There was a mixed reaction to today’s Budget from employers groups and unions.
Ibec said that while it recognised the need to take corrective measures to stabilise public finances it would have preferred a greater emphasis on cutting current expenditure rather than on increasing taxation.
The organisation welcomed the capital investment programme, improvements in the R&D tax credit scheme. It also welcomed the emphasis on increased spending on education and supports for energy efficiency measures in industry.
However, Ibec expressed disappointment that the Government brought forward payment dates for corporation tax, and did not do more to reduce the public service pay
"It is important that this Budget helps position Ireland to trade successfully, especially after the global economic recovery comes," said Turlough O'Sullivan, director general of Ibec.
Chambers Ireland said that while the Minister for Finance was limited in his options, the Budget would do little to help restore consumer confidence. It welcomed the reduction of commercial stamp duty, reaffirmation of the corporation tax rate and changes in local authority funding. But the group expressed disappointment in the decision to increase the standard rate of VAT to 21.5 per cent and the air travel tax.
The Small Firms Association (SFA) said that while the Budget had increased taxes, it fails to reduce expenditure and provides for no public sector reform. The group said the overall thrust of the Budget "failed to make the strategic alignment that the economy needs at this time."
"The SFA believes that the Minister has missed an opportunity to boost consumer spending, by the imposition of increasing the standard VAT rate…this VAT increase will also have a huge impact on those companies operating in the international marketplace, as our current VAT rate Is significantly out of line with competitor countries," said the organisation's assistant director Avine McNally.
Irish Small and Medium Sized Enterprises' Association (Isme) expressed disapointment with Budget 2009 with its chief executive Mark Fielding describing it as a "missed opportunity.
"It is an inflationary Budget, it is not a pro-business – there's almost nothing there for small and medium enterprises who are the backbone of business and employment in this country,' said Mr Fielding.
Siptu condemned the one per cent levy in the Budget as a "crude instrument" that makes middle and low income earners pay for economic crisis.
"While we recognise the reality of the scale of the problem in relation to the public finances, the principle applied should have been to ensure that those who benefitted most from the Celtic Tiger should have paid the most. Accordingly this levy should have had a threshold and been graduated to ensure that no one on average industrial earnings, or less, should have had to pay anything," said Siptu general president Jack O'Connor.
"The imposition of the levy on middle and lower income earners is further exacerbated by the failure to increase tax credits and the inadequate increase in the standard tax bands, not to mention increasing excise duty on petrol, which affects those who have to use a car travelling to and from work," he added.
The Irish Congress of Trade Unions (Ictu) said this evening that Budget 2009 would result in working families shouldering the biggest share of the burden/
Ictu general secretary David Begg claimed the imposition of the one percent levy was arbitrary and indiscriminate and would hit the lower paid disproportionately. He added that he believed the levy would have the effect of virtually "wiping out the extra increase negotiated for the lower paid in the recent national pay deal."
Mr Begg also condemned the rise in the VAT rate as a further attack on the lowest paid and the most vulnerable and expressed concern over stealth taxes included in the Budget.
Impact said the "rough" Budget should not influence the way its members vote in the current ballot on a new national pay deal, even though new levies and increased taxes will leave most people worse off.
The union said the 2.1 per cent increase in health spending was "a substantial cut in real terms", as health inflation is substantially higher than the CPI, and would certainly not match the cost of proposed service improvements in areas like disability and mental health.
It called on the Government to use social partnership structures to discuss the real cut in health spending, and the proposed measures to reduce public service staff numbers and abolish or merge state agencies.
Impact welcomed the decision to revised the timeframe for the decentralisation programme.
"The announcement on this ill-considered and poorly-planned political initiative is the only silver lining in an otherwise tough budget," said the union's deputy general secretary Shane Cody.
