Wednesday, December 05, 2007

INSIDE POLITICS - BUDGET 2

Well, he moved big on stamp duty. A huge overhaul to tackle a market in which he said the "dynamics had changed" (the opposition translated that as a 'slump'.

Senator Eoghan Harris sitting in the senators' section at the top of the chamber looked like the cat that got the cream - expect a big dose of triumphalism in the Sunday Indo next weekend.

Elsewhere there were few surprises. Anything that could have been a surprise (motor tax and VRT) were already flagged. Most of the stuff that was eye-catching (reduction on duties on credit and debit cards at the expense of the banks; 30c increase on cigarettes; tripling of the income threshold for medical cards where there is a child under 18 with intellectual disabilities) will not cost a huge amount either way; and were gestural rather than substantial.

The macro picture was as he predicted. Overall there will be an increase of 8.6% in spending (8.2% in current spending; 12% in capital spending)mistake in l. He has prioritised the NDP, the health services, education (especially to cater for the 13,000 new schoolchildren coming on stream this year) and R and D.

Cowen's priorities have always been tilted more to the lower paid (more than his predecessor that is). And so the increases in tax credits; widening of bands, and above-inflation increases in social welfare.

As for the Green Budget, it just didn't have the impact it should have had. A couple of colleagues felt that the Greens didn't get as much as they should have and that stamp duty eclipsed. My own belief is that a huge mistake was made when somebody in Government leaked the Vehicle Registration Tax (VRT) details to two Sunday newspapers a fortnight ago. That completely removed the element of surprise from the Carbon Budget, rendering it a bit of an anti-climax.

1 comment:

Dan Sullivan said...

The problem for me is that the 0.9 deficit is completely dependent on spending actually being controlled and tax revenue growing according to the prediction, with bench marking 2 coming down the pike (as the yanks would say).

24,000 new jobs is a massive drop from the existing figure, Cowen said 72,000 was the previous number I think.