Budget reveals all

EDITORIAL

BUDGET 2011 was Brian Lenihan’s Book of Revelations. The book of the Bible of the same name has hardly been digested and analysed to such an extent by academics and the common man.
But unlike Holy Scriptures, the Minister for Finance’s writings delivered a script, which had been an open secret well in advance.
While the hairshirt measures were expected, it wasn’t until Mr Lenihan spoke in the Dáil on Tuesday that it was revealed exactly how the nation would be squeezed to get €6 billion as the first phase in the four-year strategy to make up €15bn in spending cuts and taxation by 2014.
Despite the screams of anguish from all quarters, the Government got safely over the first Dáil vote on the budget on Tuesday night and this will set a pattern for subsequent votes. The budget will pass but the election will not disappear and Fianna Fáil, the Greens and the independents who support them will have to face up to the consequences of their actions.
Taoiseach Brian Cowen, brave or some might suggest foolhardy to the last, has reaffirmed that he will not leave the helm of Fianna Fáil before the election. Potential challengers have dispelled speculation of a mutiny so Captain Cowen will be the last man off the ill-fated Coalition.
Mr Lenihan, the Taoiseach and other Fianna Fail TDs have effectively told us that by dispensing such bitter medicine, they’re being cruel to be kind in the years ahead. The cuts have been felt by everybody in society, right down to the unemployed and low-income sector that sees little hope in emerging from their bleak circumstances.
One of the effects of lowering the minimum wage and the introduction of the universal social charge, along with a cut in children’s allowance, is the potential to create a disincentive to work. An unemployed person, claiming a full range of entitlements, could well end up with more income than his working neighbour being paid the minimum rate.
Fears have been raised by Focus Ireland that the cuts will not only force more people to become homeless but will also act to keep many of the 5,000 people who are currently homeless trapped in the limbo of long-term homelessness. Should we need reminding of the awfulness of being left homeless, just think of somebody you might have seen huddled on a street corner in the sub-zero temperatures of recent weeks.
The budget slashed a massive 36% off the social housing budget and a substantial 6% cut in funding for HSE regions.
We’ve been told the budget is an investment in our future. But where is our future without a well-educated workforce?
In what could arguably be considered to be the worst aspect of the budget, the Government ploughed ahead despite all advice and appeals and staged a serious assault on our education system. 
Ironically, at a time when the construction industry is in meltdown, the Government has decided to cut back on the school building programme; 9% for primary schools, 20% for second level and a staggering 51% cut at third level. If more students are to be encouraged to stay in education longer, where will the facilities be to cater for them? Curtailing capital spending is a short-term solution to keeping cash for other needs but it could jeopardise the smart economy we hear so much about.
Day-to-day funding for all schools, colleges and other education providers is to be cut by 5%. Rural families will see a rise in school transport costs, up by €50 for second-level pupils, with a new €50 fee introduced for primary school children. Those with medical cards are exempt, however.
Third-level student charges are to rise by €500 to €2,000 but the higher charge will be limited to one child per family. Student grants are to be cut by 4% with cuts also for FÁS training allowances and similar supports.
The combination of cuts and increased and new fees come as a survey reveals a significant fall in the international literacy rankings of Irish school students. Irish 15-year-olds ranked fifth across countries surveyed by the OECD a decade ago. In the latest survey, they have dropped to 17th place.
There is also a big cut to funding for certain projects in disadvantaged areas. Drugs Task Force funding is to be cut by 63% while the department’s Educational Disadvantage Fund is to be cut by 60%.
A redeeming feature of the budget in so far as Clare is concerned, is the reaction by the Dublin Airport Authority (DAA) to the reduction in the controversial €10 air travel tax to €3 from March until the end of 2011. The DAA is to introduce a new Growth Incentive Scheme for airlines operating at Dublin, Cork and Shannon airports.
The scheme, which would provide a full rebate of airport charges in respect of passenger traffic at all three airports above an annual threshold of 23.5m passengers, is to encourage overall growth at the airports. Specific targets will be applied to each airport.
This initiative presents a big challenge for the newly appointed Shannon Airport director, Mary Considine since passenger traffic at Shannon has dipped to a projected 1.6m for 2010 from 2.7m in 2009. Shannon will have to fight hard for new business to ensure that the rebate target is achieved.
Clare hoteliers said they believe the reduction in travel tax and the proposed traffic incentive scheme will inject some much-needed growth into the tourism sector.
The Irish Hotels Federation also welcomed the Government’s commitment to broadly maintaining current levels of marketing funding for tourism at €41.5m as a vital investment in the future of the industry. However, Clare hoteliers have specifically requested the Government to provide the necessary funding to Shannon Development to allow it fulfil its tourism promotion of the region.
A silver lining does peek through a few spots in a very gloomy budget document.