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Mitchelstown News from The Avondhu

WAIT AND SEE REACTION TO TOUGHEST BUDGET EVER

With the dust from the emergency budget still to settle, it now appears that there is still worse to come. Minister for Finance Brian Lenihan TD did say that the budget was going to be ‘hard but fair’. It was certainly hard; in fact this has turned out to be one of the toughest budgets in decades. There have been increases in the income levy, the health levy, a reduction in mortgage relief and in childcare relief; diesel and cigarettes have been increased.

However, there is to be no increase in the VAT rate. Local retailers, at least, have welcomed this, “I am glad the VAT rate was not increased but it should have been decreased”, Margaret Hyland of The Scullery gift shop in Mitchelstown told The Avondhu.

Sean Farrell owner of the Centra store was also disappointed that the VAT rate was not reduced, “If the minister had reduced the rate it would have been just what customers needed and would have provided a stimulus to get people shopping. As for the rest of the budget, we will have to wait until May to really see what effect it will have,” Mr Farrell said.

There are to be tax increases for all employees at all levels. For example, workers earning the minimum wage will see an additional 2% taken from their pay - that is on top of the tax already being paid. As you rise on the pay scale, you will see taxes increased by between 4% and 6%. This means that a single income family with one child on €50,000 a year will now pay an extra €4,247.04 a year on top of the other taxes they already pay.

In Mitchelstown, Eamon O’Brien, chairman of the Mitchelstown Business Association (MBA) told The Avondhu of his reaction to the emergency budget; “It was a tough budget. I think everybody was expecting that. For the local economy I would urge everybody to shop and use the local services. We must continue to support our town and community here in Mitchelstown.”

At a lunchtime budget briefing, organised by the Mitchelstown Business Association (MBA) this Wednesday at The Firgrove Hotel, tax consultant, Audrey Crean, told The Avondhu: “This was indeed a harsh budget. In total the Government have increased the tax take by €1.8billion and are to set up a toxic bank to take on the bad debts from the other banks. Some reports put the cost of these loans at close to €90 billion.

"The income tax levy has been reduced to include those who are on minimum wage that is from €18,304 to €15,028. Everyone will be affect by this budget in some shape or form.”

The budget also brings unwanted news for farmers as REPS payments are set to be cut. IFA president, Padraig Walshe called on the Government to make amendments to both the Gross Income Levy and the Tax Credit system to ensure equity of treatment for farmers as self-employed taxpayers, and to recognise the vital contribution of the self-employed sector to national economic recovery.

However, not everyone has reacted negatively to the budget. IBEC director general Turlough O’Sullivan said: “Business considers that this budget is a credible response to the current difficulties in the public finances. Unpleasant though it is for all of us, the increases in income levies announced today are the most effective means of raising revenue with the urgency and simplicity required.”

Published: Friday 10th April 1:01pm

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