In a budget when everything that was announced had been comprehensively leaked in advance, the more interesting story was in what did not merit a mention in either Ministers’ speech.
Even by the standards of recent budgets, this one was exceptional in that the Government kept nothing of note under wraps until the day. Perhaps they had been relying on the details of the Great National Thank You for frontline workers to be the centrepiece but, of course, the Government contrived to turn that open goal into something more akin to an own goal.
That wasn’t all that was missing. Indexing of tax bands and credits had been widely flagged as overdue and something that would be a win-win for Minister for Finance Paschal Donohoe. It wouldn’t cost any more than the increases already planned in income tax bands for this year and it would relieve the Minister of some of the annual budgetary lobbying pressure from colleagues, TDs and vested interests.
In the end, there was nothing.
The same was true for at least a fledgling first step in the well-flagged requirement for higher PRSI for everyone – employers, the self-employed and workers. No one looking at Ireland Social Insurance Fund – which pays out State pensions and other welfare payments – thinks it can meet the costs that are looming. Every year we delay makes the inevitable rises more dramatic and politically difficult down the line.
And while there was some good news for entrepreneurs – particularly a promised revamp of the unloved Employment Incentive and Investment Scheme – there was no engagement with the concerted lobbying from business for reform of the capital gains tax regime that many say is penalising those who take personal financial risks in starting a business.
Perhaps the Government is waiting for the Commission on Taxation and Welfare to complete its work and report back in time for next year’s budget before making fundamental changes to the tax code. But that will be one year closer to an election.
Failing to make any move this year as the economy rebounds spectacularly from Covid-19 is an opportunity missed.