Budget 2016 a ‘blanket bombing of a vulnerable electorate’ (video)

14 Oct 2015

Speaking at the IIA post-Budget 2016 briefing was (l-r) Mairead Harbron, tax manager at PwC, Joan Mulvihill, CEO of the IIA, John Murphy, tax partner at PwC, Dr Constantin Gurdgiev, economist and Ann O'Dea, co-founder and CEO, Silicon Republic. Photo: Connor McKenna

Tax, technology and economic experts recently sat down at an Irish Internet Association (IIA) event to discuss Ireland’s latest budget, with economist Dr Constantin Gurdgiev calling it a “blanket bombing of a vulnerable electorate”.

The general consensus was that Minister Michael Noonan’s latest budget was plenty of window dressing and not much else, with the money creeping back into consumers’ pockets not sufficient to continue growth in the overall economy.

During the panel, which was chaired by Ann O’Dea, CEO and co-founder of Silicon Republic, Gurdgiev criticised the Government’s decision to spend someone else’s money in an impulsive way, comparing it to “taking the company credit card and spending it all on booze”.

“This is ‘basic consumption’, which isn’t necessarily a bad thing at first,” he said, noting how areas like this are still lagging behind other economic factors in Ireland, so this will help.

“But that is not an expenditure you generally finance in the long term when borrowing money. If you borrow money you must invest in the return. There is not going to be any return from this Budget. This is blanket bombing of a vulnerable electorate with imaginary kindness.”

Among the changes that came in as part of yesterday’s Budget, the double Irish loophole closure envisioned by the Irish Government came in the form of the now OECD-approved Knowledge Development Box (KDB).

Entrepreneurs let down

But entrepreneurs were the ones being let down, in particular, according to Joan Mulvihill, CEO of the IIA, who likened the budget to a Christmas where “everybody knows what they are getting in advance, and everyone is getting socks”.

“It’s generally positive,” she said. “The only people left disappointed were the innovating entrepreneurs. With the exception of some reference to Knowledge Box.”

While John Murphy, a tax partner at PwC, had hoped for a bit more of a gamble. “We see more money in people’s pockets, which is good and will stimulate a certain amount of activity, but in the longer term it is a little bit more questionable,” he said.

Lower earners are not receiving an impediment to upskill, claimed Gurdgiev, with a “lack of vision” and a “concentrated focus on vote buying” concerning him most.

Other criticisms included a lack of incentive to work in start-ups, no infrastructure for start-ups in the first place and little general entrepreneurial encouragement, with smaller companies’ inability to afford significant consultancy fees a particular point of concern.

Gordon Hunt was a journalist with Silicon Republic