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Wednesday, 09 October 2013 12:29

Budget 2014, Will it fix the Economy?

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Michael Noonan Michael Noonan

What’s the difference between €3.1 billion and €2.5 billion when it comes to hardship on the normal person.  €600 million less than our Minister for Finance, Michael Noonan, has to take out of the economy in the next budget.

Let me take that €10 Bn to a different perspective.  That is an overspend of €27.4 million for every day of the year OR, €317 for every second of every day of the year.

Minister Noonan said that "resurgence" in the economy and "significant savings" will make up the rest. He said: "Things are going well. It is still of course going to be a tough Budget, but maybe not as tough as we thought it would be a couple of months earlier."

But lets look at the realisation of things as they are.  The government’s outgoings will exceed income by at least €10 billion. Ireland’s national debt last March was €204 billion, so by the end of 2013 it will be around €212 billion.

If you were running your household budget or small business budget by spending more than you get in, you wouldn’t survive for long.  Check out our article here.

Let me take that €10 Bn to a different perspective.  That is an overspend of €27.4 million for every day of the year OR, €317 for every second of every day of the year.  How can we live with that.

Now don’t pick me up wrong here, I’m not a believer in hairshirt budgets that attack the common man (or woman).  You can’t continue to take money from the general public as if they had bottomless pockets. Compare it to a business that raises its prices.  The laws of price elasticity says that it will lose business.  That happened my local pub. Business dropped so they increased prices. They then lost even more business.

Money is not in the economy because people don’t have it to spend. And if they do have it, they are afraid to spend it for varying reasons.  Paul Mooney wrote and article here on more or less diversity.

In your house or business, if you were spending more than you had coming in, you would have to reduce your outgoings or increase your income or a bit of both.  The problem is that after a few years, Irelands outgoings are still too high.

€10 billion per annum deficit.  Minister Noonan plans to bring in €2.5 billion in next weeks budget.  That still leaves €7.5 billion.  How is that going to be addressed without crucifying the normal person?  As Minister Noonan says "resurgence in the economy and significant savings will make up the rest".  Let's see.


Read 51201 times Last modified on Wednesday, 09 October 2013 22:14
Robert Tallent

Bob is a Management Consultant, Mentor and Trainer. He is also an Entrepreneur from 1983 to the present day. Between 1983 and 1995 he ran four businesses with a turnover in excess of £1m. As well as having an Honours Degree in Business Studies, he is also an Industrial Engineer and managed a large department in a multinational with large budgets and responsibilities.

He studied to become a Management Consultant, Mentor and Trainer and setup The Synergy Group in 1995.

He has a huge range of business and management experience in practically every industry.

Call him privately on +353(0)87 232 6927

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