The Finance Bill 2012 was published last week to implement Minister for Finance Michael Noonan's Budget. It was a hopeless Budget and nothing has changed that.

Its sole purpose was to appease the troika so that we wouldn't appear to be too Greek. In the end we are becoming more German, but without their financial resources. They keep the honey while we work to the death. In 2011 we missed our tax collection target by nearly €1bn. In 2012 we aim to collect €2bn more than we did in 2011. That could be a tall order.

The Department of Finance estimated that it will cost €7.4bn to service the national debt in 2012. It only expects to collect €35.8bn in tax revenue. That's more than 20 per cent of everything we collect in tax gone from these shores before we can spend one red cent on essential services or employment creation.

Even if we collect the €36bn that is planned in 2012 we will be €12bn short of what we collected when these taxes peaked five or six years ago. If we take into account the new €7.4bn burden for the national debt we are wasting nearly €20bn a year that we cannot afford. And all for the wrong reasons. We owe a lot to German, British and French banks and they know we cannot afford to pay them back. If they were to accept their losses the debts could wipe them out or damage their international credit ratings even more.

We are playing a game and the stakes are high. Taoiseach Enda Kenny and Michael Noonan act as if they have already won. Hopefully they know something the rest of us do not. Maybe we don't need to repay any capital until we have it to spare and interest costs should be slashed. Our tax yield is down 25 per cent and 20 per cent of what's left is eaten away with interest charges.

If the Budget is anything to go by, the Government does not see our recovery coming from within our borders. The only thing the Government expects to get out of the electorate is more tax. The Household Charge is the new wealth tax, but it has nothing to do with wealth. At least we can have our daily bread, including Blaa, without paying VAT.

The real tax benefits given in the Budget, and there are some, are directed offshore. The rate of tax for companies has been maintained at 12.5 per cent to attract foreign business to set up here. A further incentive was the introduction of the special assignee tax. To attract the right staff, the Finance Bill will exempt 30 per cent of the income of staff who come to work here. It only applies to income between €75,000 and €500,000, so it is not targeted at those on the national minimum wage, or even the average wage.

Those who feel aggrieved by this incentive could be paid off by a trip to Brazil, Russia, India, China or South Africa (the high growth belt). Subject to conditions, the Finance Bill exempts their income from tax while on assignment there. This is to encourage developing markets for our products in the BRICS countries where growth is best. We could sell beef to Brazil, gas to Russia, software to India, food to China and anything to South Africa.

The tax incentives for research and development have been changed to extend their benefits to key staff. Up to now the tax benefits were restricted to the company itself. There is a view emerging from the general approach of the Budget that the Government feels we are totally dependent on foreign intervention for our survival. It has allowed its hands to be tied by the troika so that it cannot bankroll viable indigenous businesses that are buckling under the financial strain created by the global downturn. More jobs will be lost here because we are not doing enough to help our own. The only choice is declare yourself bankrupt in Britain and start again.

Bill Clinton might think his American friends are nuts if they don't invest in Ireland, especially when the going rate is peanuts too! We need American dollars because we have no money of our own. Most of what we have is going to the troika, so that they will lend us more. We paid dearly to become the golden boys and girls of Europe. If payday doesn't come soon we cannot hold out much longer. If we found gold in Monaghan, gas in Dublin Bay and oil off the Galway coast it still wouldn't solve our problems.

If the new tax initiatives succeed in bringing more of the right stuff here it will be a long time before the benefits trickle down to those who need it the most. If the past is anything to go by the top jobs will only benefit an elite few. If we have learned from our mistakes, the focus should be on developing the indigenous spin-off businesses that would create sustainable employment. What is the point in having a well-educated workforce if it cannot even be paid the basic minimum wage. The prices are still too high for basic essentials such as food, transport and shelter. There is nothing left after these bills are paid. In many cases there isn't even enough to pay the bills.

If the cost of living doesn't go down then wages cannot either. But already there is a call to cut pay in the construction industry by 20 per cent this year. VAT was cut to nine per cent in the hospitality and entertainment sector to help keep prices low. But we are fighting a losing battle to keep so many on subsistence wages. We are at risk of driving a wedge between the haves and the have-nots all over again. But this time it will be worse, because now we are the poor relation in Europe.

There was a reprieve for those who are still claiming property tax incentives such as Section 23-type relief. The Government repealed the Finance Bill 2011 provisions which would have abolished them. But there will be restrictions. Those who earn more than €100,000 and claim property incentives will pay a five per cent levy as part of the Universal Social Charge (USC). There were rumblings that the Revenue would remove an anomaly in the USC for the self-employed, but it never happened. The self-employed pay a special 10 per cent USC on earnings over €100,000, but owner-managers paid through companies avoid the higher charge. Maybe Revenue was more concerned owner-managers would keep the money in the company if the higher USC applied. Then they could lose 10 times the amount in other tax.

First-time buyers who took out mortgages for their homes between 2004 and 2008 will get tax relief at 30 per cent for interest. Conditions apply. Those who buy in 2012 will also get some tax relief for interest payments.

Subject only to EU approval, NAMA will get its way in the next two months when it launches its programme to offload property where 20 per cent of the mortgage can be written off if property prices are not sustainable. It confirms they are trying to sell above market value. Who can blame them? The Government is complicit in this manipulation of property prices. For everyone else capital taxes have increased to 30 per cent. But then who is making gains now? In 2006 we collected nearly €7bn in capital gains tax and stamp duty. The projections for 2012 are only €1.7bn and half a billion relates to the pension levy. Things will get a lot worse before they get better.

James Fitzsimons is an independent financial adviser specialising in tax and financial planning.

Originally published in