Budget blues as decentralisation on hold, taxes up and elderly hit

The toughest budget since the 80s was promised and Fianna Fáil didn"t disappoint. For Cavan, the decentralisation of the Department of the Communications, Marine and Natural Resources, and with it over 400 jobs, has been put on hold, pending a review in 2011. The cost of almost everything is going to go up with the increase in the standard rate of vate from 21% to 21.5%. The over 70s can say goodbye to their automatic entitlement to the medical card. Although they can expect increases of €7 in their weekly pension and €2 in the Fuel Allowance. And for those who don"t qualify for a medical card or a GP visit card, there is an annual allowance of €400. Hospital charges are also on the increase with the A&E charge going to €100. Workers can expect an additional one per cent income levy on their earnings up to €100,000 and two per cent on earnings over €100,000. The standard rate tax bands are increasing by €1,000 for a single person and €2,000 for a married couple. Parents also took a hit yesterday with cutbacks to the Early Childcare Supplement and Child Benefit for qualifying children over the age of 18. The price of a pack of 20 cigarettes is to increase by 50 cent; the excise on wine is also to increase by 50 cent. For motorists, the price of petrol is to increase by eight cent per litre as the Government raised its levy from midnight. Meanwhile, car tax is to increase by 4 per cent from January for vehicles of less than 2.5 litres capacity and five per cent for vehicles over 2.5 per cent. Overall, the Government is to focus spending in the areas of Social Welfare, Education and Health, which increases in those departments of 8.4%, 2.7% and 2.1% respectively. Decentralisation blow The impact of the Government budgetary cutbacks have hit home in a definite way locally with the deferral of decentralisation for Cavan. The announcement will be greeted with considerable disappointment locally as it was felt that Cavan was one of the locations that was progressing favourably. A site was purchased at Farnham Road by the OPW on behalf of the State over two years ago and the project was earmarked to continue under a design and build scheme whereby a developer would construct the building and then hand it over to the Department for use. However, the normal process of advertising for tenders in the relevant European journal hasn"t been undertaken and therefore no planning application has been submitted . A forward party of about 56 Deparment staff have already transferred to temporary offices in Cavan. The new decentralised Department would have brought 244 jobs to Cavan and was regarded as an important coup for the county town when it was announced by then Minister for Finance, Charles McCreevy, in a previous budget. There is now considerable anxiety as to whether the decentralisation will ever now go ahead and that Cavan is to lose out once more as a victim of circumstances like it did in relation to the Teradyne Inc. Commentary By Sinead Hogan & Linda O"Reilly Declan Ferry, branch organiser, SIPTU Cavan SIPTU Cavan and Leitrim represents over 4,000 workers in this region. Mr. Ferry said he was not surprised by the tax measures introduced in yesterday"s emergency budget but he feels that they will push more people below the poverty line. A two % tax hike on people earning more than €100,000 a year is to be introduced, while workers earning less than €100,000 will see their income levy increase by one %. This has been balanced by an increase in the standard rate tax band of €1,000 for single persons and €2,000 for a married couple. 'The climate we"re in. The economy is in freefall. Some of our members are having their hours reduced to short-time working and some are losing their jobs,' he said. Mr. Ferry agreed that this was one of the 'toughest' budgets since the 80s. Mr. Ferry felt that the half a per cent increase in the standard rate of VAT from 21% to 21.5% would have the greatest impact on ordinary people. 'It will have a big impact on everybody, people on low incomes and across the board. It will have major implications for people"s quality of life. More people will be pushed below the poverty line,' he said. Treasa Quigley, co-ordinator, Cavan County Childcare Committee Ms. Quigley felt that the budget didn"t deliver anything that would improve the circumstances of working parents requiring childcare. She expressed huge disappointment at the decision to cutback the Early Childcare Supplement, current payable at a rate of €275 quarterly for children aged six and under, to cap it at the age of five and a half from January. 'They"ve only just introduced the Early Childcare Supplement and now they"re cutting it back. It"s the one support out there to support working parents. To cut it, it"s not a great start,' she said. Ms. Quigley said that the cutbacks in this area could deter mothers from going back into the workforce. Regarding the 50% cut to Child Benefit for qualifying children aged 18 and over from January and its cessation from January 2010, Ms. Quigley said it would have a huge impact on parents of disabled children over 18 and those with children in full-time education. 'People depend on that to pay for certain things.' The Minister for Agriculture, Fisheries & Food, Brendan Smith The measures taken in yesterday"s budget were driven by the background of the deterioration in the public finances. Minister Smith was speaking after the publication of the 2009 Budget and Public Service Estimates for 2009, which provides €1,803m for his Department. In so far as the agriculture, food and fisheries sector was concerned account had to be taken of the very high level of investment by the Government in recent years in developing the sector. In this regard he pointed out that the Government had committed significant additional financial resources to areas such as the rural environment scheme where the rates of grant had been increased by 17%, the new suckler cow scheme and the farm waste management scheme. Expenditure for that scheme in 2008 will exceed €375 million following the provision of the additional €195 million in recent weeks. The Minister highlighted the fact that, when combined with EU funding of €1.4billion, total expenditure by his Department in support of the agriculture, fisheries and food sector will amount to over €3.2 billion in 2009. Paddy O"Reilly, Cavan Mayor, Fine Gael Town Councillor and recent retiree Cllr. O"Reilly slammed some of the Government decisions in yesterday"s emergency budget, saying that it would hit everybody in society hard but most particularly the elderly in our society. A recent retiree, he has hit out in particular at the decision of the Government to withdraw the automatic entitlement for a medical card for those aged 70 and over. 'The income limits to qualify for the medical card or the GP card are far too low to begin with. Those that just fall outside the qualification bracket will suffer most. Having supported this country during their working lives, they will be left to fend for themselves at a time when medical care will be most important to them,' commented Cllr. O"Reilly. He dismissed the €7 a week increase in the pension and the €2 per week increase in the fuel allowance as being 'a charade'. 'A meagerly €2 a week. A bag of coal now costs about €15 or €16. A paltry €2 wouldn"t even cover the cost of a packet of fire lighters,' remarked Cllr. O"Reilly. Fine Gael Senator Joe O"Reilly Senator Joe O"Reilly noted that there is bad news for Cavan on decentralisation, the future of it being deferred to be decided in 2011. 'My reaction to that is that it is very bad news for Cavan where there was heightened expectation over the years. It"s now live horse and you will get grass.' In terms of education, Senator O"Reilly said that university fees are to be reintroduced by stealth by increasing the registration fees, that the removal of the children"s allowance for over 18s in continuing education will be bad news for many parents and that the €78 million extra capital spending on school buildings will go nowhere near solving the issue. 'Schools like Virginia and Laragh will now be very concerned about their future,' said Senator O"Reilly. Workers have also been hit, points out the Senator. 'The 8% increase on a litre of petrol is a disgrace in a Cavan context, where there is no public transport system such as rail and the car is a necessity to go to work. This is a tax on work for ordinary people. There is also the increase in VAT by 0.5% will have a further depressing effect on an already depressed economy.' Fine Gael Deputy Seymour Crawford 'It"s clear that everyone is going to lose out of this budget,' commented Deputy Seymour Crawford. 'Anyone working will have to pay the 1% levy, which does not take into account family situations or other factors.' From a Social Welfare point of view, Deputy Crawford said that while any increase is welcome, €7 'does not cover inflation' and the €2 fuel increase 'a joke'. Local issues for Deputy Crawford include petrol prices, decentralisation, hits to farmers and the closure of Monaghan Army Barracks. 'In rural Ireland where the car is a vital means of transport, not only is the road tax increased but petrol increasing by 8 cent a litre. The top rate of VAT has been increased to 21.5%. As far as Cavan/Monaghan is concerned, decentralisation is dead and the Department of the Defence is closing the Monaghan Army Barracks.' 'I think the most significant thing from a constituency like Cavan/Monaghan is the removal of the Farm Retirement Scheme as well as Installation Aid to young farmers. Both of these schemes encouraged the transfer of farms to the younger generation, thus maintaining younger people within the structure.' Sinn Féin Dáil leader Caoimhghín Ó Caoláin, TD Commenting on the budget introduced by the Fianna Fáil-Green Sinn Féin Dáil leader and Cavan-Monaghan TD Caoimhghín Ó Caoláin said: 'This is a savage budget of cuts in public services and increases in taxes and charges that will hit people on low to middle income hardest. The levy of 1% on incomes below €100,000 per annum represents a significant increase in tax for the lowest paid. Even those on incomes below the tax threshold, those who pay no income tax at present, are being hit with this levy. It is totally regressive and inequitable.' 'This is a recipe for emigration and Brian Lenihan will be standing at the airport to take €10 flight tax out of your pocket as you leave.' 'The increase in the health budget is well below inflation and will lead to massive cutbacks across the health services. On Budget Day itself one of our largest hospital, the Lourdes in Drogheda, had to close for emergencies as it cannot cope. This budget is a recipe for more of the same,' said Deputy Ó Caoláin noting that at the same time people will be forced to pay higher charges for A&E visits and for medicines, and that means testing for medical card for older people is being reintroduced, ('another example of the totally incoherent health policy of this Government').