Budget 2012 Blog

I am really proud of our first Budget. It manages to wonderfully combine the protection of those in need with the necessary trimming of sails. Old Age Pension, Carers Allowance, Jobseekers Benefit, Jobseekers Allowance, Disability Allowance, Disability Benefit and Single Parent Allowances and Widows Pensions have all been kept at current levels. This is certainly testimony to the part that the Budget is socially progressive and progressive.

This is matched by a real effort to create jobs through the provision of capital and the labour activation fund for long term unemployment. This is all material with necessary investment in Innovation Research and Development. Surely the essence of good budgetary policy is the protection of direct Welfare payments for those who need them paralleled by job creation initiatives. Welfare payments must be there to support and maintain but not as an end in themselves.
Welfare payments area a right but the recipients also have a right to fuller opportunities to participate in society, the reform of the socially regressive Universal Social charge us a major advance. While achieving so much in the Social Welfare and employment spheres this Budget is true to the requirements of the I.M.F/EU Deal with a €3.8 billion or 8.6% reduction in the Budget Deficit. This is necessary to maintain cash flow in our economy but it is also required to regain our economic sovereignty and restore both international and domestic confidence in our economy. That return of confidence will in turn create the jobs that are so badly needed. To achieve the budget deficitary reduction there were only one of two big ticket items that could be used. Either Income Tax is reduced or VAT on higher end goods is increased. The latter was enshrined in the I.M.F/EU Deal albeit in a more staggered fashion. Best research suggests that while no means ideal a VAT increase is the less damaging to economic activity. People will spend Income more readily in the absence of direct taxation. The real issue with Cross Border shopping is currency exchange and the cost of low end goods. While we would prefer to be leaving the Value Added Tax untouched the least damaging choice was made.

For my constituency the preservation of the Disadvantaged Area Payment for Farmers is hugely important as it constitutes almost their disposable income in many cases. This has been achieved. It has immense implications for our small rural towns. In the circumstances we have crafted a socially progressive budget while adhering to rigorous budgetary requirements.

Senator Joe O'Reilly representing Cavan & Monaghan 2010. | An ExSite website