Breaking on the news wires now
Cutting the budget deficit by €6bn
3 to 1 ratio of spending cuts to tax increases
Expected 1.7% growth in 2011
Blue Horseshoe
IRELAND SAYS MOST SAVINGS TO BE MADE THROUGH SPENDING CUTS
IRELAND TO TARGET 2012 BUDGET SAVINGS OF EU3BLN-EU4 BLN
IRELAND SEES 2010 UNDERLYING BUDGET DEFICIT AT 11.9% OF GDP
IRELAND SEES 2011 BUDGET DEFICIT AT 9.25%-9.5% OF GDP
IRELAND SEES DEFICIT NARROWING TO 2.75-3% IN 2014
IRELAND SEES AVERAGE REAL GDP GROWTH OF 2.75% THROUGH 2014
IRELAND SEES GOVERNMENT DEBT AT 101% OF GDP AT END-2014
Goody, another boom.
I note that the 6bn adjustment is not going to have any impact on personal disposable income. This is quite a feat which should be rewarded by a special prize for our D/finance folks
Will they announce an exchequer borrowing requirement for 2011 (~9.25%-9.5% OF GDP)? Does this include rolling over existing debt?
It suggest the tax raise will be in the form of removal of exemptions/reliefs, particularly pension relief.
€4.5 billion in cuts, €1.5 billion in taxes.
Real GDP Growth Assumption of 2.75%?!?
How credible is that with the kid of cuts they are proposing?!?
Even the US wont achieve that and they are still spending with gay abandon
I suspect the market will discount that assumption heavily
What kind of tax changes are needed to raise €1.5bn?
Any indication if it will be income tax or combination of income tax, consumption taxes and new taxes?
Well, in meaningless statistics world, assuming we’re using the short scale/US billion (1,000,000,000); the latest QNHS says there’s 2,152,700 people in the workforce, so it’s only an extra € 696.80 each per year if its all direct taxation. Loose change in the world of an Irish politico I suspect.
Of course, there were only 1,859,100 actually reported as in employment, so if we develop a conscience and only tax the working then it’s € 806.84 per year. Merely walking around money for a minister one would have thought.
It’s a whole other world of pain if we’re using the long scale billion/1,000,000,000,000!
Has anyone actually clarified which billion the DoF is using in communications? 
Blue Horseshoe
Classic, scary thing is they actually may need to clarify!!
The scary part, as documented elsewhere is that allot of workers pay little or no tax so the burden is likely to fall on less thna 1 million workers or e1,500 per person, not so bad if you say it fast. However, more than E100 per month could push alot of people over the edge, particularly those struggling with bubbilicious mortgages. The top earners typically have tax avoidance schemes in place, one can only hope that somehow Lenny cna place an adequate burden on that group, but prior budgets have rarely suceeded in doing that without encompassing every PAYE worker.
Another challenge is how to increase taxes while improving competitiveness, the multis will not want to be dealing with wage pressures in an already expensive Ireland, while the professionals would try to pass it on to consumers, and the public service will demand their version of equality. The great pity is that tax loopholes are unlikely to be seriosuly dealt with, but maybe this will be Lenny’s great stand and he may just go after them, however, that would alos have consequences in terms of likely contraction of big boy activity in the state. Damned if you do and damned if you don’t when you back yourself into a bind it can be hard to loosen the knot.
Did Lenihan not say last night that an average family will be 6k worse off after Dec?