Thursday, 7 December 2006

How green was the budget?

This from The Green Party:

“Securing prosperity for all and ensuring an energy secure economy is what should have been at the heart of this budget. Unfortunately this budget falls short on both of these fronts.


“On the income tax front, the increase in personal tax credits and bands are long overdue but the gains from these increases mean that we are only now reaching the levels which credits and bands would have reached had they been index-linked from day one.

“The 1 per cent cut in the higher tax rate clearly favours high earners. A single person who earns just over the average industrial wage will only gain approximately €6 per week, whereas a high earner, such as a cabinet minister on €250,000 a year, will gain €50 per week. Consequently, at least half of the workforce will not benefit from this cut. A more progressive move in the current economic climate would have been to increase the standard tax band further.

“The Government also seems to be engaged in something of a confidence trick by introducing a two and a half percent health levy for those earning close to €2000 a week. This means that any claim the PDs might have of achieving something for their constituency is also immediately taken away by this new measure.

“In fact the PDs have very little to crow about in relation to their tax agenda, having been embarrassingly rebuffed on stamp duty where there is only a small €20 million measure on stamp duty on mortgage contracts; a measure that will benefit all house buyers speculators and first time buyers included.

“More imaginative tax cuts, again with direct social and environmental benefits, would have been to lower VAT rates on products and services linked with energy conservation and renewable energy should be restructured and reduced wherever possible.


“While a welcome short-term response to the housing crisis, it is worth remembering that the increases in mortgage relief were necessary because of this Government’s successive failures regarding the issue of housing price affordability. The increase in the mortgage interest relief is unimaginative and will not help buyers as much as a specific measures proposed by the Green Party, such as relief on stamp duty for older persons who are downsizing and for first time buyers who wish to purchase the property that is being made available as a result of such downsizing


“Despite the Government’s promises to present this budget as a ‘grey budget’, the paltry rise in the non-contributory pensions to €200 a month is the minimum of what is required and is only fulfilling previous commitments. Ireland has the lowest spend on pensions across the EU at just 3.6 per cent of GDP, compared to the EU-25 average of 12.5 per cent. This budget represents no solution to the pensions’ crisis, offering no fundamental reforms to the existing system of tax reliefs which is costly and ineffective and provides no incentives for lower earners to invest in private pensions.


“The measures presented today for carers are long overdue but will not go nearly far enough in addressing the real difficulties faced by full-time carers who cannot access entitlements due to means-testing. Child poverty is rightly prioritised today as an area needing acute attention; the challenge now will be to ensure that that the one third of persons in consistent poverty who are children, are actually lifted out of poverty.

Climate change

“The Stern report has predicted that the costs of combating the effect of climate change are far higher than the cost of preventing it. We should be concentrating on reducing climate change emissions here in Ireland through more investment in renewable energy, public transport and higher building standards.This budget again represents no real solutions to this crisis.

“Instead of facing-up to our responsibilities on emissions, the Government is content to merely buy its way out of the problem. However, even measures which will enable us to do this have suffered unacceptable delays. Out of the €300 million announced for the environment in this budget, €270 million will be spent on purchasing Carbon Credits. Ireland’s failure to meet its Kyoto obligations to reduce greenhouse gas emissions means that two to four million euro will leave the Irish economy every week between 2008 and 2012 to purchase carbon credits. This exemplifies the current Government’s slow and irresponsible approach to climate change and its serious implications.

“The piecemeal efforts such as last year’s biofuels scheme, have suffered from unjustifiable delays in their implementation. The Government must ensure that the small number of new measures announced today on bio-energy crop production must not suffer similar delays. The VRT measures on electric vehicles represent a continuation of current policy, and are unlikely to lead to further take-up. A real response would have been a shift from VRT to excise on mileage which would provide real incentives to the take-up of alternative fuel and would address the environmental cost of driving over vehicle ownership.

“Although it has promised to examine the introduction of a carbon energy tax in the past, this Government has failed to deliver any plans in this area, again in this budget the Government has delayed making any decisions and merely repeated a 2003 commitment to begin examinations in this area. A feasibility study to calculate the cost of administering either a carbon quota or levy system with a few to introducing such a measure should have been conducted when promised.

“While we welcome the extension of the Greener Homes Scheme, even the piloting of a National Home Insulation Programme would have been a small step in the right direction.

“Climate Change proofing should be introduced at all levels of Government. In particular, budget-time offers an ideal opportunity to take stock of our carbon emissions and any missed targets should be accounted for and addressed through budget measures.


“Ireland continues to fall behind most of Europe in its provision of pre-school education. According to findings of recent OECD report, with the exception of Ireland and The Netherlands, most countries provide two years of publicly funded pre-school access from the age of three. Ireland’s childcare costs are among the highest in Europe. The first few years of a child’s life are the most important for its development and this Government has consistently failed in its responsibilities towards early childhood development. Token measures will not address this appalling situation - what is required is free universal pre-school education in the year before school.

“This Government, despite its recent spending announcements, has presided over a situation where Ireland has the second highest class sizes in the OECD. This budget will not see a significant change in this area and the Government will not make good on its commitment to reduce classes for the under-nines. While the measures which target some disadvantaged and special needs children are extremely welcome – if not overdue – the Government’s neglect of this area over the duration of its office, mean that these areas will need continued investment and focus for years to come. Spending on primary level still falls far behind spending on second level and third level education, even though 44 per cent of those in education are in primary school.


“The health service continues to struggle, despite the best efforts of those who work in it. Yesterday there were 240 people lying on trolleys in our hospitals. Waiting times for necessary procedures have not seen the significant cuts that Mary Harney promised when she took office. The Minister also promised to increase the amount of public acute beds in the system, from a position where we have three public beds for every private one, despite the fact that only 50 per cent of people have private health insurance. When will we see the proper priority given to our ailing health service and quality of service provided to all regardless of income?

For a man who has had it all in terms of resources available to him, the Minister for Finance has produced a budget which is less then the sum of its parts. It is not a budget directed at the long term sustainable development of the economy; it is solely directed at the short-term sustainability of this Government.

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