Plus ça change, plus c'est la même chose -“the more it changes, the more it's the same thing”. No we’re not getting high falutin’ here at ISME, just reflecting on yesterday’s budget. Despite the realities of Brexit staring Irish businesses in the face - with a Sterling exchange rate above 90 pence to the Euro – and all of the darkness that entails for Irish exporting manufacturers, the wisdom of government was to do…nothing.
Balanced Books? That’s for the little people
The national books haven’t been balanced for years upon years as we continue to rack up debt – and yesterday’s numbers show we’ll continue to spend another €40m a week, borrowed, to keep the show on the road. Yesterday’s small print implied we may balance government spending by 2019, but as any decent economist will affirm, on the economic time continuum, anything over 18 months is near enough to being meaningless. Fun fact: ten years ago, our national debt was €36bn, equivalent to a debt of €8,470 per head of our population. Today the debt is roughly €210bn, or €45,800 per head. Less than a third of that can be blamed on the banks. See what we mean by ‘little people’? Our grandchildren are going to inherit that debt, and pay it for us. Bless them.
€2 million for bogs
In the meantime the fiscal envelope was opened and money was sprinkled out for Gardaí, for teachers, for health workers, for anyone who might cause the hodge podge government any grief. It also included a random €2 million pot for raised bogs. Pork barrel politics or what? There was money for everyone except for entrepreneurs. Yes, the people who create the jobs, that pay the taxes that keeps the circus on the road.
A promise made to increase the Earned Income Tax Credit to €1,100? Broken.
The programme for government promise to match the UK’s CGT for entrepreneurs. Broken.
The promise to ‘make work pay’? Tax thresholds remain too low so we consider that broken.
3% USC on incomes over €100,000? Arbitrary and anti-entrepreneur. Inequitable.
Securing new sources of enterprise funding? Failed.
What did the Troika ever do for us?
Knowing what is potentially in the State’s money pot early in the year, via the horribly named fiscal space, is a good thing (a fallout, let us remind ourselves, from having the Troika telling how to run our finances) but it means that media commentary is now even more focussed on whether it’ll be €5 for old pensioners or 50c on a packet of cigarettes. This is all minor detail.
The best little…oh, forget it
The reason we have been given early sight of the budget is so that we can have a vision for where our State spending should bring the nation’s economy. Do you remember An Taoiseach’s famous phrase about Ireland being the best small country in which to do business? We at ISME, for one, are none the wiser, after yesterday, how and when this is going to be achieved. No change so.