Seamus Coffey: The government may have squandered the political capital of first year in office
AFTER two days we are finally through the €3,800 million of expenditure cuts and tax increases that comprise Budget 2012. We already had details of the €750 million of capital expenditure cuts we yesterday we were led through €1,450 million of expenditure cuts and today we got €1,600 million of tax increases.
That seems like a straightforward way of reaching the €3,800 million total but there are some issues that should be considered. The target for tax increases includes a €600 million carryover from the measures introduced by the late Brian Lenihan in last year’s budget.
These tax increases were announced last year but won’t have their full effect until next November when the 2011 tax deadline passes. This means that Michael Noonan introduced measures with a net effect of €1,000 million and picked up the €600 million from last year to reach his €1,600 million total.