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Budget 2011
Budget 2011 is vital in the restoration of economic stability to our country over the next four years. While it’s not possible to make €6 billion in savings and tax increases without affecting incomes across all sectors of our society, the budget sets us well down the road of achieving a €15 billion correction by 2014, thereby bringing our deficit down to manageable levels. Of course we very much regret that the economy has deteriorated to such an extent, however, we are following a course of action that if followed through, will correct the situation and bring about a far brighter future for our country.
Such was the magnitude of the savings required and the proportion of Government income that goes on social welfare (38%), we could not leave payments untouched. We chose to maintain the Old Age Pension at current levels, as older people do not have the option of going back to work to supplement their income. It should be noted that despite average reductions of about 4.1%, social welfare rates are going back to slightly above 2007 levels and are still high in comparison to our nearest neighbour and many other EU countries. Furthermore, the social welfare allocation of €20.6 billion in 2011 represents a trebling of expenditure by this Government since 2000. No other Government in the history of the State has invested so much in social welfare and I am glad that the Fianna Fáil Party in Government increased considerably and quite rightly social welfare payment rates. Of course we regret the fact that rates have now been cut, but given the economic situation there was no alternative.
While I appreciate that the reduction of credits to bring more people into the tax net may be seen by some as unfair to those on lower incomes, it should be noted that 45% of earners pay no income tax at all. In times such as this, everyone must contribute and the situation remains that those on higher incomes pay a far higher proportion of their incomes on tax, which is absolutely right. Even after these changes, 38% of earners will not pay income tax at all.
Furthermore, it is worth noting that we have a very progressive taxation system where 8% of the top earners pay 60% of the tax. After the budget, the top income earners will continue to pay proportionately the most.
It is important to state that this budget is not just about making savings, as it includes specific job initiatives, as well as a large capital programme of expenditure which will allow the Government to continue spending on schools, health facilities, roads, water and sewerage upgrades, as well as other infrastructure projects. Cavan will, I am glad to say, benefit from this investment through many projects, including the Belturbet bypass, which has been allocated funding to begin construction next year.
There is no escaping the fact that this is a very tough budget. However, for the sake of our future we had no choice but to introduce such measures. The bottom line is that there is no viable alternative to this budget if we want to be able to continue funding our public services such as health, education and social welfare.
People have been asked to make sacrifices; however, the measures that have been announced will set us firmly on the road to economic recovery, through restoring competitiveness and putting in place the right environment for job creation. To raise the hopes of the Irish people that alternative courses of action should be followed, as some political parties are doing, is highly irresponsible and short sighted.
While saying that large savings must be made, the opposition parties appear totally at odds as to how they would do this. What this bodes for any future administration which they might make up seems to suggest only paralysis and indecision, and the consequent deterioration in the State’s finances, more unemployment and less funding for social services.
Budget 2011 contains tough decisions, but it sets the country on the path to sustainable economic growth and more jobs for our people.
