Ireland budget: Cowen to cut salary by €14,000. And his point is?
The Irish are facing the worst cuts in the history of the state and Cowen will leave office by taking a cut in salary
Today the Irish public will feel the chill winds that follow the IMF and EU bailout with the most draconian budget in the history of the state this afternoon.
But the country’s leaders still don’t get it.
The Irish Times reports that Brian Cowen is going to lead from the front – he’s going to take a €14,000 (£12,000) pay cut. For a man whose ratings have collapsed to just 8%, this is an extraordinarily empty gesture.
First it won’t affect Cowen – it’s an early Christmas gift for an opposition leader. Second, it is isn’t a massive cut and the Taoiseach, whoever that will be, will still be one of the best paid leaders in the world.
Maybe he was taking a leaf out of Gordon Brown’s book. He, if you remember, slashed his pay knowing he also was about to leave office, leaving David Cameron with a remuneration package down from £194,000 to £142,000.
If the Irish Times report is proved right later today, Cowen or his successor will still have a headline salary (without pension, car, accommodation etc) of €214,000.
Following the hue and cry over the use of state cars at a recent Fianna Fáil summit in Farmleigh House, the government will trim down its fleet and start pooling cars, several papers report this morning. One of the government jets will also be mothballed.
Public sector pay continues to be a controversial issue, reflected in your comments on the blog on the subject yesterday.
Today’s budget is expected to include a €250,000 cap on bosses’ pay in the public sector, although this is unlikely to cover the semi-state bodies, including the Electricity Supply Board and the Dublin Airport Authority whose bosses take home €750,000 and €550,000 respectively, or those already under contract.
These gestures will be cold comfort to the public who are facing child welfare cuts, income tax hikes and a reduction in the minimum wage.
Budget headline changes
• The introduction of a “universal charge” to take the place of the PRSI (social insurance) and the healthy levy. This will hit higher earners and those on substantial pensions – the old PRSI ceiling of €75,000 will be removed.
• The narrowing of the income tax bands forcing those on as little as €15,000 to pay tax. The threshold currently starts at around €18,000 a year.
• No stamp duty for those in arrears who trade down.
• A cut of 5% in social welfare payments including dole.
• Removal of tax advantages for private and personal pensions. This is expected to include a cap on the tax-free lump sum people can take out of their pension in the first year. Previously this was not capped.
• A cut of €10 a month in child benefit for the first and second child and €20 for subsequent children.
• An increase in excise duty on petrol and possibly alcohol and cigarettes.
• Registration fees to go up from €1,500 to €2,000 for third-level college. This will only apply to the first child – a “crumb of comfort” says the Irish Independent.
• A cut in airport tax from €10 to €2 per flight
Elsewhere in the papers today Independent columnist Sam Smyth notes that Brian Lenihan is unperturbed by yesterday’s Financial Times survey of European finance ministers which ranked him the worst out of 19.
He notes the same paper also voted his predecessor, one Brian Cowen, the best finance minister four years ago. Don’t expect too much humble pie at the FT this morning.
But if you want a little lift before the frighteners are put on you at 3.45pm today, enjoy the fact that Ireland can still punch above its weight culturally – something the government should bear in mind when it considers the tax breaks it gives TV and film production.
Yesterday we welcomed Stephen Fry to our shores for a cameo role in the Irish language soap opera Ros na Run on TG4.
And Eddie Izzard was in Dublin filming as Long John Silver in Treasure Island.
Fry told his two million followers on Twitter that he got slightly inebriated with the Connemara hospitality before going for a spot of lobstering.
“I shall lurch slightly on account of six pints of Guinness hospitably poured down my throat”.
He might help the country off its knees by giving tourism a lift. Last night he told followers that “Connemara is pretty extraordinary. It’s like the sea - wet and very cold, but actually it’s beautiful.”
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