The Budget Britain Needs Was Delivered in Ireland

By coincidence here in Ireland it was also budget day, the Finance Minister Brian Lenihan delivered a 7% cut in public expenditure to match the 7.5% fall in GDP in 2009.  To equal that Alastair Darling would need to have announced £40 billion in public expenditure cuts today.

Here are some of the reasons Guido thinks Ireland will bounce back faster than the UK:

  • Corporate and capital tax breaks for start-ups have been extended
  • Corporation tax rate of 12.5% is ‘here to stay’
  • “Green tax cuts” for zero emission vehicles
  • VAT has been reduced by ½%
  • Public services efficiencies sort
  • Welfare benefits reduced to 2006 levels, social welfare bill cut by equivalent to 1.5% of public expenditure
  • Dole allowance to be reduced to €150 a week
  • Social welfare to be cut 4.1%
  • Politicians’ pay will be reduced in line with public sector grades
  • Public sector pay cut of 5% on first €30,000 salary, 7.5% on the folllowing €40,000 of salary and 10% on next €55,000
  • Taoiseach (PM) to have pay cut by further 20% on top of previous 10%
  • Permanent pay reduction of 12% for those on over €200,000 in the public sector
  • Savings of over €1bn on public sector pay bill

Darling has gone the other way, introducing penal tax rates at the top, and hiking NI payroll taxes on people on only £20,000.  He put up VAT which as any left-winger will tell you, is regressive and hits the poorest hardest.  What struck Guido was that this is an odd class war political budget, their own core voters are being hit hardest.   Low paid, public sector workers on £20,000 get a pay freeze, a tax hike and whacked by VAT increases – a triple whammy.

Ireland welcomes UK corporations with a tax rate nearly half the UK rate and best of all, Lenihan also announced that alcohol and cigarette taxes are to be reduced…




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Quote of the Day

The FT’s Wolfgang Munchau on the “fake maths” of economic forecasts:

“The truth is that our ability to forecast the future beyond the current quarter is limited… The curse of our time is fake maths. Think of it as fake news for numerically literate intellectuals: it is the abuse of statistics and economic models to peddle one’s own political prejudice… The fakeness of the maths lies in an exaggerated inference. Economic models have their uses, as do opinion polls. They provide information to policymakers and markets. But nobody can see through the fog of the future.”

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