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The Irish Independent reports
that motor tax on the average family car will climb to more than €500 for the
first time in tomorrow's Budget – an increase of €36.
And drivers of eco-friendly cars with the lowest
emissions will see their annual bill go up by at least €40, the Irish
Independent has learned.
Green motorists are being hit with far steeper
hikes, as the Government tries to close the gap created when the tax bands were
changed to reward low-emission cars.
But there will still be some incentive for people
to buy green cars, as cars with lower emissions will still pay substantially
less motor tax.
Also among the painful measures in tomorrow's
Budget are dole cuts for some people who have been without a job for just six
And there are expected to be reductions in the
back-to-school allowance, plus carer's and education payments.
The full raft of welfare cuts being proposed by
Social Protection Minister Joan Burton are revealed in a confidential cabinet
document seen by the Irish Independent.
The Labour Party deputy leader also wants to
clamp down on welfare fraud and has tabled a menu of savage cuts to rein in
spending in her department by €435m.
However, cuts to the budgets of the Department of
Health and the Department of Social Protection are being reduced by €150m each,
giving ministers James Reilly and Ms Burton more wriggle room.
The €300m reduction came about after efforts by
Finance Minister Michael Noonan and Public Expenditure Minister Brendan Howlin
to find money elsewhere.
As revealed in yesterday's Irish Independent, the
Government is expected to use the extra cash from millionaires' mansions to
reduce the property tax for owners of ordinary homes. The change is set to cut
the property tax bill for the average house by €30 from €300 to €270.
The new rates expected are a base rate of 0.18pc
– slightly down from 0.2pc – with a new higher rate of 0.25pc on houses valued
at more than a €1m.
Changes to the motor tax bands will also be
revealed tomorrow. The current system taxes cars registered after 2008 on their
emissions count, while vehicles before that are taxed on engine size.
Four out of five motorists are still paying under
the old system but the emissions-based system has led to a massive shortfall in
motor tax, which the Government is trying to make up.
Those with pre-2008 cars face an average 7pc
hike, while those on the new system will be paying at least 20pc more.
Sources have confirmed the exact increase for the
most common family car, a 1.6 litre engine, will be a jump from €478 to €514.
Those with two-litre engines will fork out an extra €50, with their annual cost
increasing from €660 to €710.
The Irish Independent first revealed the
Government had targeted motor tax for an additional €150m, or a 15pc increase,
last month. However, drivers of eco-friendly cars will be hit with the steepest
rates increase. Someone on the new system with the lowest A emission rating will
see their annual tax jump from €160 to €200.
This takes in a broad range of cars, with the BMW
520d diesel costing more than €45,000, and the Toyota Yaris (€15,000).
But it will be even more of a burden for cars on
higher emissions bands. Most motorists who own a car registered after 2008 fall
into the second and third emissions bands, B and C, and pay €225 and €330 in
There will also be a shake-up of the entire motor
tax system, which the Government hopes will help close the gap created over the
past four years.
Some 90pc of all new cars bought since 2008 have
fallen into the lower three tax bands, leading revenue falling to €988m last
year, a reduction of €72m since 2008.
Independent also reports that Michael Noonan, finance minister has opened
a third front in his long battle to secure a better deal from Europe on the cost
of the EU-IMF bailout, amid signs that more countries are now backing Ireland.
But efforts to renegotiate the bailout will be hard-fought, after France and
Germany quickly moved to shoot down the idea yesterday.
And Jean-Claude Juncker, chairman of the Eurogroup finance ministers, later
dampened hopes of any quick deal for Ireland similar to Greece's.
He said: "I don't think the Eurogroup is prepared to give equally similar
treatment to [Ireland and Portugal] when it comes to the detailed discussions
taken as far as Greece is concerned."
Mr Noonan is already in talks aimed at getting a deal from Europe to cut the
€64bn cost of rescuing the Irish banks with officials from the European Central
Bank (ECB) and the European Commission. Those talks are due to finish before
Now, Mr Noonan says Ireland could also seek concessions from Europe on the terms
of the current bailout deal itself.
That could include being given longer to repay some of the €67bn of rescue loans
and interest "holidays" to ease the annual cost of servicing the massive rescue
It came after Greece secured significantly better terms on its bailout loans
In Brussels, the finance minister said he was studying the Greek deal to see
what it might mean for us.
"We'll examine every element of it to see if there is anything in it applicable
Ireland's debt burden is sustainable, the minister insisted, but the scale of
the debt burden is also a drag on economic growth.
Mr Noonan said he was interested in anything in the Greek deal that could help
ease country's return to borrowing on the bond markets at the end of next year.
Sources at the Department of Finance said one idea now being considered was the
possibility of a temporary "interest holiday" on the bailout debt.
Not having to service the debt for a period of five to six years would lower
than annual cost of running the State.
It would also give investors in the bond market confidence that Ireland could
comfortably service new borrowings.
However, sources said the Government would weigh the potential gains from any
new concessions against the burden of storing up debt for longer.
It's not yet clear whether the latest concession for Greece comes with strings
attached, such as greater supervision of its budgets.
Germany and France were at pains to say yesterday that Ireland and Portugal are
different to Greece, but there has been support from other sources to a new deal
on Irish debt.
Portugal also wants a new deal while Finnish finance minister Jutta Urpilainen
said last week that she was ready to consider lengthening loan maturities for
Ireland and Portugal if requested.
"From the fairness point of view, it would be understandable to give some kind
of relief to them," she added. Finland has long been an opponent of further
Her Dutch counterpart also seemed to share the view although Dutch Prime
Minister Mark Rutte has since ruled out a new deal for Ireland and Portugal.
The Irish Times reports that
the new property tax to be announced in tomorrow’s budget will be reduced
slightly as a result of the late addition of the so-called mansion tax for
properties worth over €1 million.
Government sources yesterday confirmed that the
levying of a higher tax rate on high-value properties will have a knock-on
effect for middle and lower income households but conceded it would be marginal.
The rate to be unveiled by Minister for Finance Michael Noonan tomorrow is
expected to be 0.18 per cent of the value of the property, with a rate of 0.25
per cent for properties worth over €1 million.
The new rate would mean a tax bill of €450 per
annum for a house worth €250,000 as opposed to €500 if the rate were 0.2 per
The new tax will yield some €250 million for the
exchequer in 2013 after it is introduced in July, and €500 million in a full
Some Fine Gael Dublin backbench TDs said
homeowners in the capital would be more adversely affected by the tax. Mary
Mitchell O’Connor from Dun Laoghaire and Olivia Mitchell from Dublin South said
they had a huge number of representations from homeowners who had ordinary
properties, were in negative equity, but would still face steep property taxes.
Ms Mitchell O’Connor said the way the tax was
being designed was unfair and “outrageous” and she would continue to lobby Mr
While most of the €3.5 billion in adjustments
were signed off by Cabinet after a fraught meeting on Saturday, negotiations
involving the two biggest spending departments, Health and Social Protection,
were continuing last night, as Minister for Public Expenditure Brendan Howlin
attempted to finalise the adjustments .
Government sources confirmed the targeted cuts
for both departments had been reduced by €150 million each. The target for cuts
in Social Protection has been reduced from €540 to €390 million, while the
overall adjustment in Health will be €780 million, down from €920 million. Mr
Howlin and Mr Noonan have found savings elsewhere and the more modest targets
will allow both Ministers, Joan Burton and James Reilly, to row back from making
the most severe cuts.
Mr Noonan dismissed reports of acute strain
between the Coalition parties over tomorrow’s budget, saying most of the plan
had been agreed for weeks.
“I don’t know who is writing those headlines but
it’s just not true. Relationships are very good,” Mr Noonan told reporters in
“The debate on Saturday was about the last €100
million or so out of an adjustment of €3.5 billion and there are different takes
on it, different opinions and different political assessments on what should be
in a tax package or what should be in an expenditure control package.
“But it’s around the margins, the main thrust of
the budget has been agreed for some weeks.”
Backbench TDs from both Coalition parties voiced
discontent about various aspects of the budget. A number of Labour TDs expressed
disappointment that there would be no increase in the universal social charge
for those earning over €100,000.
The Irish Times also reports
that US securities firm Cantor Fitzgerald has completed the long-mooted takeover
of Irish stockbroker Dolmen. It plans to create at least 200 jobs and intends
applying to be a primary dealer in Irish government debt.
The amount paid for the Irish broker has not been
disclosed. The main beneficiaries are the firm’s chief executive, Ronan Reid,
and director Gerardine Jones, who combined own close to 50 per cent of the firm.
The others to benefit from the deal are director Paul McGowan; Garrett Kelleher,
a shareholder and property developer whose bank debts are in the National Asset
Management Agency; and 10 staff.
Cantor’s takeover of Dolmen, which has been the
subject of discussions for about a year, is the first Irish acquisition by the
firm, which plans to apply to be a primary dealer in government bonds in
“We are looking to be the number one fixed-income
dealer in Ireland in a relatively short period of time,” Shawn Matthews, chief
executive of Cantor Fitzgerald Co, the company’s brokerage and investment bank
arm, told Bloomberg. “We are still aggressively looking to expand. I can see us
adding at least 200 people over the next year.”
Mr Reid told The Irish Times Cantor was attracted
to Dolmen’s trading business in the secondary bond markets and to its
stockbroking and private client business.
The 17-year-old firm was close to break-even in
2011, he said, and would return to profitability this year on estimated revenue
of about €14 million.
Dolmen still lags rival stockbroking firms Davy
and Goodbody in bond trading and general stockbroking business.
Mr Reid said Cantor’s interest is to grow the
business to compete with Davy, which is owned by management and staff, and
Goodbody, which is owned by Kerry-based financial services company Fexco.
Cantor Fitzgerald is the firm that suffered most
casualties in the the 9/11 attacks on the World Trade Centre in New York. The
firm lost 658 of the 960 staff in its Manhattan offices that day.
The acquisition is the latest development in a
stockbroking market that has undergone major consolidation in recent years
following a heavy fall in share trading during the crash. South African bank
Investec bought NCB Stockbrokers in June. Rival broker Bloxham was put into
liquidation in May over accounting irregularities.
The Irish Examiner reports
that emerging markets such as China, South Africa, Nigeria and Russia are
playing a growing role in Irish food and drink exports growth, according to Bord
During 2011, trade to China increased by 47%,
South Africa by 43%, Nigeria by 38% and Russia by 30%. Bord Bia’s emerging
markets manager, Breiffini Kennedy, says this growth is being driven by enhanced
consumer purchasing power and greater urbanisation in these markets.
Mr Kennedy said: "These trends stimulate investment from retailers as they seek
to secure market share and first mover advantage in emerging markets. Key areas
of investment for retailers include new store openings and storage and logistic
"African markets in particular are attracting increased attention from leading
international and regional retailers. KFC’s success in China and focus on Africa
is an interesting example. For instance, Yum! Brands business development plans
in Africa set out the objective of securing ‘major growth’ in the continent from
their base of over 650 stores in South Africa."
The Bord Bia analyst stated that, during 2011, Yum! launched in new markets such
as Zambia, Ghana and Kenya with plans to roll out to seven new markets this
year. Yum! aims to have a presence in 20 African markets by the end of 2012.
"Yum! Brands view emerging markets as key to their future growth, but they are
not alone," Breiffini Kennedy stated.
"Regional players such as Shoprite are also looking to expand from South Africa
into other African markets. Shoprite recently opened their sixth outlet in
Nigeria, and Africa’s largest retailer has a footprint in 17 African markets,
with Zambia and Namibia the largest markets outside of South Africa."
Mr Kennedy added: "Multinational food companies and retailers are moving swiftly
to ensure they secure the new opportunities which emerging markets offer. This
momentum will ensure emerging markets continue to play an important role in the
growth of Irish food and drink exports."
Meanwhile, a recent report by Rabobank suggests that it is not too late for US
and European processed food brands to enter the Chinese market. Rabobank&
suggests that effective distribution strategies are critical to Western food
processing companies successfully winning customers in the Chinese market.
The bank’s report found that the annual growth in some areas of the country at
10%, with an overall growth of 150% in the last decade.
Among the indicators of growth potential, Rabo cites Chinese consumption of
confectionery of less than 1.2kg per person annually. The current global average
stands at 2.1kg per person, suggesting considerable additional room for growth.
Nick McIlroy in Bord Bia’s Shanghai office stated: "Confectionery is typically
consumed during the festive gifting seasons around Chinese New Year. Rabobank
suggests that the key for foreign brands entering this market can be "distilled
down to tactics applied for specific sizes of cities within the country".
"With a number of Western confectioners having established a presence in Tier 1
cities such as Shanghai and Beijing where distribution networks are more
formalised, the report suggests that specific distribution strategies for
smaller cities may prove fruitful for Western processed food brands which are
perceived as higher quality products, attracting a premium from consumers."
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