A CAREFUL BALANCING ACT - The seventh austerity budget since 2008 - and this Government’s third - contained further pain for citizens and an erosion in public services and entitlements. But it also offered the prospect of economic growth with an unexpectedly large job creation programme taking centre stage, writes the Irish Times in today's editorial. The newspaper said the Budget reflected a careful balancing act as the Government, encumbered by the highest deficit within the EU, attempted to bolster public confidence while preparing to exit its bailout programme. There was no silver bullet to deal with past excesses, just a slow grind of incremental change as costs were pared back and established entitlements were stripped away. Budget 2014 was no longer about funding a bank bailout but about bringing public expenditure more into line with government income. The unstated hope was that accelerating economic growth in the coming years would increase exchequer income and close the deficit gap. A great deal has changed. Time was when excitement was generated when a minister for finance held up a briefcase. Now, the positioning of crash barriers outside the Dáil fulfils that role while public expectations have become sharply negative. The budget date has been moved to October, allowing for an examination of public expenditure programmes before the money is actually spent. This approach, as Minister for Public Expenditure Brendan Howlin put it, will be “the new normal” and part of a political reform programme. But some things never change, such as the taxation of “old reliables”. In that regard, Minister for Finance Michael Noonan announced a 10 cent rise in excise duties on a pint of beer and on a packet of cigarettes - 50 cent went on a bottle of wine.
A BRAVE, CLEVER AND BALANCED BUDGET BUT IT WILL STILL HURT - This is not, perhaps, the Budget most people expected. After all the tough talk within the Coalition - and to the troika - about less austerity, the result may feel like a dose of cold water, says the Irish Independent's editorial today. The newspaper says there are many unpleasant measures in the Budget. The cuts to the telephone allowances for the elderly and the jobseekers' benefit for the young, will bring a flood of complaint. There is real political danger for the Government in the attempt to save €130m on the cost of medical cards. The harsh truth is that even a reduced adjustment of €2.5 billion means a harsh Budget. A less obvious truth is that this is in many ways a brave, clever and balanced Budget. The Government will need more courage if it is to keep the more contentious measures intact, but its backbone will be stiffened by the fact that it really has nowhere else to turn. It is by no means the biggest austerity Budget since the remorseless process began in 2008, but it may well have been the most difficult. The Department of Finance now puts economic growth this year at a miserly one-fifth of one per cent. That is deeply disappointing. It knocks the 2013 targets askew and means more new tax revenues and service cuts in 2014 than would have been hoped six months ago. At the same time, political necessity demanded some sense of stimulus and a feeling that corners were being turned.
BUDGET 2014 - AUSTERITY CANNOT BE MASKED - When Finance Minister Michael Noonan and his sidekick Brendan Howlin took to the stage in the Dáil yesterday, it was expected that their double shuffle would mask the effects of a budget that will only emerge in the coming months. Last year, it was mothers and young families who faced the onslaught of cuts and increased taxes. While child benefit has been left untouched this time round, it is the old who will suffer most from Ireland’s seventh austerity budget in a row, says today's Irish Examiner editorial. In coalition, Fine Gael now has the distinction of presiding over the most austere budgets in the history of the State. It is hard to imagine how the Taoiseach can characterise this death by 1,000 cuts as anything other than an attack on our most fragile and vulnerable sections of society, notwithstanding elements that will assist growth and prosperity. In a way, this year is simply a continuance of last year’s budget, where Mr Noonan justified the introduction of a property tax by arguing: “Property taxes are used across the world as they are better for the protection and creation of jobs than taxes that increase the cost of employment.” This year, the tax will hit homeowners when they are least expecting it. He also insisted that while Irish corporation tax is still considered untouchable, taxes on the elderly and local businesses are not. Under Budget 2014, employers will have to cover the first six days of pay for a sick staff member. Until now, illness benefit kicked in after three days. The move comes into effect from January, placing an additional cost burden on companies. Hardly a job creation measure has been left untouched.
CHANCE TO DRIVE RECOVERY MISSED - There are many criticisms that could be made of Budget 2014, according to the Irish Daily Star's comment piece. The newspaper says that the Budget holds little for young people with reductions in Jobseeker's Allowance and hikes in college fees. It will leave pensioners worse off with the removal of the telephone and funeral grant. It will leave pensioners worse off with the removal of the telephone allowance and funeral grant. It will hit savers below the belt with a whopping rise in DIRT. And medical card holders will be targeted in a new campaign to save - allegedly - €113m. And of course we must remember that these groups - and others too - have already been badly hit in the six previous austerity budgets. But the main criticism of this Budget is that it holds no Big Idea, no grand scheme, no expansive breadth of vision of Ireland of the near future.