Wednesday, December 9, 2009

So the Budget is out.

Some points that struck me as a first impression was the number of things done for optics. Smoke and mirror policies. The most annoying being Cowens pay cut. How will he surive on over 200k. Tough times indeed.

Excise duty on alcohol reduced - 12 cent cut on beer and cider, 14 cent cut on a measure of spirits, 60 cent cut on a bottle of wine (no change in tobacco)

Will these cuts increase consumption and therefore revenue or is it just another distraction by feeding into the "we are competing with Newry and Bangalore" myth. I suspect the latter but hey who knows maybe this is not a pointless optic. 12 cents off that scrumpy jack might be enough to tempt people to ignore Mary Harney's advice to shop around for the best value. Maybe we can drink our way out of this. Who'll play their part this Christmas? That socialist rag the Sunday Business Post was wondering last year why the Govt. was failing to force retailers south of the border to reflect currency movements in their prices! As they note the south is indeed a more costly place to do business but could that account for differences of up to 50% in some items. Still a year later its apparently better to ignore that type of thing and instead of protecting southern consumers its apparently better to lobby and just mess around with cider prices rather than face up to Rip Off Ireland.

Scrappage scheme announced - VRT relief of up to €1,500 on a new low-emission car, for trade-ins at least 10 years old.

This falls under stimulus apparently. The SBPost were fairly enthused about this over the last few weeks. Apparently is a big boost. Maybe it is! Cheap drink and a new car to prosperity. Gas how shopping in Newry is anti-patriotic( as the economic isolationists argue) but encouraging the purchase of a luxury item produced off the island is not. Is there a better way to have money circulate in the economy for a few more times before it leaks out or is a new car the best way to go? Or is this car scrappage just a malarky to make it look like the govt is trying to kick start the economy and get some spending going. But will the lure of €1500 for your banger traded in for new cars under certain conditions be enough to tempt you to buy a car. As Brian Linehan said
"The scheme will have the environmental benefit of removing some older, potentially less safe and polluting vehicles from the road".
Potentially less safe? Thought the NCT had those things off the road.

But this is a govt. with a green streak in the middle. What input them? Well car wise continued incentives to switch to a hybrid car. I am really curious to see how this works out.

As Brian L said ...
To that end, the VRT exemption for electric vehicles and the VRT reliefs of up to €2,500 for plug-in hybrid electric vehicles are being extended by two years until 31 December 2012
. I would like to see the latest figures but back in 2007 friends of the irish environment said the scheme cost about 8 million for 9 months of the year 2007. But at the time a certian Ciaran Cuffe said:

The rebate was supposed to encourage sales of cars generating less emissions and pollutants than normal models such as the Toyota Prius and the Honda Civic hybrid," he said. "But now it's clearly subsidising sales of expensive, luxury cars that contain green technology, but don't apply it in the same way. No one driving a Lexus hybrid can argue they are helping to save the planet.

Maybe they got that problem solved and its now acceptable to the Greens or maybe the Greens accept anything and everything these days. Is this another gimmick. At 8 million roughly a year then yeah it probably is substanceless. Cuffe used think so anyhow.

Ombudsman to be appointed to review the cases of small businesses who are refused bank loans

If I was a small business man with 10 people struggling to keep afloat the opportunity of entering a bureaucratic paper run between the banks and an ombudsman would not fill me with confidence. Still when it goes belly up and the creditors are ripping apart your tiny business and people have lost their jobs you can keep busy tracking your new national bond.

There are many other items in the budget that are damaging and they will be well covered in the media and on the SF budget analysis site and other progressive media sources.

But these paltry baubles I listed above may end up being touted as the govts stimulus package. For me personally thats hard to credit and I see more an exercise in spin and managing the political narrative than actually contributing anything serious.


  1. I hope you noted the SF TDs voted with Fianna Fail pushing through the reduction in VAT on alcohol (a responsible opposition) It's too small to save southern retailers but i guess the rich will be able to buy more bottles of bubbly on the money saved from the social welfare cuts.

  2. The dust is settling and now the real struggle begins.

    Michael Taft has written a good post-budget article that set out the future for the left in stark but realistic terms.

    The Anatomy of Defeat

    They won. We lost. Get over it. Now let’s change it.

    My own tuppence worth is that this govt has laid the foundations for a concrete reclassification of society. While only time will tell how new definitions of class emerge, the current definitions are stark. We have the winners; those who perpetrated this mess and are going to profit from it. We have the losers; those who've lost their jobs plus the public sector workers, who deliver social services, and who now have the priviledge to pay national and international bond holders for the debts accrued by the winners. I'm sure that FF and the Greens hope to thrown some peanuts at the public sector workers before the next election, but it really depends on a global export lead recovery.

    Rarely has a govt in the West pursued a deflationary economic policy in such overt terms with regard to labour. We must also remember that the creation of agency workers was already undermining pay and conditions in the private sector. We can only imagine that the deflationary policies are going to drive these conditions into the gutter for most wage earners in many economic/industrial sectors. We may even get workfare policies which are nothing more than indentured servititude to a state now formally constituted as a Capitalist Oligarchy if the budget is anything to go by. (I also wonder if the ego's of our politicos and their vested interests haven't been stung by their fall from NLC grace, and now they're determined to show their NLC brethern in other countries just how macho and clever they are by making the poorest and most vulnerable foot the bill for their mistakes.)

    SF, alone among the major parties, had a progressive alternative to this budget. However, as Taft points out, that was the past. Imho, we need to turn those budget proposals into concrete policies abetted with sound and wide ranging marketing measures. The right has jettisoned anything to do with ethics or social responsiblity. There is a huge void to fill. Taft gives a far better outline of what needs to be done. Enjoy the read. slán

  3. Liked how Taft put it in that article. he is showing good leadership as part of irelands progressive movement. I like that he wants us to dust off, fight back and fight back to win.

    Can see why SF voted for the excise measure. The post didnt say but cross-border shopping is mainly focussed on the border region. Its retailers there who are failing. Some of that money going north can keep some businesses up and running in the border region. Border area is poorer than most areas. This can help balance things a bit.

    So regionally it can do some positives but wont change the state situation. Wont help the rich much though or the poor but may be enough to tide some over in the Border area for a bit.

  4. VAT, being a general tax, hits less well off wage earners with greater monetary magnitude than it does wealtheir citizens.