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Budget 2012: The cuts (and petitions) outlined so far…

Property charges, VAT increases and One Parent Family payments: Looking ahead to some of what may feature in next month’s Budget 2012 announcement.

Image: Mark Stedman/Photocall Ireland

THE MINISTER for Finance Michael Noonan is due to announce a range of new economic measures to adjust public spending by €3.8bn through next year’s budget on 6 December.

Of that adjustment, some €1.6bn will be sourced through taxation, while the remaining €2.2bn of the adjustment figure will be found in spending cuts.

A number of lobby groups, trade unions and community organisations have already begun launching their budget submissions for the minister’s consideration ahead of the anticipated cuts.

Here’s a round-up of those petitions and of the cuts already expected in Budget 2012:

Cuts? What cuts?

  • Minister for Social Protection Joan Burton has played down reports from last week that her department’s budget would be cut by €700m. She said that discussions on the cuts were ongoing and nothing had been fully decided upon, but she was “very confident that we’re not talking about a figure like that”.
  • Meanwhile, the Sunday Times reports today that Minister Burton is considering lowering the age of children covered by One Parent Family payments from 14 years to seven, meaning that the payments would only cover the child until they were settled into primary school.
  • Postgraduate students could lose their grants and maintenance payments as of next year, according to a report in today’s Sunday Business Post. The Union of Students in Ireland has condemned the proposal, saying it would force thousands of postgrads to leave the country in search of study and employment opportunities abroad.
  • Minister for Research and Innovation Sean Sherlock confirmed recently that the Science Foundation Ireland budget would be cut from €160.8m to €156m. Sherlock said that allocations to promote research through Enterprise Ireland, the Tyndall National Institute and the Programme for Research in Third-Level Institutions would stay at 2011 levels through next year.
  • Noonan has indicated that tax revenue-raising measures other than changing income tax bands will be considered in Budget 2012, including increasing carbon tax and VAT, as well as property charges. Property owners will have to pay a €100 charge next year (as was announced in the summer) which will be used to fund local services.

Submissions

  • The Irish Penal Reform trust wants the government to allocate funding towards the construction of a new Cork prison, and says prison service costs could be cut by making better use of open prisons.
  • The Claiming Our Future umbrella group (which includes the ICTU, Social Justice Ireland and TASC) has called on the government to introduce a levy on property and assets worth over €1 million and to eliminate tax breaks for people on high incomes, while also introducing a higher tax rate for those earning above €100,000 per annum.
  • The Carers’ Association says it fears that social welfare payment cuts could see carers’ incomes cut by 40 per cent in Budget 2012 and is urging the government not to cut the half-rate allowance for carers.
  • The national housing charity Threshold wants the government to prioritise sustainable housing solutions in its allocation for tackling homelessness.
  • The Irish Small and Medium Enterprises Association (ISME) says in its pre-Budget submission that the government should include a subsidy scheme for employers to encourage them to take on unemployed people as additional staff, while reducing the top rate of employers’ PRSI to alleviate the costs of doing business.
  • Meanwhile, the Irish National Organisation of the Unemployed (INOU) called on the government to both maintain social welfare rates and provide further training and education options for the unemployed. The INOU also called for the tax base to be broadened by clamping down on tax breaks, but said that people earning less than the national minimum wage should be excluded from paying tax.
  • The UNITE trade union also called for changes to the tax base. It says that removing property-based tax reliefs could raise €450m, while reducing subsidies paid on high-income pensions could raise a further €200m. The union also says that extending the Universal Social Charge and PRSI to capital income would generate €290m.

Read: Noonan announces government’s four-year economic plan >

Read more: Children’s Hospital to go ahead but Metro North and DART underground shelved >

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