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Comprehensive Analysis and Critique of Budget 2013

Government claims that Budget 2013 was “as fair as it could be” are untrue.

For the second year in a row this Government introduced a Budget that was deeply regressive, both socially and economically. It did nothing to foster economic recovery or to provide a vision and direction for the country.

Socially regressive

Socially it hits people on low incomes, including the working poor, more than it hits the better off.  Low-income` households have taken a wide range of ‘hits’ . The cumulative impact of the various initiatives contained in Budget 2013 on those who are vulnerable will be devastating in the years ahead.

The change in PRSI, for example, will hit the working poor far more than it will hit those with incomes above €100,000 a year (see p. 3).

Budget initiatives on pensions will take less from the pensions industry than before and will leave the pension tax-break in place, both of which benefit the better off. 

The carbon tax was increased but no compensating mechanism was put in place for poor or rural households who are again hit disproportionately by this tax. At the same time Government found €70m to provide tax relief on excise duty for auto-diesel to road hauliers.

Economically regressive

Economically it fails totally to address unemployment.  Domestic demand is set to fall again and the projected increase in employment is aspirational and minimal.

Unemployment is set to fall but this will occur because emigration will continue.

Without a substantial increase in investment there will be no increase in jobs on the scale required. Without jobs there will be no recovery. Without recovery Ireland will remain mired in austerity for the foreseeable future.

In reality the current approach by Government to resolving Ireland’s series of crises is not working. In fact it is running down the economy. 

Despite taking almost €28bn out of the economy in tax increases and expenditure cuts since July 2008 we are still left with 700,000 people at risk of poverty, falling domestic demand, record levels of long-term unemployment, rising emigration and 100,000 households on waiting lists for accommodation

Document can be downloaded here