The FBD Blog – investments, insurance, pensions, savings in Ireland

As I drove to the home of a client yesterday, a friend called me and mentioned some developments in the Budget. I didn’t thank him as I had decided to have a Budget-free day in the car and was happy with silence rather than listening to the Minister and the heckles.

Plus, I find it much easier to read it all the next day; the Irish Times website has enough detail to keep you going until the next Budget – hopefully, that’s a year away!

My favourite bits (with apologies to all Public Servants) were:

1. The Minister declaring “The Worst is Over”. I am told that there is a Lenihan gene that means they cannot avoid massive sweeping statements. Even if the worst is over economically, the lagging indicators such as unemployment will make it feel like it isn’t. I can imagine this phrase being thrown back in Minister’s face for some time to come.
2. Our Rugby OAPs are heading to Galway for a game at the weekend. I admired the ambition of our Prop who declared that he would “save €1.20 for every 10 pints” he drank after the game!

I came across this just today – an interesting take on our current predicament, where Joe who “used to be a plumber” wonders that while we all bail out the bankers, who is going to bail him out?

For an in depth Budget commentary from the Irish Times, please click here. Meanwhile, Eoin Fahy of KBC Asset Management has some interesting thoughts on his blog on how the Budget has set out to address aspects of the economy’s current crisis.

- Ian Cooke

Share this on: Twitter | Facebook | Stumble Upon

Brian Lenihan’s 2010 Budget is his third in a little over a year and contained little by way of surprise given the leaks over the last few days.  Public sector pay was cut by €1bn, other current public spending including social welfare by €2bn, and capital spending by €1bn. Key features of the Budget are listed below.

1. Cuts in public sector pay amounting to €1bn. The first €30,000 of salary be cut by 5%, the next €40,000 by 7.5%, and the excess will be cut by 10%.
2. A €1bn cut in capital spending.
3. A €760m cut in social welfare spending, implemented via a €8 per week cut in most social welfare rates (apart from the state pension which was left unchanged). Child benefit cut by €16 per month.
4. A cut of 0.5% in the standard rate of VAT from January 1st, bringing the rate back down to 21%.
5. A cut in excise duties on alcohol, designed to discourage cross-border shopping. The cut is equivalent to 12c off a pint of beer, or 60c off a bottle of wine.
6. A carbon levy on fuel, effective from today for home heating fuel, diesel and petrol, and at varying dates in 2010 for coal and peat. The levy is about 5 cents on petrol and diesel, 6% on natural gas, 10% on briquettes, and 11% on coal.
7. A minimum average tax rate of 30% (plus PRSI and levies), up from the current minimum rate of 20%, for higher earners who claim relief from various tax incentive schemes .
8. A car scrappage scheme which will give a grant of up to €1,500 where a new car is being bought and a car of more than 10 years is being scrapped as a result, provided the new car is in band A or B for emissions.
9. A merger of PRSI, the health levy and the income levy, at an unspecified rate, in 2011.
10. For new entrants to the public sector only, a new pension scheme which will be more in line with private sector pensions, and the normal retirement age rises to 66.
11. A review of public sector pensions.
12. A prescription charge of fifty cents for every prescription made on the Medical Card scheme.
13. Mortgage interest relief being phased out, to be gone entirely by 2017. Full relief will still be available for first-time buyers until July 1 2011

More Budget commentary will follow shortly.

- Brendan Lee

Share this on: Twitter | Facebook | Stumble Upon