Ailish O'Hora: Anglo still haunts as promissory note deal Budget 2014 focus
ANGLO still haunts the country.
But it’s the €1bn in promissory note interest savings secured through negotiations with the EU/IMF/ECB troika earlier this year which is now likely to play a big role ahead of Budget 2014.
As the debate over more austerity versus less continues, the spotlight will shine on those savings and how they could impact Budget 2014 when €3.1bn is scheduled to be taken out of the economy
On the one hand we have to reduce our debt burden and stick to budget deficit targets of reaching 3pc of GDP by 2015.
On the other, some believe that easing off on taxes would send cash-strapped consumers back into the shops and boost the domestic economy.
The latest commentary around the budget comes from business support group IBEC which has changed its tune somewhat and joined with others in calling for no more tax hikes in October’s budget.
It believes that instead of the €3.1bn agreed with the troika, adjustment targets could be achieved by a €2bn cut in expenditure and a €600m tax carryover from last year’s budget which raised €300m more than expected.
The rationale, IBEC says, is that Ireland for the first time in recent years “had choices on how to proceed along its budget consolidation path.”
The Central Bank and our European paymasters are sticking to the line that the full €3.1bn has to be taken out this year.
The Fiscal Advisory Council and Taoiseach Enda Kenny both said yesterday that the €3.1bn would be adhered to.
Exchequer returns due shortly will shine a bit more light on how the tax side of the economy is performing although we still need to see a pick-up worldwide as GDP figures remain weak.
Still, the Government will have to think long and hard ahead of October 15 when Finance Minister Michael Noonan stands up to deliver his budget speech to already austerity-fatigued taxpayers.