So have you calculated yet how much worse off you are going to be as a result of Budget 2009? Nobody, least of all the most vulnerable in society, has been spared by Brian Lenihan’s first attempt. Lenihan’s levy will affect us all, but the most vulnerable, the lowest income earners in Ireland, will be hit hard.
During his opening speech on Tuesday Minister Lenihan vowed that the most vulnerable would be protected, but by introducing the one per cent levy, in one fell swoop he has ensured those on the lowest incomes in this country are going to feel the pinch come January. Workers who were previously deemed too poor to pay tax have been brought back into the tax net. An easier option would have been to raise the lower and higher tax bands by one per cent and then reduce them again in a few years when the economy has stabilised and is growing again.
But is this a time to be whingeing or a time to accept that hard decisions must be taken? I’ve no problem taking a few small hits to the wallet. Sure when it comes directly out of your wages it will largely go unnoticed. But low income earners, taking home only the minimum wage, will miss the one per cent being denied them when you couple it with some of the other tax hikes.
Fair enough, those on social welfare don’t have to pay tax on that particular source of income, but take a single mother, for example, who is in receipt of single parent’s allowance and working to make ends meet, she will now have to pay tax on her meagre income, which is hard got but very easy spent.
Education has been hit hard with the doubling of college registration fees. Free education, how are ya? There is nothing free about a €1,500 registration fee for third level institutions: a 50 per cent increase is extreme and will ensure that families who have two or three children in third level, and who aren’t in receipt of a grant, will find autumn a challenging season.
Of all the announcements made in Budget 2009 the abolition of the automatic medical card entitlement for the over 70s had to be the most controversial, seen as a retrograde step by a Government who brought the policy in to win the “grey” vote in the first place. There has been a lot of confusion. The onus is on the Government to reassure this age group immediately of what the income thresholds will be. Out of the 140,000 people who currently hold non-means tested cards, about 15,000 are expected to be under the new threshold and qualify for full medical cards; another 35,000 will get GP-only cards and 70,000 will get the new €400 a year Health Support Payment.
The Department of Health estimates that 20,000 people who currently have a non-means tested card will end up with nothing. But the way the Government have done it will prove to be a very laborious and expensive exercise.
What wasn’t tackled was the bloated public service. In the private sector if money is tight, jobs are axed and systems are put in place to ensure businesses tighten their belts and run efficiently. The public service is a quagmire of inefficiencies, double jobbing, money wasting departments who need to be called to account. Seeking voluntary redundancies doesn’t go far enough to address the real problems that exist in this sector.
Merging government agencies with government departments is another area that needs careful consideration. Will there be job cuts, budget cuts, or will HSE-esque monsters emerge from this particular attempt at reining in spending? It all remains to be seen.