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Severe Irish Budget will witness drop in living standards

Budget 2011 unveiled

MOLLY MULDOON,

IrishCentral.com Staff Writer

Published Wednesday, December 8, 2010, 5:38 AM

Updated Wednesday, December 8, 2010, 5:48 AM

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Irish Minister for Finance Brian Lenihan holds a copy of the Budget 2011 document

Photo by (AP / Peter Morrison)

Families, middle income workers and social welfare recipients are set to bear the brunt of this years Budget, judging from the €6billion ($8 billion) fiscal adjustments announced yesterday by the Minister for Finance Brian Lenihan.

The first move as part of the four-year recovery plan will witness a four percent reduction in most social welfare payments, an increase in petrol and diesel prices and an increase in income tax across the board.

Members of the Irish parliament last night voted 82 votes to 77 in favor on the first motion of the Budget being passed.

With the introduction of the new tax measures a middle income family could lose as much as €300 ($396) a month.

The main elements of Budget 2011 are as follows:

Tax bands and credits will be reduced by 10 percent, resulting in more earners paying the standard and higher rates of tax.

Child benefit will be cut by €10 ($13) for the first and second child and cut by €20 ($20) for subsequent children.

The €10 ($13) airport tax is to be reduced to €3 ($4) in an attempt to attract more tourists into the country.

Job-seekers', carer's and disability allowance will be reduced by €8 ($10) per week.

The Prime Minister will suffer a €14,000 ($18,000) reduction in his salary and Government Ministers will see a cut of €10,000 ($13,000).

Public service and semi-State agency salaries will be capped at €250,000 ($330,000)

The current stamp duty regime will be reformed and a flat rate of one percent will be applied to all transactions of residential properties valued at up to €1 million ($1.3million).

The minimum wage will be reduced by €1 to €7.65 ($10.10).

Overall there was no change to the State pension but those receiving public service pensions above €12,000 ($15,000) a year will be reduced by an average of four percent.

Ministerial and State cars will see their fleet reduced by over a third over the coming two years as former office holders such as ex- Prime Ministers and presidents will use a car-pool system.

One of the two Government jets will not be replaced.

College registration fees will rise from €1500 to €2000 ($2642).

A work placement and training scheme will be unveiled for graduates and the unemployed .

Taxes on cigarettes and alcohol remain untouched but the price of a liter of petrol and diesel will rise by 4 cent and 2 cent.

The Minister announced there will be no change to Ireland's 12.5 percent corporation tax rate and the existing three-year corporation tax exemption for new companies will be maintained.

Speaking during the Budget presentation, Mr Lenihan acknowledged that this had been a “traumatic and worrying time” for Irish citizens.

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Watereskhill | Dec 09, 2010, 11:50 PM EST

When we make a pot of soup and wave to the neighbours we will be Irish once again. Rich in connection to what is at hand and across the hedge. Our grandparents came through worse. Didn't need an I-Pod or Government hand-outs to make a life. As the Architect Mies Van de Rohe remarked "Less is More".

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Searlit | Dec 09, 2010, 11:43 AM EST

These actions have a ripple effect on people's ability to earn and spend. While this may seem okay to anyone who is not effected now. It will creep up and level the playing field on anyone that is middle class or upper middle class, in a few years time. This is what's been happening in America. If you don't protect other people's rights, inadvertently, you will begin to lose your own. It goes along with "Save for the Grace of God go I." Don't work against each other.

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sirpeter | Dec 09, 2010, 07:21 AM EST

@seamusmoore..ha ha..Proud to be a Cork rebel.Better then been a Kerry animal..We just invented Viagra for the rest of the world so they could have hardons like Cork people.Anyway you are just jealous we won the Sam Maguire Cup and don't tell me how many times ye won it, because Kerry and Kilkenny won nothing till ye win the double.

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sirpeter | Dec 09, 2010, 06:58 AM EST

Katy..You keep looking at things just from your own perpective.In most western countries you have approximately 10% living on or below the poverty line.Naturally enough a 5% drop in living standard to those people is going to be felt much more deeply.Kate judging by your telling me that you have a '98 vehicle and haven't brought a new car in ten years,tells me you are in a minority and you say that the vast majority are like you and i'm on another planet..it's just not true.I understand fully what you are saying about the injustice of hitting those who need every penny to just keep going.But the vast majority of the Irish people were each spending and this is a very rough guess...about €10,000 to €15,000 a year on things that were pure luxuries..ie new cars just to up the year..going on more then one foreign holiday a year...a fortune on new clothes that were also not needed ect.That spending and borrowing could not be sustained and that's what the government is stopping.

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jacersagain | Dec 08, 2010, 08:12 PM EST

BTW kateo - if you're driving a '98 vehicle that’s about to go on the blink, may I suggest you discard it before it kills you or someone else?

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jacersagain | Dec 08, 2010, 08:00 PM EST

Ah now now now kateomprint! ... Get some things in perspective please. I think sirpeter is right on this issue... All what the present coalition partners of Irish Government is doing, and what the future coalition partners of Irish Government are realising what they will have to do, is that unless we drop our wage demands and aspirations to standards of living that we as individuals and as a country cannot afford, is that we are not going to be able to compete with other countries of the world for business (the Joneses of the famous phrase "Keeping up with the Joneses" have been bankrupt for a long time; would you pity their children? Well, go on and say it, would you?) Everything is relative. Did you ever hear the expression "Pricing one's self out of the market"? Earn what you work for; fight for what you are entitled to; forget about fighting for what you don’t deserve, is what I'd say. As some wise one said “It’s better to live and let live than not live at all” That's where you will get your justice in all of it. Not by being a free money sucker, crying out loud for a free right to your fellow country's workers' tax money. Earn your right to money, home, heat and sustenance.

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kateomprint | Dec 08, 2010, 06:00 PM EST

sirpeter i have come to realise that you are not living on the same planet as the rest of us. I haven't bought a new car in the past ten years . I drive a 98 which is about to go on the blink. They cut blind pension and people with disabilities who really have no hope of ever getting into the workforce. I don't mind that they have cut the jobseeker's benefit because these are people who are able bodied and have some hope of either going abroad or getting employment but what chance does people who are blind or with a disability. Also carers allowance have been cut. These carers ar the people who help to keep elderly people in their own homes which the elderly want. These carers save the state billions every year and instead of rewarding them they cut the meagre allowance they get. Our Finance Minister has been voted one of the worst in the world and I agree. Our Government have no concept of what it is like to survive in a small business. One of our Ministers is now about to retire at the age of 55 on a pension of approx. €2500.00 per week. Where is the justice in that.

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kilkenny999 | Dec 08, 2010, 05:31 PM EST

vote sinn fein into power,and put the cat among the pidgeons,that will sort it.

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Dublinjas | Dec 08, 2010, 02:03 PM EST

I don't think you guys realize. This is just Part 1, there is at least 4 more harsh budgets Harder than this one to come. No wonder Governments like this get Elected, With THICKS like you being allowed to vote.

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seamusmoore | Dec 08, 2010, 12:47 PM EST

@sirpeter I suspected you were a Cork hoor, glad you confirmed it. Do you know why Pfizer built their Viagra manufacturing facility in Cork? Their adviser was a Kerryman, who told Pfizer "there were more hardons on Cork, than anywhere else in Ireland."

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sirpeter | Dec 08, 2010, 12:05 PM EST

@monaghanjack..Get a grip..It will only work out at Three or Four grand a year for most people.We will just have to not buy that new car or cut down on that extra holiday in the sun (well not me anyway i'll still be going.And those who have to leave..it's good for them... broaden their horizons by working abroad for a while,most of them have collage degrees,not like in the 50's.I worked in London myself for a while in the 80's...rented a two bedroom sh*thole town house for 95 pounds a week in another sh*thole that goes by the name of Walthamstow.Great experience..spending 2 hours a day on a smelly tube to get to work,kissed the ground at Cork airport when i got home and swore never to complain about Ireland again.

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monaghanjack | Dec 08, 2010, 09:25 AM EST

It is so sad that Ireland, which was so proud, has sunk to the depths of depravity - as a young emigrant to England in the 50's I know what it is like to seek employment outside Ireland. Now those of the same level as me must repeat the same activity.

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Fightin69th | Dec 08, 2010, 08:30 AM EST

For those who make minimium wage, they see a drop of 12%, and even though the Govt officals have taken a reduction in pay, its not as drastic as 12%. Total Shower of B@sta@rds

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Dublinjas | Dec 08, 2010, 08:21 AM EST

As the party leaders spoke to the budget this morning the Fianna Fail Gangsters moll Gormeless Gormely spoke ad nauseam about the great achievements the Government had made on Water issues, Well not ten minutes earlier three labour TDs were seen to share one Glass of water between them, I ask you is there a shortage of water and glasses or for that matter an aul decanter or water jug in the Dail??. The Nations Parliament...What a disgrace.and also one of them started to do a mining exercise up the nasal passage and by all accounts hit pay dirt..I pity anyone who has to sit in that chair.

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