Thursday 27 November 2014

Minister walked tightrope of pain and gain

Labour will claim victory for package TDs feel they can sell on the doorsteps

Fionan Sheahan

Published 16/10/2013 | 04:00

MICHAEL Noonan said there were a few "bits and bobs" to be sorted out as the Budget negotiations reached their final stages.

The bits were clearly a series of quite unpleasant cutbacks in services and benefits that will hit various different groups of people in a variety of ways.

The bobs were a bundle of measures to stimulate investment, keep up the momentum in the tourism industry, revive the construction sector and maintain the signs of uplift in the property market.

For bits and bobs, read give and take.

Moreover, Budget 2014 aimed to reassure people the economy is in recovery, the years of crisis were over and it was time to look forward.

Mr Noonan deliberately pointed out the Budget was being framed against the backdrop of 3,000 net new jobs being created every month – the first time dole queues weren't lengthening.

"The purpose of this Budget is to continue the progress we have made; to reinforce policies that grow the economy; to establish the conditions which will create jobs; and to prepare for exiting the bail-out programme," he said.

Unlike recent Budgets, there wasn't a dramatic measure that would hit practically every household.

The Universal Social Charge ripped the heart out of disposable income, the household charge provoked anger, the subsequent property tax provoked a sense of the inevitable and the cut to child benefit was viewed as an attack on families.

The atmosphere is different to last year, as a result.

Indeed, some people will get through this Budget relatively unscathed, apart from paying 10c more for a pint in the pub tonight.

The carry-over from measures announced in 2013 meant people had ample advance warning about the doubling in the property tax next year.

After five years of being crucified, there was palpable relief yesterday that there wasn't another big headline hit across the board.

In many ways, this was a traditional type of Budget where the sour was sweetened.

The Government will penalise savers with higher DIRT rates, while also offering an incentive to those with a few grand of savings to renovate their homes.

It will be back to basics next year with the payment of water charges in 2015.

Not that the end of the bailout will bring about an end to austerity either.

The Coalition has been honest enough to admit there are plenty more tight Budgets to come.

The timing of the Budget means the Government will benefit from additional excise duties assisting the bottom line to the end of the year.

Retailers will also hope the earlier date will boost sales in the run-up to Christmas, as consumers no longer have the spectre of a Budget looming.

The perception last night in Leinster House was that the Labour Party was claiming 'victory' in the Budget battle with Fine Gael.

The junior coalition party wanted an adjustment of around €2.5bn – and got it.

Labour has claimed ownership for months for the rollout of the GP-only cards for the under-fives.

Joan Burton's welfare budget and Ruairi Quinn's education budget were also seen to be protected as James Reilly's health spending once again becomes the focal point for negative attention.

The vague figures and lack of detail from the health estimates means there will be a repeat of the usual underestimation and abject record for meeting targets.

Last night, there was no confidence in the figures adding up in health in 2014.

Ministers of all hues acknowledge the Budget wouldn't have been possible without the negotiation of the Haddington Road agreement – and tip their hat to Brendan Howlin in appreciation.

The hard work on Budget 2014 was done in advance.

Whether the reaction is enough to pull Tanaiste Eamon Gilmore's party out of its freefall remains to be seen.

Certainly, after last year's humiliation at the hands of Fine Gael over the wealth tax, where Labour considered a walkout from Government, the party has more to claim credit for.

Last night, both coalition parties felt there was enough in the Budget to defend.

"It's sellable," a minister told the Irish Independent.

Fine Gael feels the meeting and beating of the deficit reduction targets is important and is on track.

Neither party thinks the Budget will scare them off the doorsteps for the next while.

But there remain concerns within Cabinet about whether a government gets appreciation for giving a new benefit, versus taking one way.

The give-and-take theme was encapsulated in the approach to medical cards.

The Government decided to extend free GP care to every child under five in the country, regardless of income.

A decade on from Charlie McCreevy's decision to grant a medical card to all over-70s and the wheel has gone around again.

Granting free care to a demographic, rather than the group in most medical need, remains a policy enigma.

At the same time as extending medical cover, the Coalition is taking away medical cards from 35,000 over-70s.

Given the pensioners' penchant for turning up on polling day, it's unlikely to pass without retaliation.

Low to middle income families will be affected by the move to cull more than 150,000 medical cards.

A wealthy family with a healthy toddler will have their doctor's bills paid, while a struggling family with a sick schoolgoing child will have even less chance of getting cover.

Political necessity takes priority.

Irish Independent

Promoted articles

Read More

Promoted articles

Editors Choice

Also in Business