There is a lot ot digest in this budget. But, as expected most of the savings have come from public sector pay and a reduction in social welfare spending. I will write a more detailed examination of both the type and effect of these cuts later in the week. Karl Whelan has outlined (very concisely) the main effects of the budget over on Irish Economy.
But, this summary document is most useful in getting an overall snapshot of a) public sector wage cuts (page 27) and b) social welfare cuts (page 21-23).
The main cuts in public sector pay are as follows:
- 5% on the first €30,000 salary
- 7.5% on the next €40,000 salary
- 10% on the next €55,000 salary
It is difficult to assess the social welfare impact of this budget. But, Fergus Finley gave a nice synopsis onVincent Browne last night. €115m will be saved from cutting child benefit. 15,000 children will be pushed below the poverty line. €70m was provided to the drinks industry. €60m to the dog racing industry. More drink, more poverty. A very poor cost-benefit analysis.
The likely net impact of the savings in social welfare will be minimal. The qualitative effect upon many marginal families will be significant. Less money in peoples pocket will mean less spending and less revenue. So, it is anything but a stimulus package.