Budget 2013 Summary
Making the right choices
What does the budget mean to you?
Traditionally, people tuned in to the budget announcement to hear whether the price of petrol was going up, whether drink and cigarette prices were being hiked, or whether any changes were being made to increase tax or to cut the dole.
These years the budget looms over us like the end of the world and most households dread it. €25billion has been taken out in taxes and cuts since this crisis began and the government plans to take another €9billion, minimum, to reach the 3% Stability and Growth Pact target. This year’s budget alone will hit us with another €3.5billion in taxes and cuts. This is against a backdrop of continued payments to bank bondholders and the promissory notes (€64billion into the banks so far) and the refusal of the government to stimulate the economy and create jobs.
The policy of this government, like the last, is to make ‘adjustments’ that impact the most on those who can take it the least.
Taxing the lowest paid, squeezing families crippled with mortgage debt and rising bills, attacking the disability sector, decimating hospitals and schools, and tearing at the fabric of rural communities has become the norm at budget time.
People don’t tune in to the budget now to see what the price of drink or petrol is going to be. They tune in to see if, after this budget, they’ll be able to feed and clothe their children, pay the ESB, keep their car on the road and keep a roof over their heads. Some will watch this budget wondering if their children will get home from England, Australia or Canada. They will wonder if this state will ever again offer a future to tempt them back for good. They will know that along with their children, 87,000 people emigrated last year and the same numbers are predicted to emigrate next year.
People have been sorely let down by this new government. The Labour Party promised they’d protect the vulnerable at budget time, yet they continue to target children, the disabled and the elderly. Fine Gael promised an end to crony politics and a new era of openness, yet their health minister, who will preside over more health cuts in this budget, has become yet another symbol of a failing political system.
Budgets are about choices. Do you introduce a property tax that will target already stressed families, or do you introduce a wealth tax that asks the richest to contribute more? Do you cut the state pension, or do you change the tax treatment of private pensions? Do you target child benefit, or do you reduce the salaries of politicians, CEOs and top civil servants?
And fundamentally – do you concentrate on reducing a deficit with taxes and cuts, or do you look at the wider economy to see what the real problems are in employment numbers, in your banking sector, and in emigration figures?
These are the choices that the government has before it. So far, Labour, Fine Gael and Fianna Fáil have shown themselves capable only of making the wrong choices, the cowardly choices.
Sinn Féin believes the government’s role in the economy has to be about more than deficit reduction at the end of the year.
We have consistently set out the need for investment in job creation and we just recently launched a €13billion stimulus plan and a range of other measures to save and create jobs. We have consistently argued for an end to the bail-out of banks and bondholders. And we’ve consistently set out growthfriendly, fair measures to make a deficit adjustment that adds up, but has the least harmful impact on families and services.
We set out in our alternative budget how to meet the €3.5billion deficit adjustment that the government wants to make next year. We also set out new expenditure proposals that would improve people’s lives.
This Sinn Féin alternative budget is about more than just reaching a €3.5billion target. Ours is a budget that makes a difference – to the state’s finances and to people’s lives.
Our budget is about making the right choices.
Alternative budget measures
Budget adjustment: €3.5billion
Proposed new expenditure: €338.68million
New taxes after tax adjustments: €2.758billion
Tax carry-over: €220million
(Tax and savings net of expenditure amount to €3.684billion, which allows €184million for partial year effect in 2013 and ensures a €3.5billion adjustment)
Proposed new expenditure (€338.68million)
Protecting children’s rights (€163million)
- Free schoolbooks for every child in the state - €45million
- Increase the earnings disregard by €16.50 to €146.50 per week for One Parent Payment - €32million
- Double to €70million the budget for school meals and expand programme - €35million
- Increase the fuel season allowance by six weeks - €51million
Give families a break (€30.68million)
- Reinstate 950,000 home help hours - €16.9million
- Restore the training and materials allowance for CE participants - €12.5million
- Reduce the fee for non-GP-referral attendances at hospital A&Es by €10, bringing it down to €90 - €1.28million
Staffing frontline services (€145million)
- Lift the recruitment embargo to hire 3,500 frontline staff - €145million
New taxes after tax adjustments (€2.758billion)
Improve revenue audits (€100million)
- Clamp down on black market and false declarations - €100million
Income taxes (€456.5million)
- Third rate of tax of 48% on portion of income over €100,000 - €365million
- New Employer’s PRSI rate of 15.75% on portion of income over €100k - €91.5million
Wealth taxes (€1.110billion)
- A 1% tax on net wealth over €1million with working farms, business assets, 20% of the family home and pension pots excluded - €800million
- Increase Capital Gains Tax from 30% to 40% - €160million
- Increase Capital Acquisitions Tax from 30% to 40% and reduce thresholds by 25% - €150million
Tax reliefs (€969million)
- Standardise discretionary tax reliefs (except charitable donations) - €969million
- Reduce mortgage interest deduction allowable against rental income from 75% to 40% - €157million
- Apply PRSI to rental income - €20million
Private pensions (€126million)
- Increase taxable amounts from super pensions - €13million
- Reduce the pensions-related salary earnings cap to €75k - €113million
New taxes (€243.5million)
- 5% tax on shop, course and online gambling, paid by consumers - €243.5million
Tax adjustments (-€423.7million)
- Adjustment on tax side to allow for capping public salaries (-€115million)
- Reduce excise on petrol and diesel by 5 cent (-€177.7million)
- Take all those earning minimum wage (€17,542) out of USC, exempting an additional 296,000 earners (-€131million)
Tax Carry-over (€220million)
- Full year carry-over from last year’s budget tax related measures - €220million
Social welfare (€67million)
- Social welfare amnesty - €55million
- Recoup welfare paid from employers in wrongful dismissal cases - €12million
- Apply the full cost of private care in public hospitals - €432.5million
- Deliver further savings on branded medicines and implement full generic substitution - €280million
- Phase out the public subsidy of private schools over five years - €22million
- Introduce an emergency pay cap of €100,000 in civil and public service for 3 years - €102million
- Cap VEC chiefs’ salaries at €100,000 for 3 years - €413,201
- Cap City and County managers’ pay at €100,000 for 3 years - €1.46million
- Cap non-commercial state agency CEO pay at €100,000 for 3 years - €2.5million
- Withdraw current Secretary General TLAC (special severance pension payment) - €1.6million
- Cap hospital consultants’ pay at €150,000 for 3 years - €90million
- Reduce all state agency board fees by 25% - €6.5million
Pay and Oireachtas allowances (€5.58million)
- Cut government salaries to €100,000, TDs at €75,000 and senators at €60,000 - €4.3million
- Abolish Dail and Seanad allowances (Ceann Chomhairle/whips/Seanad leaders) - €335,177
- Abolish committee chairpersons’ allowances - €230,702
- Remove Houses of the Oireachtas Commission payments - €76,000
- Remove Super Junior Minister allowance - €34,000
- Cap Ministers’ special advisors’ pay at €80,051 (first point principal officer) - €494,481
- Scrap Oireachtas members’ mobile phone allowance - €113,000
- Reduce government jet spend by 15% - €172,000
- 15% reduction in professional fees - €20million
- 10% targeted savings in telecommunications spend: Saves - €2.29million
- Increase public sector pension reduction for high earners - €10million