There were scuffles this evening between protestors and 26-County Garda police at the Dublin parliament following arguably the harshest budget in living memory.
Despite many rumours, leaks and open warnings, the budget speeches by Fine Gael Finance Minister Michael Noonan and Labour’s Public Expenditure Minister Brendan Howlin came as a profound shock this evening.
Over a thousand protestors gathered on Kildare Street outside the Dáil, amid a mood of outrage rarely witnessed in the 26 County State.
The announcements of new austerity cuts and taxes for 2013. comes as hundreds of thousands of Irish families are already facing a deepening, personal financial crisis following years of austerity at the hands of the Fine Gael/Labour coalition, and previously, the Fianna Fail/Green Party coalition.
Noonan confirmed that a new property charge will be levied on homeowners, of between 300 and 500 euro per annum. Its formal announcement, replacing the the household charge, comes as property prices contine to collapse and tens of thousands of homeowners are mired in negative equity.
Anti-household charge campaigners warned tonight that they plan to launch a similar campaign against the proposed property tax. Spokesman for the Campaign Against Household and Water Taxes, Gregor Kerr, said the tax was a declaration of war on people.
“Campaign members across the country will respond to this provocation by re-doubling and intensifying both the boycott of the property tax and protests against it and against the austerity agenda,” he said.
But the property charge was only the tip of a fiscal iceberg which reaches well into four figures per annum for most Irish families.
There were dramatic increases in income taxes, with a hike in PRSI of 264 euro for all workers (regardless of income) and cuts in child benefit of 120 euro per child per annum for everyone (also regardless of income).
One journalist estimated that, with other tax hikes and cuts included, the average two parent-two children family, in an average detached home with a typical 1.6 litre car, would be more than 1,300 euro poorer next year.
Better-off pensioners and the self-employed were also hit with an additional hike of 3% in the Universal Social Charge, from 7% to 10%, adding thousands to that bill.
Worst hit, however, were pensioners, unemployed and students, who face a range of devasting cuts and charges. Announced were wholesale changes to the medical card scheme, drastic hikes in student fees, and the axing of a range of critical allowances. An estimated twenty thousand pensioners have had their medical cards withdrawn, while student fees are set to incrementally increase by 50% in the coming three years.
Sinn Féin Public Expenditure and Reform Spokesperson Mary Lou McDonald TD described the Budget 2013 as “disgraceful”.
“Fine Gael and Labour’s Budget 2013 announcements have failed the fairness test,” she said.
“This budget is deeply unfair to those on low incomes, to children, to single parent families, to homeowners in negative equity and to the elderly.
“The treatment of children in this budget is disgraceful. It runs against all the fine words and concern for child welfare expressed in the course of the children’s referendum only some weeks ago. The cut to child benefit, increase in pupil teacher ratio, and the abolition of the PRSI exemption will all impact badly on kids.”
Ms McDonald’s comments were barbed with unusually stinging criticisms of the coalition, denouncing it as “lily-livered” and “gutless”.
“The spectacle of a government that talks tough when punishing its own people and yet time and again returns home from European Council meetings with its tail between its legs is truly pitiful,” she said.
“If you are unable to secure a deal on the debt burden, on the Anglo promissory note, if you are incapable of deficit reduction that doesn’t crush low and middle income families -- then you are not up to the job of government.
“It is actually that simple. You are now twenty months in office. This is your second budget.”
She said the government had nowhere to hide. “You choose the well-worn path of the Fianna Fáil gang that went before you. You persist in their failures,” she said.
“Fianna Fáil’s so called ‘National Recovery Plan’ contained many of the deeply unfair and damaging measures you have introduced since entering Government. Fianna Fáil brought this state to its knees. Now you, in Labour and Fine Gael keep it there.
“Fianna Fáil sheltered the rich, protected wealth, insulated privilege. Now you follow suit. Your choice is to protect those at the top and punish the rest.
“Don’t come into this Dáil again and waffle about fairness. You are not fair. You couldn’t handle fairness. Your budget is testament to that.”
MAIN POINTS OF BUDGET 2013
* New Local Property Tax to be introduced on 1 July 2013; The tax will be charged at 0.18 per cent of the market value for houses worth under €1 million; Houses valued at more than €1 million will be charged at 0.25 per cent of market value.
* A bottle of wine will be more expensive from midnight because of a €1 rise in excise duty;
* Pints of beer and cider will jump by 10c;
* Excise duty on spirits will rise by 10c per standard measure;
* The duty on a packet of cigarettes will increase by 10c;
* Roll your own tobacco will increase by 50c per packet.
* The minimum level of annual contribution from the self-employed will be raised from €253 to €500;
* Unearned income – for example rent receivable, investment income, dividends and interest on deposits and savings – will be subject to PRSI from 2014;
* The PRSI - free allowance has been abolished meaning a loss of €264 per year for employees.
* From 2014, tax relief on pension contributions will only subsidise pension schemes under €60k per annum;
* The reduced rate of Universal Social Charge for those over 70 with an income of more than €60k will be discontinued from 1 January 2013;
* The rates of both VRT and motor tax across all categories will increase from January; the increase in motor tax for most categories of vehicles is 7.5 per cent, rising up to an extra €117 a year.
* Carbon tax is to be extended to solid fuels on a phased basis over two years. A rate of €10 per tonne will apply from 1 May 2013 and increase to €20 the following year;
* Corporation tax is to remain unchanged;
* DIRT (Deposite Income Retention Tax) is to increase from 30 to 33 per cent;
* Capital Acquisitions Tax is to increase by 3 per cent to 33 per cent;
* The threshold to which Capital Acquisitions Tax applies is to be reduced by 10 per cent;
* From 1 July 2013, Maternity Benefit will be treated as taxable income.
* People over 70 with an income of above €600 per week will have their medical card withdrawn
* Couples with an income of €1,200 to €1,400 per week will have their medical card withdrawn
* The prescription charge payable by medical card holders will increase from €0.50 to €1.50 per item.
* Child Benefit has been cut by €10 per month;
* The duration of Jobseekers’ benefit will be cut by 3 months;
* The supports available as part of the Household Benefits package (electricy, telephone and free TV licence) (usually pensioners) will be reduced. Changes to the electricity allowance will also be implemented.
* The higher education student contribution will increase by €250 each year between 2013 and 2015; This means fees will rise from €2,250 this year to €3,000 in 2015.
* Increase in the student-teacher ratio;
* Reduction of €13 million in the allocation to VECs;
* Reduction of €25 million in the allocation to higher education institutions;
* Sick leave arrangements for teachers and SNAs will be made similar to those working in the Civil Service.
* The Dáil system of ‘unvouched’ expenses and severance payments to resigning Ministers to be ended.
* Back to school clothing, footwear allowance rates cut from €150 to €100
* Back to Education book Allowance cut from €300 to zero.
* Increase in motor tax for most categories of vehicles is 7.5 per cent, rising up to an extra €117 a year.