So, the budget is done and now we move on. Lets face it, there was never going to be a perfect budget to get us back on the rails, it was always going to be impossible to provide something for everybody. As i see it, there are positives and negatives here.
Positives i see as follows
- Raised taxes, hopefully improving the tax revenues and demonstrating to the international community that we are serious about solving our problems.
- spending cuts, closing the gap between income and spending, and finally action to trim the numbers in the public service although this will take a few years to work itself out
- action on the toxic debts of the irish bank, for my money, this is the single most important action of the budget. If this plan is properly implemented and managed, this could even make significant profits for the country in the medium term, and in the short term should allow normal service to be resumed by the banks.
Negatives - No social welfare cuts, in my view, action was necessary to try to contain our social welfare spending, at 20 billion euro per annum this is crazy and the level of benefit we pay here provides no incentive for people to leave the dole for entry level employment
- no stimulus at all for the economy. I would like to have seen VAT reductions to try to tackle the problem of the trade going north. Some initiative on stamp duty could have been taken to try to encourage property buyers and investors back to the market. Initiatives on PRSI relief could have been looked at to encourage employers to take on people who have recently been made unemployed.
- there is a risk that with the huge tax increases they may have gone too far and this may be the killer blow that causes the economy to implode completely resulting in a complete collapse in tax revenues.
This one is very hard to call, but i am leaning towards a positive feeling about the budget, hopefully, the right balance has been struck and things will pick up from here. One note that encourages me is that now, 6 hours after the speech, there have not been any union officials or other interested parties standing up to call for people to take to the streets. This leads me to conclude that on balance, people accept the budget and consider it at least to be fair and equitable.
The opposition parties are criticising the individual measures, but their heart doesn't really look to be in it. I suspect that Enda Kenny is disappointed that there is very little public disquiet about the budget, and no immediate prospect of a general election as a result of coalition disquiet.
Watch this space.
This poster went up on the billboard across the street from my shop yesterday, and seems to mark the launch of Libertas as an official political party in ireland with candidates in the forthcoming European elections.