The Marxist move in Budget 2025!

“Those are my principals. And if you don’t like them…..well, I have others!” – Groucho Marx.

Our Government is growing increasingly Marxist – although it’s the tenets of Groucho rather than Karl they seem to follow!

It’s incredible how easily  they now abandon pledges.

I don’t mean promises made on the campaign trail but those in the supposedly well-worked out Programme for Government!

This clearly states: "From Budget 2022 onwards, in the event that incomes are again rising as the economy recovers (which they are), (tax) credits and bands will be index-linked to earnings…to prevent an increase in the real burden of income tax."

Paschal Donohoe later reiterated this: “The Programme for Government,is very, very clear. If an increase in real pay does happen, we want that pay to feed through, and take home pay improving at the same rate.”

Leo Varadkar called for the standard rate band to go up to €50k many years ago – without doing anything about it.

And Taoiseach Simon Harris said exactly the same thing at the Fine Gael ard fheis in April, seemingly oblivious to the lack of follow-through for nearly a decade.

Those comments are exposed as pure ‘blather’ by looking at what they actually did in the current term of Government:

 As you can see it rose nowhere near as fast as average wages (as promised).

In fact, the gap between the standard rate band (€42k) and average wages (now above €50k) has nearly doubled to over €8k this year.

You can also see that even after upping the band by €2000 for next year – in one of the Budget’s headline tax moves – it will still lag behind average wages by €7.8k!

All this means, is that we pay more tax not less as we move into the higher tax bracket with higher wages.

Yet upping this band as one of the few things that this Government actually did do on taxation!

They left most of the system unchanged, or barely budged, which pushes up the amount of tax we pay, as Paschal pointed out.

The supposed tax 'giveaways' announced in most budgets are not real because they increase only SOME elements of the tax system and even then barely in line with inflation never mind wage increases.

This was revealed by the Government agencies: the ESRI, Revenue Commissioners and the Irish Fiscal Advisory Council (IFAC), who all indicated the Budget was broadly neutral on tax in reality – i.e. the trumpeted €1.4bn tax ‘giveaway’ was a myth.

At the post Budget press conference, I put this to both ministers present: Jack Chambers (Finance) and Paschal Donohoe (Public Expenditure).

They didn't deny it.

Minister Chambers said he wanted to present a “mix of measures… to respond to wage growth”.

"I think your question is rooted in why I didn't do more from an income tax perspective (such as linking tax bands to wage growth)? We didn't because we've other competing priorities," he said.

So, just like that, commitments in the Programme for Government are cast aside.

I then asked Paschal Donohoe about honouring his own personal pledge to index-link tax bands to wage increases - as doing so would be "fair and honest".

I even jokingly suggested that he was like Saint Augustin, who asked God for the strength to give up his vices - only "not yet" Lord, not yet."

Paschal wasn't amused. The often smiley minister was stony-faced as he said doing so would mean "we'd be accused of another sin - putting too much money into our economy" at a risk of fuelling inflation.

Yet he’s happy to have his budget billed as a €10bn splurge – ‘the biggest giveaway yet’ – that will in fact add €1000 to our bills by pushing up inflation (according to IFAC)?

And so another commitment that supposedly reflects Fine Gael core values - like abolishing USC and State quangos – is abandoned without even a hint of a blush over the deception.

Shameless.