BERLIN LEAK:THE GOVERNMENT document made public by a German parliamentary committee contained new information on taxes, job activation and bolstering up the credit union sectors.
In addition to specific references to VAT increases and a household charge in next month’s budget, the paper also includes previously undisclosed references to new taxes which will be introduced in December 2012.
The first refers to restructuring motor taxation, which suggests that there has been a fall-off in revenue from this tax since its structure was changed to favour cars with low emissions. Most vehicles sold in Ireland in recent years have low-emitting diesel engines, which fall into bands one and two, both of which carry modest charges.
The other new reference in budget 2013 is to excise duties, which suggests that duties on cigarettes and alcohol – the so-called “old reliables” – may not form a major part of this year’s budget.
There is also an acknowledgment that income tax, untouched this year, will form part of the budgetary arithmetic next year. There is a reference to an increase in the bands.
Such measures would raise some €1.25 billion, according to the draft, which also alluded to some €2.35 billion in cuts being required for 2013.
Details on where the cuts will be applied are less specific, although the Department of Social Protection will again be targeted for reductions in its budget.
The 32-page document is the latest iteration of the memorandum of understanding with the European Union and the International Monetary Fund, updated after the troika completed its review last month of Ireland’s performance for the third quarter of the year.
The draft sets out all the conditions, quarter by quarter, which must be met by Ireland to qualify for money from the fund. It is an update of the document published in July after the review of the second quarter.
Other new elements include specific references to credit unions.
The Government plans to inject €250 million to recapitalise credit unions and recoup the money from a levy on the sector, the leaked draft budget documents show. Mr Noonan said last month that the State would provide between €500 million and €1 billion to strengthen the 407-strong credit union sector.
The leaked documents say that the Government will make a commitment to “initial resolution funding of €250 million”. Further funding will be made available in 2012, if needed, once the credit union amendment legislation is in place “up to an amount to be agreed to with our external partners”. Legislation to strengthen standards in credit unions will be published by the end of June 2012.
A move to lift the cap on the size of retail outlets and allow large hypermarkets to set up in Ireland will be brought forward to be put in place by the end of the first quarter of next year, according to the document. It also contains detailed proposals for improving “activation of the unemployed”.
