Wednesday, October 16, 2013

Brief Irish budget commentary

In the 7th year of austerity and in a policy framework that invites tinkering as opposed to wholesale change, there will be many small budget changes that are hard to keep track of, but one of the strangest -- relative to the amount of commentary it is attracted -- is the abolition of the air travel tax. At the same time that the government is going after various fees and charges for government services, to be cutting what was a fairly small tax on people who can afford to fly seems like a move in the wrong direction. Part of the motivation seems to be to attract more business for Dublin Airport as a regional hub -- in particular by encouraging people across the Irish Sea to travel transatlantic through Dublin on split tickets to avoid the UK travel duty on transatlantic flights. Another is surely to remove what swing voters regard as a nuisance tax, despite the associated loss of revenue. On the positive side, the stateless company wheeze is being abolished.