We launched our pre-budget analysis and proposals last week.  The core  focus of our approach is that we need to support jobs, with €340 million of targeted tax cuts this year, sort out the national finances over a four year period and reinvent Government. We propose €3.5bn in savings  for 2009 – [1/3 in new taxation, 2/3rds from spending cuts.]

We have identified a six point plan to support jobs:

1. Invest boldly for 100,000 new jobs

- our Rebuilding Ireland Policy was launched last week, click here to read the policy document.

2. Protect the jobs that we still have.

Spend €377m this year and €645m next year on the following measures
- Cut the Lower rate of VAT from 13.5% to 10% until 2011.
- Reverse the 0.5% increase in the standard rate to 21.5%
- No employers PRSI for new jobs.
- Abolish airport tax
- Support SMEs through a series of measures.

3. Repair the public finances quickly.

- Focus on the structural deficit – 60% of the repair to be completed within 21months
- Complete the heavy lifting by 2010 and commit to the elimination of the structural deficit by 2012.
- Political accountability with consequences for deficit reduction.

4. Reinvent government to cut costs.

-Target 20% cut (€7bn) in the cost of running Government by 2012.
- Competent accountable government with fewer agencies and ministers.
- Hiring restrictions and redundancy programme for 15,000
- Pay freezes and cuts at the top end.

5. Keep the incentive to work and invest.

- Commit to 12.5% corporation tax
- No change to 20% or 41% rates of income tax.
- Broaden PRSI base.
- Temporary solidarity tax on high incomes (2% over €100k; 4% over €250k).
- Cap subsidy for high end pensions.

6. Confront costs in sheltered sectors.

- Extend pay freeze to banking and utilities
- Name and shame rip off merchants
- Tackle rising insurance costs
- Cost benchmarks for regulated utilities

In terms of tax increases and spending reductions, the split in our proposals is about 1/3 tax increases; 2/3 spending programme reductions.

The impact of our measures would constitute the following savings:

2009 €3.5bn
2010 €9.0bn
2011 €12.5bn
2012 €15.0bn

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Posted in National Issues by Cllr Laura McGonigle 1 Comment