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Pensioner

07/12/2006 Good but not good enough. That's pensioner Albert Connor's verdict on what the Budget delivered for older people, writes Ciarán Brennan.

Mr Connor welcomed the increases in contributory pensions to €€209.30 per week and non-contributory pensions to €200 per week.

"But pensions started from a low base, so it's good but not good enough," he said.

"The increase in the tax band for old people to €19,000 for single and €38,000 for married couples is welcome, but it still doesn't take much to put you into the tax band."

However, Mr Connor was pleased with the Minister's decision to remove the over-65s from paying Dirt on savings.

"The fact is most older people are not into long-term savings schemes. They want their money to be reasonably well available but standard deposit accounts over the past number of years gave very low returns. But small and all as the interest paid was, you paid Dirt. So this is a step in the right direction. It's very good not to have Dirt deducted," he said.

The impact of the 50 cent rise on a packet of cigarettes on inflation was a concern, he said. Wage demands in the future will take higher inflation into account and this will impact on the prices of other goods and services for everyone and especially older people and the less well-off, according to Mr Connor.

"Wage demands affect everybody because it drives up costs across the board," he said.

While the reduction of the top rate of tax by 1 per cent to 41 per cent was welcome, Mr Connor feels it would have been better if the Minister had reduced some indirect taxes.

"If the Minister had put the same amount of savings into one of the indirect taxes, it would have been much more beneficial to the less well-off," said Mr Connor.

Teacher

Primary teacher Fidelma Sheridan had mixed feelings about the Budget. On the one hand she was happy with what the Budget delivered for workers and first-time buyers, but on the other hand, she felt it did very little for education.

"It was a missed opportunity to invest in early childhood education where we have the lowest investment in Europe," she said.

"It invested in childcare but it didn't invest in early childhood education, which is the next thing that is coming down the line. The back to school allowance for clothing and footwear, which is under child welfare rather than education, amounted to nothing but petty cash.

"It could also have been an opportunity to reduce class sizes which are the second highest in Europe."

In terms of her own personal circumstances, Ms Sheridan said the measures to assist first-time buyers, particularly the proposal to double the ceiling on mortgage interest relief, would help her in her quest to own her own home.

"It has definitely given me an incentive to do something about it this year. It has been good for me in general," she said.

Ms Sheridan agreed with the Minister's comments that any stamp duty cuts would more likely than not be incorporated into the sale price of a house and end up in the pocket of the seller.

"If he did reduce the stamp duty, it might just have inflated the price of houses so perhaps it was wise not to have done anything about the stamp duty," she said.

The reduction of the top rate of tax from 42 per cent to 41 per cent would also benefit her and she said she was happy with the various income tax measures.

"It was a good budget for workers, for first-time buyers and for business, but there was nothing there for education."

Businesswoman

While the Budget did not deliver the cut in Vat that she wanted, businesswoman Claire Cunningham was happy with Brian Cowen's measures to help small and start-up businesses.

"I don't see a massive benefit for our own company but I think what he has done for business overall is positive," she said.

"His recognition of, and focus on, the number of small businesses out there and the employment they create is good."

Ms Cunningham was particularly pleased that the Business Expansion Scheme will be continued for another seven years and welcomed the increase in the investment limits per company from the existing limit of €1 million to €2 million and the increase in personal investment limits from €31,750 to €150,000 per annum.

"It is a very significant jump and gives people a greater opportunity to invest in start-ups," she said.

Measures introduced in the Budget would also reduce the administrative burden for many small companies, according to Ms Cunningham.

"Removing the requirement on start-up businesses to file preliminary tax in respect of their first accounting period is welcome," she said.

"Another measure that will be welcomed by a lot of people is the increase in the Vat registration turnover from €27,500 to €55,000 for services and €35,000 to €70,000 for goods. It is still a bit low but bigger than last year, so that will benefit start-ups and small businesses."

The decision to change the frequency of Vat payments for smaller firms from six Vat returns to three each year in some cases, and to two each year in other cases will do a lot to reduce the administrative overheads for small companies, said Ms Cunningham.

She also welcomed the €70 million in tax credits for investment in research and development but described energy measures as weak and said the Minister could have done a lot more to encourage business to look at greener measures.

"I think companies are ready to look at the energy issue and I don't think he has done much to incentivise them to do that," she said.

Trainee

There were a lot of missed opportunities in yesterday's Budget, according to Natasha Dempsey.

The part-time student, who is also on a community employment scheme with Ballymun Welfare Rights, said she saw nothing in the Budget which would help people on social welfare return to the workforce.

"Minister Cowen had the power to address a lot of the issues that affect people living in poverty in Ireland and I don't feel they were dealt with," she said.

She was particularly critical of the social welfare and children's allowance increases.

"The €10 increase in child benefit wouldn't be enough to get a child's hair cut," she said.

"The €20 increase in the lowest rate of social welfare is going to be taken back at the end of January when the general prices of goods and services go up," she said.

More should have been done to deal with spiralling day-to-day living costs such as electricity and fuel, she said.

She saw no mention of the family income supplement and little action on social housing, issues which would have to be addressed to enable unemployed people make the jump back into full-time employment.

However, she welcomed the doubling of tax relief for first-time buyers.

"It's a welcome change of people trying to get access housing," she said.

However, Ms Dempsey was critical of the increase in the old age pensions which she said could have been more generous given the resources at Mr Cowen's disposal.

"People at the lower end of the scale are not coming out any better off," she said.

"This Government gives a little but takes back a lot."

© 2006 ireland.com