Dear Michael: Conor Pope’s open letter to the Minister for Finance

This plea to Michael Noonan looks at hits and misses as Budget 2017 approaches

Dear Michael,

Can you believe this is your sixth budget? And can you believe how little control you have over its contents compared with years gone by? Remember the good old days when you – and Brendan – were masters of your own destinies and could take credit for pulling us back from edge of the financial abyss and putting (a tiny bit of) money back in our pockets.

But then you, Enda and Joan annoyed the electorate with all that talk of “fiscal spaces” and keeping the recovery going (and, um, water charges) and it responded by giving you a good kicking. It took away almost all of your mandate so your latest budget will be, effectively designed by committee.

Fianna Fáil backbenchers, a motley assortment of independents and Shane Ross will be able to claim they are the architects of all the good things in your speech while distancing themselves from anything that even flirts with unpopularity.


Annoying, right?

Mind you, there probably won’t be too many good things to shout about unless you have some class of magical money rabbit to pull from your hat tomorrow afternoon. And if you had such a rabbit, news of it would have been well leaked by now. Gone are the days when a budget contained anything by way of surprises.

Tax cuts

So, what have you got for us this time? You have €300 million to spend on tax cuts. Now that sounds like a lot but you know it isn’t really. It is nowhere near enough to get rid of the universal social charge (USC) as your party seemed so keen on. It might be enough to tweak it a bit though and, if the leaks are right, the “squeezed middle” can look forward to having as much as €100 more to spend over the next 12 months.

Oh €100! Amazing. Well, not really. It will cover two days’ childcare for one child or a tank and a half of petrol over the course of the next 12 months which will allow motorists to drive an additional 2km a day between now and your next budget. Mind you the €100 will be swallowed up by car insurance premium hikes or an increase in the excise duty on diesel, which you are considering, so it is more likely to be a case of nothing changing for most of that cohort.

Apart from the squeezed middle you also have your eye on pensioners and the State pension is likely to go up by €5 a week. Don’t be surprised if Fianna Fáil take credit for that even if it is hardly something to get the bunting out of the attic for.

An extra fiver a week on the pension is – obviously – more than the €2 the squeezed middle will be getting but it is not really going to go that far. It will cover about 15 per cent of the cost of heating and lighting the average home for a year and allow a pensioner to buy an extra loaf of bread and two litres of milk each week. Mind you, the savings on home heating and lighting could well be eroded if the allure of low-price oil is a temptation you just can’t resist and you up the duty on it.

Children’s allowance

We haven’t heard a whole lot from your department about the children’s allowance. That might be because you reckon last year’s largesse, which saw you increase the children’s allowance by €5 a month, was good enough for parents. Or maybe you are concentrating on childcare this year.Well you might. Working parents of two pre-school children have to spend about €2,000 on childcare with precious little help from the State apart from the “free” pre-school year.

We have heard talk of a radical new system of subsidised childcare that would see the State pay a portion of a family’s bills directly to childcare providers. It is likely to be means-tested and will be rolled out over a number of years, starting next September so there will be no big win for most of us – at least in the short term.

Everyone knows you are planning an incentive for first-time buyers but are you sure it is a good idea to restrict it to new builds? This was done before, remember? The grant just ended up being swallowed up by developers. Is that the road we want to go down again? The builders would love it but, we know now they don’t always have our best interests at heart.

Tax increases

There are some tax increases we would like to see. As an ex-smoker, Pricewatch would love to see prices sky-rocket. Last year you increased the price of a packet of 20 cigarettes by 50 cent. Would you consider a bigger increase this year? All international evidence for many years indicates that there is a clear correlation between price increases and declining smoking levels.

Some people will say that if prices go up too much then smokers will be driven into the arms of those selling cigarettes on the black market. This is an old, old argument and one pushed by the tobacco lobby. Can we believe anything the smoking lobby says about anything? We know that Garda resources are thin on the ground but if you could afford to keep just a few on Dublin’s Moore St and beef up customs a whole lot could be done to combat the illicit trade.

And it is clear that the time to introduce a tax on sugary drinks has arrived. Most of these drinks have virtually no nutritional value and are not helping us to tackle our growing obesity crisis. You have been dragging your heels on this, but the public is on your side.

Sugar tax

It will be even more on your side if you make sure all the cash raised is ringfenced and put into a "Children's Future Health Fund" as suggested by the Irish Heart Foundation. Can we suggest you levy a sugar tax of 20 per cent? It has the best chance of reducing consumption and it could have an impact on obesity levels before the end of your tenure as Minister for Finance. It could raise €100 million a year. Now, the Irish Beverage Council will say that is a terrible idea and they will insist that the tax doesn't work. But then they would say wouldn't they.

And speaking of naked self-interest, the National Off-Licence Association (Noffla) wants the level of excise on alcohol to be reversed to its 2012 level. And it has claimed it would create 1,786 new jobs in the industry.

We would completely understand if you did not do this, but you might hold off on increasing the excise duty too. Already the duty on alcohol in the Republic is among the highest in the EU. You might cut us some slack on that score. At least for this year!


We asked Twitter users what they would like to hear in tomorrow’s Budget speech. This is what they said.

Denise Farrell: “More money for pensioners.”

Sinead Ahern: “Increase inheritance tax.” (Ducks and runs away.)

Olga Keogh: “Tax relief for childcare.”

Laura Mulcahy: “Give us back our USC.”

Marc Synnott: “Can he return the one-parent family tax credit to those of us who pay maintenance hence unburdening the State!”

Siobhán Patten: “I’d like him to do a dab.”

Paul Cawley: “ Anything that stimulates housing supply – NOT a first -time buyer’s grant.”

Karen Mulreid: “Cut the USC. It’s crippling people. Also a real, proper commitment to help homeless people. Would sacrifice my USC cut for that!”