
“Child benefit increased a lot during the good years so there was room to bring it down a bit.”
However, next year an expert group would report on how to make savings to child benefit by targeting high earners and less in need of it while protecting the more vulnerable, he said.
Of the €1bn in savings that will be secured over the next two years above what has been agreed as part of the Croke Park deal, €300m will be delivered in 2013 with negotiations on how this will be achieved set to begin in January.
Mr Noonan said maternity benefit was to be taxed to bring it in line with other benefits and to act as an incentive to work.
The decision to put €1 on a bottle of wine was in part a response to young people being able to access low cost alcohol.
Mr Noonan said the new excise duties on alcohol were marginally more punitive on off-licences than pubs. He said the excise yields on tobacco are fragile so the Government decided to impose a lower increase, at 10 cents, than in previous years.
Mr Noonan described the across the board increases on all alcoholic beverages as achievable.
“Consumer sentiment has gone up in recent months. The last increase in spirits was in 2002. Most of the increases in alcohol in recent years has come from vintners and wholesalers who increase prices before the budget and blame the Government.”
According to new commission rules, the European Semester next year means the Government will have to present a detailed budget proposal in October.
“It might be better to deliver the whole thing in October rather than have two months of haggling,” said Mr Noonan.
Mr Howlin said that under the European Semester programme, the full details of the budget are supposed to be debated by all members of parliament before it is presented to the commission. He questioned whether Ireland had the political maturity to do this.
Mr Noonan said last night the Government was close to being able to regain full market access at a sustainable interest rate.
We tracked all of the Budget 2013 announcements in our live blog here
© This appeared in the printed version of the Irish Examiner Thursday, December 06, 2012