Budget
2012 - Expectation Management
by Aidan
McLoughlin, ITC
The key
theme of this year’s budget has been “EXPECTATION MANAGEMENT”.
What was
normally a 3 hour event has been converted into a 3 day saga. Key features of
this exercise have been:
·
to
prepare the population for bad news (through an unprecedented level of kite
flying as well as assistance from the German Parliament), and
·
to ensure the previous government could clearly be shown to be responsible for
the current crisis and that this government will “retrieve our economic
sovereignty”.
Initial
impressions are that the government has achieved some success in regard to
damage limitation – “not as bad as we thought” seems to be the most common
response.
Our
economic sovereignty is more uncertain: the fact that we need to hear from the
Germans probably emphasises where we are on this point.
Whilst
the Budget is generally bleak and everyone will be a little worse off, there
are some small points of hope – the increase in mortgage interest relief for first
time buyers, the reduction on stamp duty on commercial property, the adjustment
of the Universal Social Charge.
Equally
there will be relief as regards changes that didn’t happen: tax relief for
pension contributions and loss relief for capital taxes are two areas where
audible sighs of relief were heard.
People
will be glad to be still surviving, but the end line is still a long way off.
Without offending the present government I would suggest the clear theme is perhaps “a lot done, more
to do”.
For our view on other aspects of the budget, please click here.
