Sunday 25 January 2015

Noonan: Budget means people will eventually have more money for pub

Lyndsey Telford

Published 16/10/2013 | 11:11

Finance Minister Michael Noonan was forced to defend his decision to hike the cost of beer, cider and a measure of spirits by 10 cent, and a bottle of wine by 50 cent.

PUBLIC Expenditure Minister Brendan Howlin has rejected suggestions the Government followed Conservative policies in drafting the latest austerity budget.

The minister, who unveiled public spending cuts to the value of €1.6bn as part of the overall €2.5bn adjustment yesterday, said Ireland's economy could not be compared to Britain's.

Mr Howlin, of the Labour Party, claimed what is good for the Irish economy is not necessarily the same as what is good for the British.

"Britain has a completely different social welfare system, much inferior to ours," he told RTE radio.

"Look at the care packages for the elderly in the north of Ireland or in Britain. It is fundamentally poorer than the good support packages that we give even in the most difficult of times.

"And we are proud of that and we worked might and main to protect that."

Meanwhile, Finance Minister Michael Noonan was forced to defend his decision to hike the cost of beer, cider and a measure of spirits by 10 cent, and a bottle of wine by 50 cent.

He said while he increased excise duty on alcohol, budgetary measures to stimulate the economy will eventually result in people having more money to spend in pubs.

"Alcohol is a discretionary item and rather than tax the necessities of life, I think it is reasonable to put an imposition on excise by way of alcohol and tobacco," Mr Noonan said.

He said he maintained the special rate of VAT on tourism and leisure-related services at 9%, left income tax rates and the Universal Social Charge untouched, and put a lot of money into getting people back to work.

"As we grow the economy, stimulate the economy, get more people working, you will see the benefit coming into you if you run a good business," he told a hard-pressed publican.

The ministers were challenged on plans for a major review of medical cards, in which they hope to save 113 million euros.

Health Minister James Reilly was unable yesterday to give even an estimate of how many people will lose a card as a result of increased scrutiny of eligibility.

He did confirm that up to 35,000 elderly people - over the age of 70 - will lose their full medical cards, which will be replaced with a free GP card.

Mr Noonan and Mr Howlin also faced criticism for cutting dole payments to young people, which will be slashed by nearly a third.

Anyone aged 25 and under who signs on from January will get just 100 euros (£84) a week, down from 144 euros (£121), while 25-year-olds can claim 144 euros, reduced from 188 euros (£158) - the full rate which will still be available to those aged 26 years and over.

Despite a series of cutbacks targeting the elderly, the ministers insisted they strove to protect them.

Even with the tightening up of the eligibility for the over-70s medical cards, the removal of the telephone allowance of 9.50 euro per month and the scrapping of the so-called bereavement grant, Mr Howlin said there was still "a very robust package" for pensioners.

Mr Noonan added: "We are protecting the older generation, because we appreciate the contribution they have made to the country. We didn't touch pensions, either contributory or non-contributory pensions.

"But more importantly, we didn't touch income tax credits for the elderly, which are very enhanced. If you take for example a couple of pensioners living together - man and wife, husband and wife - they pay no tax until their income passes 36,000 euro.

"And we have single people going into the 41% rate of tax, just above that level. So the benefits in the tax law for elderly couples are totally preserved."

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