This was an accident waiting to happen. Taxes from the property market are notoriously unreliable.
This is the harshest budget in living memory. Even to outline some of the harsh measures sends a chill through the bones.
There are some minor beneficial changes in Social Welfare Payments and Tax Bands allied to provisions geared towards innovation and R and D. There are some aids for the property market. However this is a TAKE budget which will raise an extra €2 billion in taxes. Government Borrowing is forecast at 6.5% of GNP. This is much too high. The EU requirement is 3%. In essence the Government must borrow €13 billion.
Income tax has been increased. A levy of 1% has been placed on all income up to €100,000 and at 2% on earnings over €100,0000. This is an income tax rise by another name. The PRSI ceiling has been raised also. Mortgage relief for non-first time house buyers has been cut from 20% to 15%. A €200 tax has been introduced on all benefiting from employer provided car parking in urban areas. Motor Tax rises by 4%/5%. Those who own a second property face a new € 200 tax. DIRT ,Capital Gains Tax and VAT have been raised.
The government has cut back financial support to local authorities so a massive hike in commercial rates and water rates will filter through.
Automatic entitlement to a Medical Card for all over 70s has been withdrawn. There is to be a 20 % increase in private and semi-private bed charges in public hospitals and Accident and Emergency charges are to increase by 50% from €66 to €100 for non medical card holders who attend A&E departments without a letter from their GP. The Drug Payment Scheme (DPS) threshold is being increased from €90 to €100 per month which, the Government says, will lead to savings of €15 million in drug costs.
The Registration Charge for Universities has been raised from €900 to €1500. The pupil teacher ratio in schools has been increased.
Petrol will rise by 8 cent per litre.
The budget will cost middle-income families an average of €2,500 per annum. There will be a €10 airport charge for passengers.
There are also some social welfare cutbacks.
The hair-shirt is back in Irish politics with a vengeance. It is likely that consumer confidence has been severely dented. In addition it is probable that two more harsh budgets may be in the offing.