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Austerity Budget 2012 Key Points and Budget Protest
Property taxes, PRSI increases, Children allowance cuts
The key points so far are increases to PRSI working out at about €250 per year per person. Children allowance cut by €10. Property tax set around €500 per year for a Celtic Tiger era house. 10 cents on the pint.
Cuts to electricity allowance and telephone allowance for OAPs. The devil will be in the details.
March to the Dail this evening for the Budget 2012 protest. Image courtsey WSM photo stream
From about 4pm onwards today there was a protest outside Leinster House where a large crowd had gathered.
The PR machinery in the weeks leading up to this budget were constantly warning us it was going to be tough. The idea seemed to make it sound worse so that if it was slightly better than the worse conditions then people wouldn't think it was so bad and hence would be less inclined to complain afterwards. However everyone will be hit and the initial figures suggests it will be anywhere from a minimum of €250 to well over €1000 when all is considered.
Some of the key elements are:
1. Children allowance cut by €10 per month. Drops to €130 from €140.
2. Property tax at 0.18% up to €1m home. For average Dublin home of say €250,000 this is €450 per year. And rate is 0.25% for house valued over €1m
3. PRSI -abolition of the weekly PRSI allowance for workers. Estimated average worker to pay an extra €264 per year
4. 10 cents on the pint of beer, cider and spirits and cigarettes by same. €1 on a bottle of wine.
5. Third level student admin fee currently at €2,250 to rise by €250 pear year for three years. So will be €2500 in Sept 2013, €2750 in Sept 2014 and €3000 in Sept 2015
6. Cuts to electricity allowance for OAPs.
7. Cuts to telephone allowance for OAPs. Reduced by 50% to €9.50 per month
8. Prescription charges for medical card holders from 50 cent to €1.50
9. Cuts to respite care grant by by €325 to €1,375 per annum.
10. No cuts to corporate welfare as the corporation tax will remain unchanged
11. Capital Acquisitions Tax up from 30% to 33%
12. Civil service numbers to be cut by 38,000 to 282,500 by 2014 from a peak of 320,000 in 2008
13. Duration of Jobseeker's Benefit reduced by three months, from a year to nine months
14. Maternity Benefit to be taxed from 1 July 2013
15. Threshold for Drug Payment Scheme increased from €132 to €144 per month. The threshold was €90 only a few years back
16. Motor Tax rates to increase. For 1.0 litre increases €14, up to 1.1 litre by €21, up to 1.2 litre by €23, up to 1.3 litre by €25, up to 1.4 litre by €27, up to 1.5 litre by €29 and so on.
Some key points to note:
It was reported this evening that Minister for Finance Michael Noonan said Labour’s proposal for a 3 per cent increase in the universal social charge (USC) for those earning €100,000 was rejected on the advice of the multinational sector. -Well what do you know? So who is calling the shots here? Certainly not our "elected" representatives but the corporate sector who have bought have sold politicians for many decades now.-
100 Garda stations to close: Yet the government still finds the money and resources to have a huge Garda and general security presence up at the Gas terminal in Bellanaboy in Mayo to help secure the giveaway of the estimated €540 billion worth of natural gas which was handed over for free to international corporations (e.g. Shell) by successive corrupt politicians from Ray Burke to Bertie Ahern. -Lesson to learn is that government don't really care about crime and people being robbed and assault. They put their money where their mouth is and that is protecting large corporations rob us of our resources and give them huge leeway when they pollute.
Deferral Scheme Allowed for Property Tax = An Inheritance Tax for the poor:
According to the Local Property Tax document put out by the government, you will be able to defer payment if you are unable to pay. BUT it says:
Interest will be charged on deferred amounts but at a lower rate (i.e. 4% per annum) than the rate charged in default cases (i.e. 8% per annum). The deferred amount, including interest, will be a charge on the property. Deferred property taxes and interest will have to be discharged on the sale/transfer of the property.
What this really means is that if an OAP has an house and they can't pay then when the house is transferred to their children for inheritance the money will be taken then. For the top 20% of this country this situation is extremely unlikely to occur. However for those nearer the bottom, it means the one chance they might have in their life of getting a few quid will be taken from them and the probability of this will be higher the poorer they are. Now if there is say a person (probably middle aged) caring for a parent who is unable to afford the new property tax and that carer is also not in good financial health and is living at home then when they go to get that home when the parent dies, the state will want its slice and that person is likely to be kicked out of their own family home especially if they don't have the cash to pay.
So take an average house in Dublin valued at say €250k -perhaps built in the 1970s. The property tax would be close to €500 per year. After 10 years of deferral, this is not just 10x€500 but accounting for the interest rate would be about €6243. For 15 years it is: €10412. In effect an older person who can't pay ends up effectively transferring that tax burden onto their siblings. But again it must be stressed this situation is only going to realistically affect people already at or below the poverty line.
Dail Proceedings for Budget Day can be found below. It covers the speeches and some details of the budget.
And Budget documents are here: http://budget.gov.ie/Budgets/2013/2013.aspx
Stephen Donnelly makes a compelling speech against budget cuts
Protest outside the Dail on Budget 2012 night (Weds 5th Dec 2012)