Some good news in the budget

[patslatt]

Tax increases in the budget plus potential tax increases in budgets to come will add to the damaging downward spiral in consumer spending. This is the economic equivalent of kicking a man when he is down. Still,there were some good news items.

One piece of good news in the budget is that high levels of planned capital spending in the National Development Programme are to be maintained,more or less.By contrast,historically in recessions Irish government capital spending was slashed in order to maintain current spending.From a Keynesian economics perspective,capital spending is a major stimulus to an economy in recession. It should help alleviate the huge drop in housing construction employment.

It should also help overcome the infrastructural deficit. In an economic recovery,if our infrastructure is brought up to a level comparable to that of advanced EU economies,an increase in economic productivity of maybe 25% could be facilitated over time.

Another piece of good news is the government's decision to deal decisively with the banks' bad loans,provided the loans are purchased at realistic prices. This should remove the spectre of a Japanese style lost decade in which zombie banks nursing hopeless property development loans refuse to lend to viable businesses.

Given the huge capital requirements for capital spending and buying bank loans,there will be no money left over to increase current spending for maybe the next five years. That has negative implications for social partnership,which is just as well.

[nonpartyboy]

Of course we should maintain capital spending so the CIF can cream huge sums off the top, sure isin't this what ireland inc. is for

[20000miles]

I agree. If anything, the only solution to the crisis is to build more houses.

[atlantic]

and makey up jobs.

I agree. If anything, the only solution to the crisis is to build more houses.

[patslatt]

and makey up jobs.

Bridges,tunnels,railways,intercity roads,ports,broadband etc: infrastructure for a modern economy.

[Seos]

Even if we ignore any possible Keynesian stimulus, or short-term employment benefit this is great news.

It means for once we are getting a great deal.
We're building infrastructure which we would have had to build anyway at a time when building is at it's cheapest!
Delaying this capital spending would only cost us more money in the long-run!

I'm actually amazed that FF have done something so far-sighted.

[QuizMaster]

They are taking away the early childcare supplement, but replacing it with pre-school vouchers. These will be denominated in hours, not euro. This means we can send our youngest to a good Montessori instead of the local community playgroup. Or does it? Yet to be clarified. Probably it will never happen by the time January comes around, as we will have declared bankruptcy.

[Watcher1]

They are taking away the early childcare supplement, but replacing it with pre-school vouchers. These will be denominated in hours, not euro. This means we can send our youngest to a good Montessori instead of the local community playgroup. Or does it? Yet to be clarified. Probably it will never happen by the time January comes around, as we will have declared bankruptcy.

When I heard this announcement I thought it was a great idea and worth much more to the recipient than €1000 they would otherwise receive as a cash supplement. The more I think about it thought the more I realise that it will not happen. We dont have the infrastructure to deal with it. It is widely accepted that we dont have enough childcare places in this country but in January 2010, the government will put in place a scheme where by all children at a certain age in current pre-school creches, montessori, PLUS all those children being minded by next door neighbours, grandparents and stay at home mothers will miraculously be accomodated in formal preschool structures....... I think not. Watch the roll back

[wexfordman]

When I heard this announcement I thought it was a great idea and worth much more to the recipient than €1000 they would otherwise receive as a cash supplement. The more I think about it thought the more I realise that it will not happen. We dont have the infrastructure to deal with it. It is widely accepted that we dont have enough childcare places in this country but in January 2010, the government will put in place a scheme where by all children at a certain age in current pre-school creches, montessori, PLUS all those children being minded by next door neighbours, grandparents and stay at home mothers will miraculously be accomodated in formal preschool structures....... I think not. Watch the roll back

The number of dual income families will ahve fallen by then, and has done already, so perhaps demand at pre school/montessori has/will fall ?

[goosebump]

They are taking away the early childcare supplement, but replacing it with pre-school vouchers. These will be denominated in hours, not euro. This means we can send our youngest to a good Montessori instead of the local community playgroup. Or does it? Yet to be clarified. Probably it will never happen by the time January comes around, as we will have declared bankruptcy.

I wondering about this too.

We have a 3 year old who whill be 3 and 8 months in January 2010, so he qualifies for the scheme.

Currently we can only afford to send him to child care for 3 days a week.

Does the new scheme mean that we will now be able to send him for 5 days?

This is one part of the Budget we will actually gain from.

In these difficult times, it makes sense to direct the money through the childcare facilities, rather than sprinkling it around like confetti.