Ireland is unveiling its big 4-year plan announcement imminently
We shall be covering live. For background see here.
9:02: Still an empty podium in Ireland…
9:02: The details are out and they’re here.
Among the details:
- 12.5% tax maintained.
- 25,000 public sector job cuts.
And here are the full tax changes:
Maintain the 121⁄2% corporation tax rate; this will not
• Raise an additional €1.9 billion through income tax
• Implement pension-related tax changes to yield €700
million, with €240 million in tax savings on the public
sector pension related deduction. • Abolish/curtail a range of tax expenditures yielding €755
• Increase the standard rate of V A T from 21% to 22% in
2013, with a further increase to 23% in 2014. These
changes will yield €620 million.
• Introduce a local services contribution to fund essential
locally-delivered services. This will yield €530 million.
• Increase the price of carbon gradually from €15 to €30,
yielding €330 million.
• Reform capital acquisitions and capital gains tax to yield
an additional €145 million.
• Transform BES into a new Business Investment
Targeting Employment Scheme.
9:05: Brian Cowen takes the stage and discusses the size and significance of the crisis. Central to this is are major cuts to spending and actually improving the economy.
We believe we will, on average, grow the economy by 2.7%.
9:08: Public service at 2005 levels, tax rates at 2006 levels… this is something that people can envisage.
9:09: This is about us making sure that we plan our way through these difficulties.
9:10: Green Party leader John Gormly is speaking…
9:12: Talking about preservation of education and environmental protection. One environmental element is water metering.
9:14: FinMin Lenihan taking over. Lots of talk about “building confidence”
9:15: Underlying budget deficit will be 11.4% of GDP as forecast. It will decline to 9% next year.
9:16: Talking up exports growth. Ireland will a balance of payments surplus next year.
9:20: Talking about plans to make the economy much more competitive and labour market more flexible, which includes a reduction of the minimum wage.
Q: First question is on education… Not much of an answer.
Skipping ahead… Lenihan talking about need to get borrowing to within single digits of GDP.
Lots of talk about “sustainability” for the future and the inherent tax hikes in that.
Q from Telegraph reporter: Won’t austerity slash your GDP? And isn’t it optimistic just to focus on fiscal debt?
A: Lenihan: This issue is at the heart of the negotiations… A clearer picture will be provided at the conclusion of negotiations. Note that last year we had spending cuts, and will we had economic growth and avoided deflation.
Q: Question from firebrand TV3 journalist Vincent Browne: Does the budget plan assume the future banking liabilities.
A: Cowen: Those details are still being worked out, but the budget plan is the budget plan.
From RTE, here’s a nice chart showing the tax changes:
Q: Do you blame yourselves, or do you blame the rest of the world.
Cowen: Not about apportioning blame..
Q: When will the next election be held?
A: Duh, no answer.
Alright, wrapping up.