Labour alternative budget versus Fine Gael alternative budget

DJP

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I have to say I am impressed by what Eamon Gilmore had to say on Tuesday when he said that Labour would make equal cuts between current and capital spending. I MUCH prefer this than Fine Gael's 3:1 approach.

I was impressed by Richard Bruton's last alternative budget. I thought it was fair.

This December I will be looking at both the Labour and Fine Gael alternative budgets closely but given the different approaches as outlined that they will take I am sure that I will prefer Labour's. I am left wing but I am not going to join Labour as they do not officially aspire to a united Ireland but given how starkly different their approach will be to Fine Gael's for the upcoming budget I will likely vote for them if there is an election next year specially on account of it. The way I see it is that middle income groups can't take much more of a hit in the next few budgets and the lower income groups can barely take any although I agree that welfare will have to come down. Projects like Metro North may create 20,000 or 30,000 jobs but they will only be for the lifetimes of the projects and they cost too much for the situation we are now in.
 


LeDroit

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Gilmore didn't say equal cuts to current vs capital spend nor did FG say they'd split cuts 3 to 1 across current and capital spend. They were both referring to the spilt of Cuts in general vs Tax increases. For Labour to seek a €7.5 Billion tax increase (we take in €30 Billion presently) would utterly destroy economic activity in the country, eliminate investment and remove all work beyond necessity. It would utterly eradicate the concept of reward in the economy. It'd be the disaster we know Socialist envy theory brings about.
 

DJP

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We may have to wait right up until Budget day until find out. If Labour have been wasting our time then a lot of people are going to be p***ed off. Of course Labour don't want to hit middle and lower income groups but they should have said something like "We are going to try our best to make sure they are hit minimally" instead of saying "Middle and lower income groups can't be hit anymore" or words to the effect.
 

Grumpy Jack

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I have to say I am impressed by what Eamon Gilmore had to say on Tuesday when he said that Labour would make equal cuts between current and capital spending. I MUCH prefer this than Fine Gael's 3:1 approach.

I was impressed by Richard Bruton's last alternative budget. I thought it was fair.

This December I will be looking at both the Labour and Fine Gael alternative budgets closely but given the different approaches as outlined that they will take I am sure that I will prefer Labour's. I am left wing but I am not going to join Labour as they do not officially aspire to a united Ireland but given how starkly different their approach will be to Fine Gael's for the upcoming budget I will likely vote for them if there is an election next year specially on account of it. The way I see it is that middle income groups can't take much more of a hit in the next few budgets and the lower income groups can barely take any although I agree that welfare will have to come down. Projects like Metro North may create 20,000 or 30,000 jobs but they will only be for the lifetimes of the projects and they cost too much for the situation we are now in.
Capital projects create jobs - cutting the capital budget is short-sighted and simply repeating the mistakes of the 1980s when capital spending ground to halt. When the economy took off in the mid-90s we suffered because of a massive infrastructure deficit because we ignored capital development through the 80s and early-90s.

Labour saying they will cut capital spending is their cowardly way of saying they won't tackle out of control current spending which is one of the main causes of our current woes.

Projects like Metro North and Dart Underground will pump hundreds of millions in taxes and other spending into the economy over the six years from 2012 through to 2018 creating between 20,000 and 30,000 jobs, as you said. Metro west and the planned new Luas lines will follow creating more construction jobs.

Once completed and operational they will allow for tens of thousands more jobs to be created along the routes because the existence of high quality public transport links will make these areas more attractive for inward investment. Fingal CoCo and other agencies believe 37,000 jobs alone can be created in the area between Ballymun and Swords once Metro North is operational. The lines will be there for a century or more so jobs will always be created close to them - just as jobs have been created along the existing Dart and two Luas lines.

Iarnrod Eireann has predicted 12,000 jobs will be created once the Dart Underground has been built - 2,000 in employment nodes close to each of the six new DartU stations in the city.

Fine Gael are right to say that they will protect capital spending - they have obviously learned the lessons of the 1980s when the 82-87 FG-Lab govt abandoned the majority of capital projects, including the original three-line Dart system serving Howth, Ballymun, Blanchardstown, Clondalkin, Tallaght and Bray.

Current spending is the problem it accounts for 80% of day-to-day expenditure. And that needs to be cut back significantly.

On Drivetime on RTE Radio One today, health policy expert Sara Burke explained how nearly €2billion could be trimmed from the health budget WITHOUT affecting frontline patient services. I was dumbstruck at how much is being spent and wasted on health with little or no accountability. She explained how it was a politicial problem because govt won't take on vested interests across the health sector. She said Harney had made a start but more political will was needed. Listen to the discussion yourself. It was just after the 6pm news.

javascript:showPlayer('/radio1/player_av.html?0,null,200,http://dynamic.rte.ie/quickaxs/209-r1-drivetime-Thursday.smil')
 
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TommyO'Brien

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I have to say I am impressed by what Eamon Gilmore had to say on Tuesday when he said that Labour would make equal cuts between current and capital spending. I MUCH prefer this than Fine Gael's 3:1 approach.
Sorry but you misunderstood both parties. Neither was talking about a ratio of capital to current.

They were talking of the ratio of spending cuts to tax increases.

Labour want 50:50 between them both. Fine Gael wants 75% of the money to come from cuts and 25% from tax increase.

You got the wrong end of the stick, I'm afraid.
 

The Dude

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We both know the predictions for next year are 2% and perhaps 3% annually from 2012 to 2014, inclusive. Three threes are nine and two makes eleven, and a quarter of that is 2.75. That is where we are getting the average. It is significant that the 2% figure for next year is not sufficient to allow the Minister to take a quarter of €15 billion as the correction for next year. The Minister will have to do more up front, as he says himself.
A very small variation has a huge effect here. Davy’s growth forecast for 2011 is 1.9%, and 2.2% for the subsequent years up to 2014. That would drive the correction up to over €20 billion. On the other hand, the ESRI has updated its high growth target to assume an average annual growth of 4.5%. Maybe it is right or perhaps it is wrong. They have two scenarios of high growth and low growth. If its high growth scenario is right and instead of 2.75% the annual growth rates were 4.5%, a smaller package would be needed. We would achieve the 3% budget deficit target in 2014 with a cut of only €9 billion. That is a long way short of €15 billion.
That's what Michael Noonan said in the Dáil this week. Fine Gael, for all their posturing, are as reluctant to face reality as anyone else.

This €9billion figure of theirs is a joke, a soundbite to win over the electorate
 

DJP

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Gilmore didn't say equal cuts to current vs capital spend nor did FG say they'd split cuts 3 to 1 across current and capital spend. They were both referring to the spilt of Cuts in general vs Tax increases. For Labour to seek a €7.5 Billion tax increase (we take in €30 Billion presently) would utterly destroy economic activity in the country, eliminate investment and remove all work beyond necessity. It would utterly eradicate the concept of reward in the economy. It'd be the disaster we know Socialist envy theory brings about.


Sorry but you misunderstood both parties. Neither was talking about a ratio of capital to current.

They were talking of the ratio of spending cuts to tax increases.

Labour want 50:50 between them both. Fine Gael wants 75% of the money to come from cuts and 25% from tax increase.

You got the wrong end of the stick, I'm afraid.
I know that now.

I agree with Labour that those who have the money should pay more. I am sure that Labour are not in favour of significantly hitting middle and lower income groups. How much can be saved by having a 48% tax rate for those on more do any of you know?

I would also be in favour of significantly hitting the captial spenditure budget. If the budget this year is as bad as it is supposed to be then I would favour not going ahead with Metro North in the short term.
 

TommyO'Brien

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That's what Michael Noonan said in the Dáil this week. Fine Gael, for all their posturing, are as reluctant to face reality as anyone else.

This €9billion figure of theirs is a joke, a soundbite to win over the electorate
You are writing rubbish. FG did not produce any €9b figure. Noonan pointed out that it was impossible to predict the amount because of the variables. He pointed out that using the ESRI variables would produce a €9b while others' would produce €20b. There was no way of knowing what would be the correct one, especially when all the government's other predictions have been totally wrong. It could be any total from the €9b to €20b.

But why bother letting facts get in the way of your ill-informed rant, eh?
 

Grumpy Jack

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I know that now.

I agree with Labour that those who have the money should pay more. I am sure that Labour are not in favour of significantly hitting middle and lower income groups. How much can be saved by having a 48% tax rate for those on more do any of you know?

I would also be in favour of significantly hitting the captial spenditure budget. If the budget this year is as bad as it is supposed to be then I would favour not going ahead with Metro North in the short term.
48% tax rate on €100k upwards will bring in €350m in a full year. The only way to significantly increase the income tax take will be to tax from the bottom up - cutting allowances and credits and narrowing the tax bands - bringing more earners into both the standard and higher rates. Labour are either refusing to face that reality - or deliberately lying to the people until they are elected when they will then do a u-turn and raise taxes for everyone. With Spoofer Gilmore at the helm it is hard to tell which.

Metro North will cost €75m in 2011 and €175m in 2012 for enabling works and land acquisition. After that the PPP construction contract begins and the State won't have to pay anything until 2017 when the line is operational - and the economy is well into recovery mode.

The contract itself will pump more money into the economy during construction than that €250m outlay over the next two years and the €170m already spent on the project between design, PPP tender, planning process and land acquisition.

If Metro North is cancelled it will be for political reasons, not financial reasons. That would be cutting off our noses to spite our faces. It will be more short-term thinking at the expense of long-term planning.

Capital projects create jobs which take people off the dole and into work where they start paying income tax and spending money, thus contributing Vat and excise duty. Putting thousands of people back to work will cut the deficit quicker than any cuts. That's why cutting capital expenditure is both short-sighted and economically illiterate. If Gilmore is thinking along those lines then he really is no more than Bertielite and Labour FF in red shirts.

Ironically, it was Labour and Joan Burton who claimed every lost job costs the State around €20k per year in lost taxes and welfare payments. Therefore, using the Burton formula, every 10,000 jobs created has a net benefit to the State of €200m. Create 50,000 jobs on capital projects across the country and the benefit will be €1bn. In fact it will be much more because people will be in a position to spend again thus bringing in more to the exchequer and also creating other jobs with more net savings to the State, and so on, and so on....
 
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Right is right

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I know that now.

I agree with Labour that those who have the money should pay more. I am sure that Labour are not in favour of significantly hitting middle and lower income groups. How much can be saved by having a 48% tax rate for those on more do any of you know?

I would also be in favour of significantly hitting the captial spenditure budget. If the budget this year is as bad as it is supposed to be then I would favour not going ahead with Metro North in the short term.
You do realise that the people who have more money are paying the vast majority of the income tax already??

I suppose you are also aware that the lower income earners pay less tax here than nearly every other OECD country and that our welfare payments are nearly the highest in the world???

Cutting back on capital expenditure in order to keep borrowing to pay current expenditure is the type of short sighted idiotic policies that screws this country up time and time again...
 

The Dude

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You do realise that the people who have more money are paying the vast majority of the income tax already??
They also have the vast majority of the wealth, something that's often ignored.

The average annual disposable income of the top 10 per cent of households in 2009 was €127,000.


Bottom ten was approx €11,000.

The top 5% in this country hold 40% of the wealth.
 

Right is right

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The top .5% of income earners in Ireland pay approx 18% of all income tax and the top 6% pay 5-% of all income so they are paying more than their fare share....especially with nearly half the working population paying nothing apart from the levy...The highest rate of tax here is already higher than in nearly all OECD countries already.

Irish lower paid workers are paying less tax than nearly every other European Country. We have the highest starting threshold for tax credits etc.

How can Ireland tax and grow? Thoughts for Budget 2011 | Ronan Lyons
 

The Dude

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Our cost of living is higher than most other European countries too.

Fact is that we need money circulating, and higher earners are less likely to spend a significant per centage of their disposable income, choosing to save it instead.

The lower paid workers will spend their share, taxing it is unproductive.
 

Red_93

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Gilmore didn't say equal cuts to current vs capital spend nor did FG say they'd split cuts 3 to 1 across current and capital spend. They were both referring to the spilt of Cuts in general vs Tax increases. For Labour to seek a €7.5 Billion tax increase (we take in €30 Billion presently) would utterly destroy economic activity in the country, eliminate investment and remove all work beyond necessity. It would utterly eradicate the concept of reward in the economy. It'd be the disaster we know Socialist envy theory brings about.
Yi know LeDroit, things like water charges would be regarded as tax increases, and if you oppose them you're a hypocrite.
 

Right is right

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Our cost of living is higher than most other European countries too.

Fact is that we need money circulating, and higher earners are less likely to spend a significant per centage of their disposable income, choosing to save it instead.

The lower paid workers will spend their share, taxing it is unproductive.
Dublin ranked 42 most expensive in the world and 15th in Europe is hardly higher than most countries these days....
 

The Dude

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Dublin ranked 42 most expensive in the world and 15th in Europe is hardly higher than most countries these days....
But you don't deny that it disposable income for the lower paid is more productive to the general economy than that of the higher paid?
 

Oak Tree

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Labour proposing to raise taxes twice as much as FG just to protect vested interests in public service unions - it's v obvious to see
 

Odyessus

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48% tax rate on €100k upwards will bring in €350m in a full year. The only way to significantly increase the income tax take will be to tax from the bottom up - cutting allowances and credits and narrowing the tax bands - bringing more earners into both the standard and higher rates. Labour are either refusing to face that reality - or deliberately lying to the people until they are elected when they will then do a u-turn and raise taxes for everyone. With Spoofer Gilmore at the helm it is hard to tell which.

Metro North will cost €75m in 2011 and €175m in 2012 for enabling works and land acquisition. After that the PPP construction contract begins and the State won't have to pay anything until 2017 when the line is operational - and the economy is well into recovery mode.

The contract itself will pump more money into the economy during construction than that €250m outlay over the next two years and the €170m already spent on the project between design, PPP tender, planning process and land acquisition.

If Metro North is cancelled it will be for political reasons, not financial reasons. That would be cutting off our noses to spite our faces. It will be more short-term thinking at the expense of long-term planning.

Capital projects create jobs which take people off the dole and into work where they start paying income tax and spending money, thus contributing Vat and excise duty. Putting thousands of people back to work will cut the deficit quicker than any cuts. That's why cutting capital expenditure is both short-sighted and economically illiterate. If Gilmore is thinking along those lines then he really is no more than Bertielite and Labour FF in red shirts.

Ironically, it was Labour and Joan Burton who claimed every lost job costs the State around €20k per year in lost taxes and welfare payments. Therefore, using the Burton formula, every 10,000 jobs created has a net benefit to the State of €200m. Create 50,000 jobs on capital projects across the country and the benefit will be €1bn. In fact it will be much more because people will be in a position to spend again thus bringing in more to the exchequer and also creating other jobs with more net savings to the State, and so on, and so on....



I agree with your argument, but I am puzzled by this:


That's why cutting capital expenditure is both short-sighted and economically illiterate. If Gilmore is thinking along those lines then he really is no more than Bertielite and Labour FF in red shirts.

When did Bertie cut capital expenditure?
 

Grumpy Jack

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I agree with your argument, but I am puzzled by this:





When did Bertie cut capital expenditure?
I meant Ahern was short-sighted and economically illiterate. Everything he did was for a quick fix today or to buy a vote tomorrow without any thought for the long-term consequences. I fear Gilmore is no different.
 


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