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News : Irish Last Updated: Feb 15, 2013 - 9:18 AM


Friday Newspaper Review - - Irish Business News - - February 15, 2013
By Finfacts Team
Feb 15, 2013 - 9:14 AM

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The Irish Independent reports that  Social Protection Minister Joan Burton is demanding a far softer Budget so the taxpayer "immediately" sees the full benefit of the bank debt deal.

Labour Party ministers are pushing for a reduction in the tax and cuts package in the next Budget by up to €1bn.

Fine Gael ministers have spoken about the benefits being spread over two Budgets.

But Labour wants the entire rewards from the promissory note deal to be front-loaded into Budget 2014 -- before the local and European elections.

Finance Minister Michael Noonan has warned the knock-on effects from the promissory note deal will have to be worked out later and negotiated with the IMF-EU bailout team.

Firing the first shots in what is expected to be a year-long battle, Ms Burton said there was "no time to waste" in showing the public the entire benefits of the deal.

Tanaiste Eamon Gilmore has also talked about "lifting the burden" and Public Spending Minister Brendan Howlin referred to a "social dividend" after the deal.

Labour is currently languishing in the opinion polls, but the party hopes for a boost if the public can see the direct impact of last week's bank debt deal on the cash in their pockets.

The Government says the bank debt deal will mean there is an extra €1bn to play with over the coming two years.

It is due to introduce a Budget package of €3.1bn in cuts and taxes in 2014 and a further €2bn in 2015.

Within Labour, there is a concern that Fine Gael and the Department of Finance will try to push out the €1bn benefit from the bank deal.

They fear it will be swallowed up in debt repayment, be used to reduce the deficit faster or to compensate for lower levels of economic activity.

"There's a fear that Finance will hold back and Labour will have nothing to show in this Budget but more pain.

"It will be disastrous," a source said.

Last night, Ms Burton said the debt deal will produce "immediate bottom-line savings", and added: "We need to invest those proceeds immediately to get our people and our economy working again, beginning with this year's Budget because there is no time to lose."

Labour Party sources say the "adjustment burden" should be reduced in Budget 2014.

"The minister believes it is essential in Budget 2014 that the adjustment target is reduced in line with the savings secured from the promissory note deal," a senior source said.

Dividend

"That could mean reducing the adjustment by somewhere between €800m and €1bn, with a proportionate reduction in the amount of expenditure measures that have to be implemented."

Sources indicated that the party does not expect to get the full €1bn factored into the 2014 Budget, but the party would be pushing for it.

"I don't think we'll get to the 100pc," the source said.

Mr Howlin said yesterday that the public must see a "social dividend" from the bank debt deal, which he described as "one step in the path of recovery".

"The people have taken an enormous burden and it is to them the vast bulk of the credit for the steady progress on the road to recovery we have achieved is due," he said.

The Irish Independent also reports that a group representing 11,000 retired public servants has described a minister's comments that cuts to big state pensions are inevitable as "populist".

The Retired Civil and Public Servants Association hit back at Public Expenditure and Reform junior minister Brian Hayes's revelation that the Government has tabled the cuts as part of a bid to make payroll savings of €1bn.

The group said the plan is unlikely to raise much money and insisted all serving and retired public servants had already contributed enough.

The group also dismissed remarks by employer body IBEC that state workers' pensions should be cut across the board as a case of it not wanting to "waste a good crisis".

IBEC director of industrial relations Brendan McGinty claimed public sector pensions were the "elephant in the room" when private sector pensions were being "decimated".

When asked if the group opposed cuts to the pensions of former high-earning public servants who get in the region of €150,000-a-year, spokesman Sean O Riordain said it was opposed to all pension cuts.

"We are against any further cuts for serving staff or pensioners," said the state retirees' spokesman, who is a former general secretary of the Association of Higher Civil and Public Servants.

He accused the Government of failing to treat retirees with respect by not engaging with them in talks.

Difficulty

Mr O Riordain said the people he represents did not have a difficulty paying more money to keep the State afloat, but only if those on the same incomes in the private sector were asked to contribute too. "This is an element of taxation without representation," he said. "Usually, if you're going to take some tax off somebody, there's an opportunity to have discussions about that."

Mr O Riordain, who previously worked at the Taoiseach's office, said the average civil service pension is €19,000-a-year. However, many retirees with more than one pension with a combined value of €100,000 or above have avoided a 20pc tax introduced by the Government. This is because only single pensions valued above €100,000 are taxed at this rate.

Mr Hayes said cuts to the highest pensions were on the table and the only way an agreement could be forged with unions was if it was seen to be fair, and those who had the most gave the most.

The Irish Times reports that Irish food group Greencore became the latest company to become embroiled in the horse meat scandal when it confirmed it manufactured bolognese sauce that British retailer Asda has withdrawn from the shelves after it was found to contain horse meat. Asda withdrew three other Greencore products “as a precautionary measure” but they did not test positive for equine DNA.

In a statement, Greencore said the beef was supplied to it by the ABP Food Group’s Nenagh plant in Co Tipperary. The Larry Goodman-controlled ABP also owns Silvercrest Foods, whose factory in Co Monaghan was one of the first whose products tested positive for horse DNA last month.

Greencore’s chief executive is Patrick Coveney, brother of Minister for Agriculture Simon Coveney.

An ABP spokesman said the company “reiterates that we have never knowingly purchased or processed equine meat.”

Meanwhile, French investigations into the horse meat scandal stepped up a gear last night as the government accused meat processing company Spanghero of knowingly selling horse meat labelled as beef.

The company in southern France had its licence suspended yesterday. The French government said it believed the practice went on for six months and involved about 750 tonnes of meat. Spanghero rejected these accusations and said it placed an order for beef and believed it had received beef .

Burgers withdrawn
 

Meanwhile, Rangeland Foods in Co Monaghan is continuing to withdraw 9,200 burgers after tests found some samples contained between 5 and 30 per cent horse meat.

The company said it was likely some of the burgers had already been eaten.

Germany has become the latest country to find horse meat in its frozen food. Two major retailers removed own-brand lasagnes from their stores while two other retailers stopped sales of frozen lasagnes and cannelloni after their manufacturers could not rule out that they also contained horse meat.

The UK Food Standards Agency said three people had been arrested at meat plants in Yorkshire and Wales last night on suspicion of fraud.

Authorities in Britain and France are trying to trace the carcasses of six horses contaminated with the painkiller “bute” that were slaughtered in a UK abattoir and may have entered the human food chain in France.

The veterinary drug bute is potentially harmful to human health, and was detected in eight horses out of 206 tested by the UK Food Standards Agency earlier this month. Two horses were destroyed before leaving the slaughterhouse, but six were sent to France.

Minister for Agriculture Simon Coveney said “huge progress” had been made in the joint Department of Agriculture/ Garda investigation into how horse meat got into burgers produced in this State.

“We’re assembling a lot of data, a lot of evidence and we are undertaking interviews on the back of all that data to get a really informed view on what happened here,” he said. “But there’s a lot of work to do yet.”

The Irish Times also reports that Dundalk has solidified its reputation as a centre of e-commerce with yesterday’s announcement by eBay that it will be creating 450 jobs there – last year PayPal announced 1,000 jobs for the Co Louth town.

“I have plans made to emigrate to England in June, but I will be applying now for one of these jobs,” said Robert Quinn (30), from Ardee, a short drive from Dundalk.

Robert is father of a one-year-old boy and speaks French and Spanish. He is currently studying an international business course that involved learning Chinese.

“I worked in Navan carpets for three years and it closed and then I worked as a fork-lift driver.

“I went back to full-time education and studied cultural studies with Spanish because I thought I had more potential than just driving a forklift,” he said.

He welcomed the eBay announcement, although he said he has already applied for a job with PayPal, a cousin of eBay, without success. His plans for England remain in place for the time being at least.

On the course with him in Dundalk Institute of Technology is Tomas Wilkinson (30), who is approaching the first anniversary of being made redundant by Telefónica O2 Ireland.

He used to leave home at 5am to travel from Clogherhead to Dublin in time for work. If he does not get a job he will also be emigrating and he was greatly buoyed by yesterday’s news.

“It is brilliant news. I have been applying for jobs throughout my course, which appealed to me because it is based around the emerging markets in the world. I also thought an understanding of the Chinese language and culture would be an advantage in securing employment.”

The Irish Examiner reports that the Financial Transaction tax to which 11 EU countries are committed could result in double taxation in Ireland where a stamp duty is imposed on some transactions, the European Commission has said.

Ireland, despite the prospect of getting more than €500m a year from a FTT, has taken the advice of the industry and opted out of the tax, saying it could frighten off some of the financial services industry they say employs some 30,000 people.

Tax Commissioner Algirdis Semeta unveiled the details of the proposed tax which will now be discussed by the 27 member states, but just needs the unanimous agreement of those adopting it when it is finally agreed. In total it should raise up to €35bn a year, ranging from €9bn for Germany and €7bn for France to €85m for Estonia.

He said member states could opt in at any stage, and could adapt their own taxation to ensure there was no double tax on transactions. Currently Ireland levies a 1% charge on share purchases in an Irish registered company, but not on the sale and there is no tax on derivatives.

The new tax of 0.1% on shares and bonds and 0.01% on derivatives, to be adopted under the enhanced cooperation procedure in the EU where a group of at least nine countries can proceed with a unified policy, has come under heavy criticism from the industry.

A number of US business organisations, including financial services, are particularly exercised because the tax will apply to all trades that have any link with the 11 countries adopting it.

The tax will be due on both purchase and sale if any party to the transaction is established in a participating member state and/or has issued the financial instrument, regardless of where the transaction takes place. The tax will go to the participating 11, including the share collected from a party to a trade in a non-participating country eg, Ireland.

It will not apply to the banking and insurance activities of citizens and businesses or to traditional investment banking activities such as raising capital. Refinancing activities, monetary policy and public debt management will also be excluded, including transactions with central banks, the ECB, the EU rescue funds, the EFSF and the ESM, and transactions with the EU.

Foreign news reviews and more comprehensive coverage of Irish news is available in our Daily News Digest in the Global category on Finfacts Premium.

Check out our subscription service, Finfacts Premium , at a low annual charge of €25 - - if you are a regular user of Finfacts, 50 euro cent a week is hardly a huge ask to support the service.


© Copyright 2011 by Finfacts.com

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