Sunday, October 20, 2013

A Budget for Sloth

It's been a few days since Budget 2014 was announced, and the newspapers and airwaves have been full of detailed analyses and commentary. But if I had to sum up the Government's budget message in just two words, they would be:

don't bother

Don't bother saving: we'll take nearly half of the (pathetically low) interest you'll earn. Don't bother with a pension: we'll take a piece of your pension contributions every year, while increasing taxes on what you eventually receive. Don't bother providing for your family's health care: we'll make it even more expensive for you by reducing incentives to take out private health insurance, while providing a free medical card for your children even if you can afford to pay for their care yourself. Don't bother going for that promotion, pay rise or bonus, we'll tax you at the sharpest increasing income tax rate in Europe if you are single.

In fairness, it wasn't just Budget 2014 that majored on the 'don't bother' message. All the previous ones did too, along with several of those from the previous government. Sure, we have to balance the books:  borrowing €1 billion a month because we're spending more than we're taxing isn't exactly sustainable, especially when you are one of the most indebted countries in Europe. But a policy of 'don't bother' sure won't do it.

We need to change the incentives for people and businesses to invest, hire, save, provide for themselves and to innovate. There was precious little in the budget that met these criteria. And no, incentives for people who have been unemployed for 15 months (not 14 or 16 mind) to set up their own business - by which stage they have no capital, no network, no motivation and probably no ideas - is a mere fig leaf. Which is probably unfair to fig leaves...

As ever, Irish people in businesses and communities - managers and employees - will get on with the task of surviving and thriving despite the Government, not because of it. One initiative I'm a non-executive director of - Third Space - recently raised €15,000 via the Irish crowdfunding initiative Linked Finance in just a couple of weeks from over 100 private citizens keen to see a successful venture succeed further.

Despite everything, we are blessed in this country that there are still many good people out there who do bother...

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