From Prosperity to Austerity 04.12.12

Budget 2003 versus Budget 2013 TEN years ago as Prosperity Ireland collectively debated the merits of Champagne versus Cava, timber v composite decking or Bundoran v Bulgaria for that holiday home from home, Finance Minister Charlie McCreevy was putting the finishing touches to his Budget 2003. Economic growth forecasts were 3½ per cent; employment was set to rise by 11,000 with joblessness at just 5¼ per cent and falling. There were some 45,000 first time buyers poised to get on the property ladder encouraged by thousands of euro in mortgage interest relief extended from five to seven years. Fast forward to Austerity Ireland and we're contemplating whether to eat grub past its "best-before" or "use-by" dates and wondering if the wrap-around decking could be ripped up for firewood. In contrast to a doubling of the Hearing Aid Grant as provided for in Budget 2003, many would say the Government of 2013 is just not listening. There were three key objectives to Mr McCreevy's boom-time Budget 2003, namely: to "protect the weaker sections of society"; to "invest in the future" and to "secure stable public finances to safeguard the gains we have already made". The three key objectives for the Minister for Austerity, Michael Noonan, in Budget 2013 is to cut spending, increase taxation and ultimately to persuade our Troika paymasters to keep our very unstable public finances on life support. In a recent joint statement, Mr Noonan and Public Expenditure Minister Brendan Howlin revealed that Ireland's deficit for the first nine months of the year was €11 billion. They said it was "still too high" and they were "committed to reducing it further in the coming years". That ongoing commitment to cutting spending and squeezing revenue from the proverbial stone will be revealed this Wednesday when Mr Noonan gets to his feet to deliver Budget 2013. It will be a far cry from the days of decking and dream dormers, three holidays a year and hummers. Below is a selection of what was announced in Budget 2003 compared to what is widely speculated to feature on Wednesday.

Budget 2003	Budget 2013
PAYE annual tax credit up by €140 to €800.	Tax credits to remain unchanged.
First Time Buyer Mortgage Interest Relief upped by a quarter to €4,000 p.a. single and €8,000 couple and extended from five to seven years.	Property tax holiday for first time buyers (although first time buyers are as rare as hens' teeth).
Old age pension rates up by €10 per week.	Old age pension to remain unchanged (other benefits in firing line).
Child Benefit increased by €8 (first two children) to €125.60 a month and €10 (third and subsequent children) to €157.30.	Child Benefit to be cut by €10.
Dole increased by €6 per week.	Dole to be means tested after nine months.
Back to School Allowance up by €30 to €150. More funding for school meals.	Education Minister, Ruairi Quinn must find €20m in savings.
37,400 taxpayers taken from tax net.	Do we even have 37,400 taxpayers?
An extra €209m to build national roads.	Make do and mend.
€186 million in personal tax reductions.	PRSI set to increase.

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