I didn’t follow the budget very closely this year. We can thank the magnificence of Shane Duffy and James McClean for that. I was a little bit too hungover to spend the day reading opinion pieces in the Irish Times or listening to the various hacks on the radio spout their nonsenses. By the time the nine o’clock news came on, however, I had recovered sufficiently to give it a watch. For the duration of RTE’s summary of the budget, my girlfriend got an earful about what I believed was wrong with the budget, the government, and the country. Since it’s been several months since my last blog post I figured I’d try to put some of my complaints into words for the benefit of you, the reader. What follows are one or two of the more coherent components of my rantings.

Tax Cuts vs Spending

Watching the Budget 2018 coverage on RTE news last night, one could see the usual breakdown of how people would be affected over the coming year. Given prominence in this regard were the cuts to income tax and USC. The changes were extremely minor; if you earn €75,000 in the coming year you will now get an extra 6 euro a week. If you earn €35,000 per year you will get an extra 5 euro a week. A salary of €20,000 will net you an extra, life-changing, weekly figure of €1. Of course, nobody earning twenty grand a year will be celebrating an extra one euro a week, nor will those in higher brackets be excited with their extra weekly loose change. As Labour’s Alan Kelly put it, “it’s the cup of coffee budget – the cup of coffee is what you get from this budget”. Whilst the changes are negligible in terms of people’s pockets, the cost to the state amounted to 335 million euro.

Obviously, this is money that could have been better spent. There are multiple crises that the country must contend with. Hundreds of thousands are on hospital waiting lists. Infrastructure such as rural broadband or water infrastructure is underfunded. There is a chronic shortage of housing in Ireland and people are literally dying on the streets of our cities for want of accommodation. These are problems that won’t be solved overnight, nor even over the course of a year. Still, instead of implementing these “cup of coffee” tax cuts could there not have been a bit of prioritising? The €335 million would have been much better spent on beginning to tackle the housing or health crises instead of basically throwing everyone a bit of loose change. Oh well, we might be facing into yet another wasted year of worsening crises but at least Fianna Fail and Fine Gael can go into the next election saying they cut peoples taxes. Enjoy your coffee.

Sin taxes

Apart from income tax rates, another thing worth looking out for on budget day are the taxes on consumption (such as VAT or excise duties). Yesterday, smokers were once again hit and a box of 20 cigarettes has gone up by 50c to €12. Also noteworthy were the introduction of new taxes on sugary drinks (an extra 30c per litre on drinks with over 8g of sugar per 100ml) and sunbed services (the Vat on services offered by sunbed salons goes from 13.5% to 23%). These three taxes are examples of what are sometimes called “sin taxes”, i.e. taxes on activities that are deemed bad for society. The idea is that as these products or services become more expensive people will be discouraged from using them. The result is that the cost to society will be lessened and the extra revenue can help pay for the negative impacts of such activity.

Smoking cigarettes, drinking sugar and lounging on sunbeds are not good for your health. And even though I partake in most of those activities, I find it hard to disagree with the imposition of the new taxes. If the government are to place taxes on goods then it makes sense that they place them more heavily on goods that are harmful. My complaint though is that the idea of a sin tax is not taken to its logical conclusion.

Sin taxes should be deployed much more widely to try to alter behaviour for the better. Increasing taxes on excessive plastic wrapping on food would be one example (to cut down on waste). Another would be taxing fast food at a higher rate (to tackle obesity). But the concept should apply not only to ordinary consumers. Industries that pollute our environment should be taxed more than those that do not. Companies offering low wages and poor working conditions should be taxed more than those that look after their staff. If we’re going to attempt to change behaviours for the better through our tax code let’s do it properly and comprehensively, rather than through ways that are going to disproportionately hurt poorer sections of society. Of course, the governing class in this country do not have the imagination required to think in this way.

Lack of strategy

Which brings us to the concluding section of this “mini-rant”. As with every single budget I can remember, Budget 2018 has once again revealed the enduring lack of imagination that the political establishment in Ireland have. It’s the usual Fine Gael/Fianna Fail rubbish; cut income taxes because there’s an election soon, throw a fiver a week at the pensioners and unemployed to keep them quiet, and be sure to provide plenty of goodies for our private sector buddies to keep their profits flowing.

Budget 2018 has shown no real macro-economic plan for the future, no real strategy or vision for the type of country that Ireland should be. Apart from a couple of piecemeal items, Budget 2018 offers nothing in terms of the trials that lie ahead. And there are enormous challenges in the medium term. Aside from our own domestic issues, in the coming years we are going to have to deal with climate change, Brexit, the possible re-emergence of the Eurozone crisis (precipitated by a disintegrating Spain perhaps), increased American protectionism, and the coming automation of the workforce as AI increasingly takes over the work that people presently do.

These are issues (and there are many more that could be identified) that could challenge the very viability of our state and we need to start facing up to them. A government of real leaders would be bringing us a transformative budget that starts the process of equipping us for a future that contains many uncertainties whilst at the same time tackling the myriad domestic crises that we face presently. What we don’t have though is real leaders in our government; we have middle-management, at best.