Some years ago Leo Varadkar, then a humble opposition spokesman, commented that there is “no hope without growth”. Today after several austerity Budgets we would suggest that the phrase should be paraphrased to read “there can be no growth without hope”.
Until individuals have hope that things can improve there can be no growth as fear curtails spending.
Until businesses have hope of improvement in their markets there can be no growth of investment or employment.
And probably most importantly of all, until parents see hope for their children in Ireland there can be no growth in the confidence needed to rebuild.
In summary, we need hope to build growth.
Today’s Budget should be judged on its encouragement of hope.
In such a spirit we mention the positive items in the budget:
- No increase in Income Tax, Universal Social Charge or PRSI. For the first budget in many years take home pay will not be reduced next January.
- No increases in fuel costs for either home heating or transport, a positive move, as this expenditure now consumes a significant portion of the average household budget.
- The retention of the 9% VAT rate for tourism and hospitality.
- The increase to 5% in the farmer’s flat rate VAT.
- The introduction of a home renovation incentive for renovation and maintenance work on the family home.
- Capital Gains Tax exemption on property extended for 2014.
The above are positive signs of possibly the beginning of hope being restored to the nation.
In conclusion to quote “the boss” Bruce Springsteen.
“I’m waitin’, waitin’ on a sunny day
Gonna chase the clouds away
Waitin’ on a sunny day”
Hopefully Budget 2014 will be the start of chasing the economic clouds away and we won’t have to wait too long for the sunny day.
Ned Gladney is Tax Partner in GSW.
Download more comprehensive Budget 2014 summary pdf and watch video by clicking link: GSW Budget 2014 Highlights