Budget 2011 Assessment
Special Economic and Pensions Commentary on 2011 Budget from Jim Power, Friends First Chief Economist & Clive Slattery, Pensions Consultant.
Some of the key comments include:
- Compelling evidence that the pace of decline in employment is starting to decelerate
- Government maintaining very tight control over expenditure
- Sharp decline that has occurred in tax revenues over the past three years is now starting to bottom, albeit at very low levels
- It is anticipated that the GGD will be reduced to 9.1 per cent of GDP in 2011 and to below 3 per cent by 2014
- On the taxation side, the key objective is to broaden the tax base and remove the opportunities for high earners to shelter their income from tax
- Tax credits have been reduced by 10 per cent
- Mineral oil tax will be increased by 4 cent per litre on petrol and 2 cent per litre on auto-diesel
- Car scrappage scheme is being extended until the end of June 2011
- Stamp duties on the transfer of residential property is being cut to 1 per cent on properties valued up to €1 million and 2 per cent on amounts over €1 million
- A large number of reliefs are being abolished
- Public sector salaries will be capped at €250,000 and pay cuts will be introduced for the Taoiseach and his Ministers
- Employee contributions to occupational pension schemes will be subject to employee PRSI and the Universal Social Charge
- The annual earnings limit for individual pension contributions is being reduced from €150,000 to €115,000
- Public sector pensions over €12,000 to be cut by 4 per cent
