Friday 19 January 2018

Where the €2bn in cuts may come from

Old age pensions: This is the great unthinkable for Fianna Fail backbenchers, who know that pensioners are the one group that the Government has not alienated.

They escaped the social welfare cuts in the last Budget, but so far they have got no guarantee they will be so lucky second time round.

Property tax

Last year's Commission on Taxation report recommended the introduction of an annual property tax for all properties. It would be politically unpopular, especially among homeowners who paid large amounts of stamp duty to the exchequer. But the Government wants a tax which is not affected by the ups and downs of the economy and can bring in regular income.

Water charges

Environment Minister John Gormley is pushing ahead with the installation of water meters so that householders can be charged a fee for their water. He has promised that there will be an annual allowance, with those who exceed it having to pay. But there are doubts that it can be introduced in this year's Budget, given that the water metering installation will take time to complete.

Public sector cutbacks

The severity of these depends on the Croke Park deal being voted on by public sector unions. The Government has promised there will be no more wage cuts for the next four years if the deal is accepted and no compulsory redundancies. If the deal is rejected, then all bets are off.

Current spending

The Government is set to return to the Bord Snip Nua report prepared by economist Colm McCarthy and his team last year. It contains billions of euro of cutbacks in public sector spending -- and Mr McCarthy has helpfully reminded the Government that it is a "multi-annual" process. There will certainly be cuts -- the only question is: where?

Irish Independent

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