Wednesday, December 06, 2006

2006 - another budget worth forgetting?

The big flaw with the 2006 Budget is in its lack of imagination. In fact I'd suggest its real ploblem is a failure to address mismanagement, failed schemes and disorganisation.
For example last year an effort was made to increase the number of chid minders (while at the same time luring them surreptitiously into the tax net) by introducing generous limits for child minders who mind at home. The take-up was extremely poor.
Why was this?Why, when such a substantial sum was on offer, did no department bother to examine why this wasn't taken up. Why did nobody talk to the very tiny few (166) who delcared themselves out of a total of 36700 undeclared minders to see what made them different from those who don't declare their income?
It would stand to reason that for example, a married homemaker would be an ideal target group for the child minders allowance, but clearly this group are either not declaring out of ignorance, or else they aren't providing the care, as previously assumed. Or perhaps they are charging more than 10,000 per year, or finally, may be afraid of the implicaions of registering.
I would guess also that a large number of childminders are operating in the black economy are either claiming means tested benefits or allowances only avaiable to them on condition that they do not work.
Either way, it suggests that there is either tax evasion or fraud at large in this sector.
The question is, after a year the scheme has failed, childcare is still a desperate issue for young families (and in particular for lone parent families who want to get off welfare) and yet not a mention of it in he budget.
These are the kinds of questions that Budgets need to be working to solve, not simply flinging more and more money at services that are poor value for money or failures.
Lastly, I would seriously question the basis of the assumption that unemployment will remain at 4.4%. The indications from recent years is that employment creation is slowing, a greater number are qualifying for benefits, and that low paid work is increasingly more likely to pay less than a low paid job. I would guess that the net level of unemployment will rise to between 5 and 5.5% by the end of 2007 due to the factors above, and due to high costs in the irish economy and the falling dollar.

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