Tuesday 11th October 2016
The self-employed among the winners in Irish Budget as smokers suffer another 50c & cuts to USC rates the main tax measures
Most unusal in that cigarettes @ 50c rise is only clawback
The Minister for Finance, Michael Noonan, increased the earned income tax credit by €400 to €950 and while the rise was less than expected it was still enough to leave the self-employed as among the bigger net gainers from the Budget tax measures.
Self-employed taxpayers are among the main winners from Budget 2017, with a combination of an increased tax credit and cuts in USC rates delivering gains to many of around 2 per cent in take-home pay.
The Minister for Finance, Michael Noonan, increased the earned income tax credit by €400 to €950 and while the rise was less than expected it was still enough to leave the self-employed as among the bigger net gainers from the Budget tax measures. Like their PAYE counterparts, they also benefited from the USC cuts.
A married couple on one income from a self-employed person earning €55,000 will gain €778, or €15 a week. A couple in similar circumstances with the earner taxed on PAYE will gain €278 from the tax changes, or €5 a week.
Main tax measures
The USC cuts were the main tax measure in the budget, benefiting anyone earning over €13,000, the income limit at which people are brought into the USC cut. The cuts in the three lower USC rates by 0.5 of a point each will deliver just under €230 to someone earning €45,000 and the maximum cash gain is €353, which benefits anyone earning €70,000 or more.
There were no measures this year to claw back any gains from higher earners. While the three lower USC rates were cut, the entry level of €13,000 on which people become liable for the tax on all their income was left unchanged. The main income tax bands and credits were also left unchanged, meaning taxpayers will pay a bit more tax if they get wage and salary increases.
In an unusual budget package, the only clawback from taxpayers was a 50 cent hike of a pack of cigarettes. Earlier plans to increase the tax on diesel were abandoned and the only other revenue raiser was a promised crack-down on tax evasion and a limited €50 million extra from vulture funds from the closure of a tax loophole.
Elsewhere the other major tax concession was directed at first-time housebuyers, with a tax refund of up to €20,000 on those buying newly built homes valued at up to €600,000. Young families will also gain from a new childcare package which will kick in from next September.
The Minister for Finance announced that the budget deficit target for next year would be 0.4 per cent of GDP and that he planned in future to set a target to reduce the debt to GDP ratio below the 60 per cent required by the EU rules to around 45 per cent. Department of Finance briefing papers on the budget pointed out that the revision of the GDP figures had complicated the key budgetary figures.
A separate study by the Department of Finance published along with the budget outlined the threat of Brexit. The Department’s economic forecasts were completed on the basis of a sterling forecast of 85p against the euro, but by yesterday sterling was trading at 91p. The analysis said that the exposed Irish sectors were mainly Irish owned, based in the regions outside Dublin, have low profits levels and account for significant employment.
In response to the budget, Moody’s, holder of the most cautious view of Ireland’s creditworthiness among leading credit rating agencies since the financial crisis, has said its concerns about the State’s finances remain unchanged after Budget 2017.
“The economy’s high level of volatility due to the openness and large presence of multinational corporations implies that Ireland needs larger fiscal and financial buffers to deal with economic shocks than its peers,” said Kathrin Muehlbronner, Moody’s lead sovereign analyst for Ireland.
Sterling slumps to seven-year low of 91.4p against the euro?
Department of Finance economic forecasts based on 85p exchange rate for next year
The euro has appreciated by more than 19% against sterling since the UK voters decided in June to exit the European Union.
Sterling plunged 1.2% against the euro in late trading on Tuesday to hit a seven-year low of 91.4p as investors continued to fret about a hard Brexit.
The euro has appreciated by more than 19% against sterling since UK voters decided in June to exit the European Union, with the pace accelerating since British prime minister Theresa May said on October 2nd that she will start the formal Brexit negation process by the end of March.
Sterling also hit a fresh 31-year low against the dollar, falling almost 2% on Tuesday, to $1.209 after European markets closed.
Anil Kashyap, a newly appointed member of the Bank of England’s financial policy committee, added to nervousness around sterling on Tuesday after telling a British parliamentary committee that that a hard Brexit, where the UK gives up membership of the single market, could lead to a further drop in the value of currency. Bank of England monetary policy committee memberMichael Saunders said in written testimony that he would not be surprised if sterling falls further.
“The sentiment on sterling is closely tied to expectations of hard Brexit,” said Georgette Boele, a currency and commodity strategist at ABN Amro in Amsterdam, adding that the Bank of England officials’ “comments are not helpful at all”.
A Euro’s surge
The Department of Finance highlighted in documents published in conjunction with Budget 2017 that the euro’s surge against sterling “will pose significant challenges, particularly for parts of the exporting sector and areas sensitive to cross-border trade.”
It warned that the long-term impact of Brexit will “crucially” depend upon the post-exit relationship between the UK and the EU, with a “soft exit” clearly preferable to a “hard” one what would involve trade restrictions.
“More recent developments in the euro-sterling bilateral rate, if sustained, could be problematic for some firms, especially those in labour-intensive industries with tighter profit margins,” the Department said.
Indeed, the Department’s forecasts that the economy, as measured by gross domestic product, will grow by 4.2% this year and 3.5% in 2017 is premised on the euro being valued at 81p in 2016 and 85p next year.
Department documents place a “high” risk against the foreign exchange rate in its list of external factors facing the economy.
Minister for Finance Michael Noonan said in his Budget speech on Tuesday that he decided to retain a 9% value added tax (Vat) rate for tourism related activities next year to underpin the industry in the wake of Brexit.
“This will act as a buffer for the sector against the weakness in sterling, which increases the cost of holidaying in Ireland for British tourists,” he said.
Ireland’s tourism sector, which accounts for over 150,000 jobs, is highly dependent on UK visitors, who accounted for 3.5 million overseas trips to this country last year, according to the Government.
New (PEM) gateway network of opportunity opens at IT Sligo
The opening of the new precision engineering, manufacturing (PEM) Technology Gateway at the Institute of Technology of Sligo has heralded the beginning of greater opportunities and developments in this area.
Funded by Enterprise Ireland, the PEM Technology Gateway was launched by the Minister of State for Employment and Small Business, says Deputy Pat Breen.
The PEM Gateway provides a resource network targeted at companies based both in the North West and nationally. It aims to give companies an opportunity to develop their business through collaborative research and development while networking with other businesses in the area.
The network has a particular focus on start-ups and SMEs, enabling companies to source technology solutions for their ‘close-to-market’ needs.
The Technology Gateway Programme was established by Enterprise Ireland (EI) to provide business development resources to the Institutes of Technology to help them interact with industry on a local, regional and national basis.
As part of this network IT Sligo is receiving €275,000 over a two-year period (Jan 1, 2016 – Dec 31st 2017) from EI.
Gearoid Mooney, Divisional Manager Research & Innovation, Enterprise Ireland said: “Since its formation in 2013, the Enterprise Ireland Technology Gateway Programme has created a nationwide network of 15 industry focused Gateways located in 11 Institutes of Technology.
“The PEM Gateway now established in IT Sligo is a significant addition to this network, delivering high tech innovative solutions in precision engineering, manufacturing and materials. The Technology Gateways have a proven track record of working seamlessly with industry and the PEM Gateway will further incentivise business ideas with potential for growth in the North West region, providing access points to companies of all sizes, particularly start-ups and SME’s.”
The new President of IT Sligo, Dr Brendan McCormack, said the new Technology Gateway was an endorsement of region’s expertise and heritage in precision engineering, tool making and manufacturing over the past forty years, and also represented another pillar in the collective industry ambition for region to establish a world class Centre of Excellence in the manufacturing of precision engineered products.
“The North West of Ireland is striving to build an economic base that will provide livelihoods for its people and that will support vibrant communities across the region,” he said.
Dizziness when standing suddenly “increases the risk of dementia”
Feeling a bit light-headed and dizzy when standing up suddenly may be a warning sign of Alzheimer’s, research has now shown.
Scientists who studied the effect in more than 6,000 healthy individuals found that it increased the risk of dementia by up to 39%.
The sensation is caused by a temporary drop in blood pressure, which is thought to trigger brain damage if it occurs repeatedly.
The dizzy spell phenomenon has the medical name orthostatic hypotension (OH) and is especially common among the elderly, affecting 20% to 30% of this population.
For a brief period of time it can result in a shortage of blood flowing through the brain, depriving nerve cells of oxygen and nutrients.
The study tracked 6,204 men and women aged 55 and over for 15 years on average and recorded how many of them developed any type of dementia, including Alzheimer’s.
Almost a fifth of participants regularly experienced a significant drop in blood pressure within three minutes of standing from a resting position. They were classified as being prone to OH.
Compared with those who did not feel dizzy when standing up, this group was 15% more likely to develop dementia.
The association was especially strong when a person’s heart rate did not speed up to compensate for the momentary drop in blood pressure, the Dutch study showed.
For individuals in this category, the long-term risk of dementia was raised by 39%.
The research, led by Dr Arfan Ikram, from Erasmus Medical Centre, is reported in the online journal Public Library of Science Medicine.
Summing up their results, the authors wrote: “We found OH to be associated with long-term risk of dementia on continuous follow-up, independent of various other risk factors.
“The most apparent explanation for our findings is that OH causes brain damage due to recurrent transient cerebral hypoperfusion (low blood flow).
“Brief episodes of hypoperfusion elicited by sudden blood pressure drops may lead to hypoxia (oxygen deprivation), with detrimental effects on brain tissue via, for instance, neuro-inflammation and oxidative stress.”
Of the study participants who developed dementia, almost 80% had Alzheimer’s disease and 8% had a vascular form of the condition linked to impaired blood supply.
The relative risk of both was increased to the same extent by recurrent episodes of OH, the scientists said.
Dr Laura Phipps, from the charity Alzheimer’s Research UK, said: “This study highlights the important role of the blood supply, not just in contributing to vascular dementia, but potentially playing a role in other forms of dementia too.
“While many studies have focused on the risks of high blood pressure, this study suggests that transient low blood pressure could also have a long term impact on the brain.
“While the risks found in this study are reasonably small compared to other known risk factors for dementia, it adds to a growing and complex picture of how blood pressure changes throughout life can impact the brain.”
Mice produce ultrasonic songs with a unique way of making sounds
Researchers have just discovered that mice have a unique way of making ultrasonic sounds. These high frequency vocalizations are mostly used as mating calls. The findings are in a paper that was just published in the Current/Journal Biology.
Mice communicate with high pitched noises and some of these vocalizations are at a frequency not detectable by humans. Their ultrasonic songs are generally used for courting behaviors but are sometimes used in territorial disagreements. Researchers study the songs because it allows them to discover how different drugs may affect mouse vocalizations. For example, scientists want to know when the songs change if they’re testing autism treatments or speech disorders. While researchers had known about mouse songs for a long time, scientists were unsure how the animals created these noises.
Researchers from Washington State University collaborated with laboratories in Denmark and the United Kingdom. The research team used high-speed video to determine how mice make their ultrasonic calls. They were surprised to find that the rodents weren’t vibrating vocal folds in the larynx, like most animals, to create the noises. Instead, mice push a tiny jet of air from the windpipe onto the laryngeal inner wall. The jet of air hits the wall of the larynx and creates a very high frequency whistle. The research team notes that this technique has never been seen in an animal. In fact, this unique mechanism is currently only seen in jet engines.
Mice use a novel method to produce ultrasonic noises when courting mates. Their technique of pushing a stream of air onto the inner wall of the larynx has never been seen in an animal. The findings will provide new insights into mouse vocalizations, helping researchers understand how different drugs affect speech. When testing a medication for stuttering, for example, researchers need to know how it affects mouse songs. The research team believes their research will help scientists develop better methods for studying speech disorders and autism.