Lobby groups respond to Budget

Lobby group/union reaction:The Irish Auctioneers and Valuers Institute (IAVI) welcomed changes announced to the stamp duty regime today but said Ireland's rates remained among the highest internationally.

IAVI president Robert Ganly said: "We welcome the fact that the Tánaiste has moved to simplify the stamp duty regime in the residential sector and to restore certainty to the market.

"The maximum benefit is in the order of €28,750, which is very welcome, but all buyers of second-hand residential properties are beneficiaries. We believe that this is a needed stimulant for the residential market. However, these rates at 7 per cent and 9 per cent remain amongst the highest internationally," Mr Ganly said.

Marian Finnegan, chief economist with the Sherry Fitzgerald Group, also welcomed amendments in the rate of stamp duty on residential property transactions.

"The penalising rate of stamp duty applicable in the second-hand market has for too long acted as a barrier to entry into the established property market and was in effect a tax on mobility. The decision to abolish stamp duty for first time buyers earlier this year went some way to addressing this situation but it was not far enough," she said.

"The 9 per cent rate will continue to apply to the vast majority of commercial property transactions; we believe that this was a missed opportunity to stem the continued outflow of commercial property investment from Ireland," Ms Finnegan added.

Turlough O'Sullivan, director general of business group Ibec said it was "a responsible and prudent" budget.

"The right thing to do now is to maintain the delivery of the National Development Plan in its entirety and to substantially rein in day-to-day spending by government. The Budget does this. The Irish economy is fundamentally sound. As it rebalances, it is especially important that businesses in Ireland can sell their goods and services overseas," he said.

Small Firms Association chairman Pat Crotty

criticised the level of current public spending which is set at 8.2 per cent. "No small business could afford to allow its costs to spiral to this level, and it is critical going forward in a moderately growing economy, that government spending returns to the level of inflation, which the Minister himself has forecasted to be just 2.4 per cent in 2008," he said.

Chambers Ireland chief executive John Dunne said the reform of the stamp duty regime was "reasonable and timely".

"However we fear that an opportunity has been missed to locate this in the context of wider reform of property taxation."

Chambers Ireland also welcomed the "rebalancing" of charges on credit cards and cheques in an effort to reduce transaction costs.

The Institute of Chartered Accountants in Ireland (ICAI) said the Minister for Finance's Budget "avoided the big mistake that could be made at this point in our economic development - retrenchment".

"The adjustments to the stamp duty regime constitute meaningful and imaginative reform. The elimination of the old step system of stamp duties was well overdue, irrespective of the current shape of the housing market."

The ICAI said the decision to allow the Government deficit to increase to 0.9 per cent to allow investment in the National Development Plan to be sustained and increased should promote business confidence.

But Siptu general president Jack O'Connor said the Minister for Finance had "promised very little in Budget 2008 and delivered accordingly".

He said Mr Cowen had failed to seize the opportunity to invest in adult education, training and skills enhancement.

While noting that the Government had met its commitment to increase mortgage income tax relief, he said the other income tax changes were "minimalist and did not even match the rate of inflation".

"Indeed with today's release of data showing that average industrial earnings last June came to €39,000 per annum, the Budget increase in the tax band to only €35,400 will have average earners well inside the top rate of tax."

Mr O'Connor said the increase in health expenditure "appears minimal in the extreme and is hardly consistent with the Government's commitment to the development of a comprehensive health service of the highest quality".

Trade union Mandate, which represents workers in the retail sector and the bar trade, has welcomed the decision to keep those on the national minimum wage out of the tax net.

However, union general secretary John Douglas expressed disappointment that the Minister had not made tax credits refundable and that he failed to reduce prices by cutting VAT rates by 1 percentage point.