FF has turned €4bn surplus into €2bn deficit in 3 years. To plug the gap Brian Cowen has resorted to borrowing and stealth taxes in budget 2007.
RTE has painted a very positive picture in relation to the budget. Its analysis is myopic. This budget is laced with booby traps.
It has marked similarities with the post election budget of 2002. Stealth taxes are back with a vengeance. The increase in Motor Tax represents a direct stealth tax of €82 million hitting every household and every family. This is painted as a green tax. It is nothing of the sort. It is a sly raid on the pockets of motorists who are regarded as soft touches. There is an increase in stamp duty on cheques. Tonight we had the announcement of a whole range of increases in health charges. Contrary to what the Minister states there is no full indexation of tax credits and bands in line with wage inflation. Consequently more taxpayers will pay tax at the higher rate.
As petrol prices have risen this year the Government has benefited strongly from the increased inflow of VAT and Excise Duties. It is well to remember that motorists have not benefited from EU membership.
Just look at the following examples. There is a price difference of c€3,000 between a Fiat Grande Punto in Ireland where the pre-tax price is €10,707 and Hungary (€7,756) and over €3,400 difference on the price of a Renault Megane (€10,683 and €14,103). An Audi A8 sold in Ireland last year for €65,000 pre-tax and in Britain for €56,450. Those who purchase a cheaper car outside Ireland will find the price difference disappears when they import it into the country, with punitive rates of Vehicle Registration Tax (VRT) of up to 30%.
This is contribution enough to the environment by the Irish motorist. Green Ministers and Brian Cowen please take note.
Alterations in today’s budget further discriminate against wives who to choose to remain at home to rear their children. This inequity is so great that it threatens the family unit.
Business rates, water rates, waste charges will increase as Local Authorities are starved of an adequate government subvention.
Experts on RTE when analyzing the alleged benefits do not factor in stealth taxes and increased charges.
Health Expenditure is projected to increase by 8%. This is down from c13% for 2007. The health service is facing huge unrest in 2008.
Of course there are some good measures in the budget. The Government has finally u-turned on the Stamp Duty. Richard Bruton has been vindicated on this issue. This change of heart by the FF/PD/Green coalition has been six months too late to avert a housing crash. Social welfare measures are in many cases reasonable.
The budget fails to tackle the child care issue. Most of the promises in the Programme for Government have been binned. Stealth Taxes and increased charges will bite in 2008. The budget is skilfully constructed to conceal the booby traps.
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