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Post Budget Analysis
Thursday 13th Dec 2012
Budget 2013
A Public Finance Perspective

           Simon Barry
Chief Economist Republic of Ireland




          December 2012
Fiscal correction now in its 5th year

           Adjustment Package                     Main consolidation form                    Planned Impact €bn*

           1. July 2008                                         Expenditure                                1.0

           2. October 2008
           (Budget 2009)                                         Revenue                                   2.0

           3. February 2009                                     Expenditure                                2.1

           4. April 2009                                         Revenue                                   3.5
           (supplementary Budget)                               Expenditure                                1.8

           5. December 2009
           (Budget 2010)                                        Expenditure                                4.1
                                                                 Revenue                                   0.1

           6. December 2010                                     Expenditure                                4.0
           (Budget 2011)                                         Revenue                                   1.4
                                                                   Other                                   0.7

           7. December 2011                                     Expenditure                                2.2
           (Budget 2012)                                         Revenue                                   1.1

           8. December 2012                                     Expenditure                                2.3
           (Budget 2013)                                         Revenue                                   1.2

           Total                                                                                          27.5
           * Figures in all cases are broad orders of magnitude and refer to planned full-year gross impacts




                                                                                                                   Slide 3
Consistency on spending/revenue breakdown remains
in place

                       Fiscal Adjustments to Date


                        Spending/Revenue breakdown
                             Budgets 08 - 12   Budget 2013


   Expenditure                     65%            65%


   Revenues                        35%            35%



   Source: Department of Finance




                                                             Slide 4
Budgetary policy over ’08-’12 has, in its totality, been clearly progressive;
the largest reductions in income have been on those with highest incomes


              Impact of Budgets 2008-2012 by Income Decile (% of
                                   Income)

        %
             Bottom    2nd   3rd   4th   5th   6th   7th   8th   9th   Top
         0
        -2
        -4
        -6
        -8
       -10
       -12
              Source: ESRI
       -14


                                                                             Slide 5
…but Budget 2013 PRSI change is regressive


                                                        Average Tax Rate (%)


                                     Single, No Children, Private Sector
                                                                               Change 2012 vs.   Change 2008 vs.
    Gross Income                    2008 (low point )        2012     2013          2013              2013
           30,000                        12.9                16.8     17.7           0.9               4.8
           60,000                        27.5                33.4     33.9           0.5               6.4
         120,000                         35.4                42.7     42.9           0.2               7.5




                       Married Couple, 1 Incomes, 2 Children, Private Sector
                                                                               Change 2012 vs.   Change 2008 vs.
    Gross Income                    2008 (low point )        2012     2013          2013              2013
           30,000                         5.1                 8.6      9.5           0.9               4.4
           60,000                        19.8                26.2     26.6           0.4               6.8
         120,000                         31.6                39.1     39.3           0.2               7.7

    Source: Department of Finance




                                                                                                                   Slide 6
The public finances are showing improvement; the underlying
deficit ex interest payments has halved since ‘09…

               General Government Primary Balance, Eur bn
                                            (ex Banking Costs)
       10

       5

   -

       -5

   -10

   -15
              Source: Ecowin, UB, Department of Finance
   -20




                                                                                  f
               06




                            07




                                          08




                                                       09




                                                               10




                                                                       11



                                                                               12
            20




                         20




                                       20




                                                    20




                                                            20




                                                                    20



                                                                            20
                                                                                      Slide 7
…helped by now-improving revenues…

                                                                                                                                                        General Government Revenue, Eur bn
                                   Exchequer Tax Revenue, €m
50,000                                                                                                                                 70

45,000
                                                                                                                                       65
40,000
                                                                                                                                                                                           up Eur1bn from '10 low
35,000                                                                                                                                 60
30,000
                                                                                                                                       55
25,000

20,000                                                                                                                                 50
                  2002       2003        2004       2005        2006       2007       2008        2009       2010        2011 2012e




                                                                                                                                                06




                                                                                                                                                              07




                                                                                                                                                                            08




                                                                                                                                                                                      09




                                                                                                                                                                                               10




                                                                                                                                                                                                          11




                                                                                                                                                                                                                       12
Note: 2011 figures incorporate the reclassification of health levy receipts into the Universal Social Charge. Excluding this effect,




                                                                                                                                             20




                                                                                                                                                           20




                                                                                                                                                                         20




                                                                                                                                                                                   20




                                                                                                                                                                                            20




                                                                                                                                                                                                       20




                                                                                                                                                                                                                    20
tax revenues were still up in 2011, but by 0.8% y/y rather than the headline increase of 7.2%
                                                                                                                                       Source: Ecowin, UB, Department of Finance




                                                                                                                                                                                                               Slide 8
Non-interest spending is down ca 15% (Eur11 bn) from
the 2008 peak

                General Government Primary Spending, Eur bn
                                          (ex Banking Costs)
        80
                                                                   down Eur11bn since '08
        70
        60
        50
        40
        30
        20
        10
    -
                06




                           07




                                        08




                                                      09




                                                              10




                                                                         11




                                                                                         12
             20




                                     20




                                                           20




                                                                                      20
                        20




                                                   20




                                                                      20
   Source: Ecowin, UB, Department of Finance, UB




                                                                                              Slide 9
Overall fiscal position ahead of EU/IMF targets for over
2 years…


          EU/IMF Programme Primary Balance Targets:
                 Performance vs. Benchmark
     0
    -5
   -10
   -15
   -20
   -25
                  1




                                                    2
          0




                               11




                                                                     12
                                            11
                        11




                                                            12
                -1




                                                    -1
        -1




                               p-




                                                                   p-
                                         c-
                        n-




                                                            n-
              ar




                                                  ar
      ec




                                      De
                             Se




                                                                 Se
                                                          Ju
                      Ju
              M




                                                 M
     D




                                    IMF Target   Actual


                                                                          Slide 10
2012 has seen a further significant improvement in
investor perceptions of the country’s creditworthiness…

         %                           8-Yr Govt Bond Yields
 18
 16
 14
 12
             Source: Bloomberg

 10
    8
    6
    4
    2
               0




                                              1




                                                                                  2
     0




                                      1




                                                                          2
                                                       1
                          10




                                                                                             12


                                                                                             12
                          10




                                                                 1
              1




                                               1




                                                                                   1
   -1




                                    -1




                                                                         -1
                                                        1


                                                                  1
           n-




                                            n-




                                                                                n-
                       p-




                                                     p-




                                                                                          p-
                       c-




                                                               c-




                                                                                          c-
ar




                                 ar




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         Ju




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                                                   Se
                    Se




                                                                                       Se
                    De




                                                            De




                                                                                       De
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                                 M




                                                                      M




                                                                                                  Slide 11
…with the EU/IMF programme providing cheap
funding for over Eur55bn of borrowing
              %            Govt Bond Yields vs. EU/IMF Lending Rates
     18
     16
     14
     12
     10
      8
      6
      4
      2         Source: Bloomberg, NTMA

      0
                                            1




                                                                                                                        2
                   1




                                                                                               2
                                                         1




                                                                                                                                     2
        11




                                                                     1


                                                                                12




                                                                                                                                               2
                                1




                                                                                                           2
                                         l-1




                                                                                                                    l-1
                 -1




                                                                                             -1
                              -1




                                                        1




                                                                                                         -1




                                                                                                                                     1
                                                                  -1




                                                                                                                                            -1
                                                     p-




                                                                                                                                  p-
      n-




                                                                              n-
                                                                ov




                                                                                                                                          ov
               ar




                                                                                          ar
                           ay




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                                       Ju




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                                                  Se




                                                                                                                             Se
    Ja




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             M




                                                                                        M
                                                               N




                                                                                                                                         N
                         M




                                                                                                    M
                               9yr yield       avg yield since Jan '11       Original EU/IMF Lending Rate          rate at May '12       Latest (Nov '12)

       Notes: as at end Oct 12, Eur55.3bn of total available Eur67.5bn was drawn down with avg weighted loan life of 10.4 years




                                                                                                                                                            Slide 12
Even after the major effort thus far, deficit remains very large, more
needs to be done to get to deficit to 3% target by 2015


                        General Government Deficit as % GDP
      5
      0
      -5
     -10       3% Stability and Growth Pact Limit

     -15
                     Deficit inclusive of                                              Underlying
     -20             banking sector costs                                              deficit
     -25
     -30
           Source: Ecowin, UB, Department of Finance
     -35
          04


                   05




                                    07


                                            08


                                                       09


                                                               10


                                                                       11


                                                                                  f


                                                                                            f


                                                                                                      f


                                                                                                                f
                            06




                                                                               12


                                                                                         13


                                                                                                   14


                                                                                                             15
                                 20




                                                            20


                                                                    20
       20


                20


                         20




                                         20


                                                    20




                                                                                                20


                                                                                                          20
                                                                            20


                                                                                      20

                                                                                                                    Slide 13
…€5bn of further adjustment to come in ’14 and ‘15

    Fiscal Consolidation Estimates and Breakdown 2014 - 2015

                                    2014   2015   Total   % of Total

    Spending                        2.0    1.3     3.3       65
       Current                      1.9    1.3     3.2       63
       Capital                      0.1     0      0.1        2


    Tax / PRSI                      1.1    0.7     1.8       35



    Total                           3.1    2.0     5.1       100



    Source: Department of Finance


                                                                       Slide 14
Prospective fiscal drag remains considerable but is
easing

         Planned Gross Annual Fiscal Consolidation to 2015,
                             Eur bn
   8
                  Implemented / announced           Planned
   7
   6
   5
                                                        Source: NTMA
   4
   3
   2
   1
   0
       2009     2010     2011     2012      2013f   2014f      2015f



                                                                       Slide 15
PMIs indicate Ireland’s traded sectors are outperforming the
wider euro zone, not just other ‘vulnerable countries’


                                                                        Composite* PMIs: Ireland vs. Eurozone
            Manufacturing PMIs: Ireland vs. IT/Gre/Sp
                                                            65
   65
   60                                                       60

   55                                                       55
   50
                                                            50
   45
                                                            45
   40

   35                                                       40

   30                                                       35
        Source: Markit                                           Source: Markit, * Manufacturing and Services, 3m avg
   25
                                                            30



                         Ireland   Italy   Greece   Spain
                                                                                                         EZ      Ireland




                                                                                                                           Slide 16
The private sector, not fiscal policy, holds the key to Irish
recovery; the latest jobs trends offer much encouragement

           Breakdown of Employment, annual change
                                      (000s)
     50

      0

     -50

    -100

    -150
                                                             Source: CSO, UB estimates

    -200
             9




             0




             1




             2
           09

            9




           10

            0




     D 1
            1




           12
          09




          10




          11




          12
         -0




         -1




         -1




         -1
         -1
         -0




           1

         -1
        p-




        p-




        p-




        p-
       n-




       n-




       n-




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       ar




       ar




       ar
      ec




      ec




      ec
     Se




     Se




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     Se
     Ju




     Ju




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     Ju
     M




     M




     M




     M
     D




     D




                  Private Employees       Public Employees       Self Emp



                                                                                         Slide 17
This document is intended for clients of Ulster Bank Limited and Ulster Bank Ireland Limited (together and separately, "Ulster Bank") and
is not intended for any other person. It does not constitute an offer or invitation to purchase or sell any instrument or to provide any
service in any jurisdiction where the required authorisation is not held. Ulster Bank and/or its associates and/or its employees may have a
position or engage in transactions in any of the instruments mentioned.


The information including any opinions expressed and the pricing given, is indicative, and constitute our judgement at time of publication
and are subject to change without notice. The information contained herein should not be construed as advice, and is not intended to be
construed as such.

This publication provides only a brief review of the complex issues discussed and recipients should not rely on information contained here
without seeking specific advice on matters that concern them. Ulster Bank make no representations or warranties with respect to the
information and disclaim all liability for use the recipient or their advisors make of the information.

Over-the-counter (OTC) derivates can involve a number of significant and complex risks which are dependent on the terms of the
particular transaction and your circumstances. In the event the market has moved against the transaction you have undertaken, you may
incur substantial costs if you wish to close out your position.

Ulster Bank Ireland Limited. A private company limited by shares, trading as Ulster Bank, Ulster Bank Group and Banc Uladh.
Registered in Republic of Ireland. Registered No 25766. Registered Office: Ulster Bank Group Centre, George’s Quay, Dublin 2.

Member of The Royal Bank of Scotland Group.

Ulster Bank Ireland Limited is regulated by the Central Bank of Ireland

Ulster Bank Limited. Registered in Northern Ireland. Registration Number R733 Registered Office: 11-16 Donegall Square East, Belfast
BT1 5UB. Authorised and regulated by the Financial Services Authority and entered on the FSA Register (Registration Number 122315)
except in respect of our consumer credit products for which

Member of The Royal Bank of Scotland Group.

Ulster Bank Ltd is licensed and regulated by the Office of Fair Trading.

Calls may be recorded.


                                                                                                                                    Slide 18
Brian Harvey
                 The Wheel
Dublin, 13th December 2012
            brharvey@iol.ie

                              19
Our benchmark




                20
Government spend
Down this year -2.3%
Overall, down -4.3% since 2008
Voluntary and community
 sector down -8% to -10% each
 year


                                  21
First, social impact
Maintenance of basic social welfare rates, but
 changes around them have cumulative effect
Welfare rates put are close to poverty line
  Above for older people, below for unemployed
  Poverty began to rise again 2009
This year’s changes:
  Child benefit down to €130
  Jobseeker benefit reduced to 6 to 9 months
  Telephone & household benefits
  Other smaller changes but cumulatively
   important
                                                  22
Second, impacts on V&C sector
►Environment, Community, Local
 Development
  ► LCDP down €6m 2013 to €48.4m
  ► That is -10.9%
  ► Overall reduction is -42%
►If it had been reduced in line with
 government spending, then it would be
 €81.1m (over)
►Housing down -15%, where 34% of
 housing is provided by voluntary housing

                                            23
LCDP
funding
2008-2013
This is a programme
targeted at
disadvantaged
groups and
communities




                      24
Headlines (1)
►Justice & Equality
 ► Department up +2.8%
 ► Equality down -20%
►Education & Skills
 ► Down -0.4%
 ► National Education Psychological Service -2%
 ► FAS training for unemployed -4%
►Development aid
 ► Poverty & hunger reduction -3%
►Tourism, Transport & Sport
  ► Sports -6% (but more, due to underspend 2012)


                                                    25
Headlines (2)
►Arts, Heritage, Gaeltacht
 ► Arts, culture & film, -5% (Arts Council is half)
►Health
 ► Largest funder of voluntary organizations
 ► Main head is -2% (but includes all voluntaries)
 ► Other funding for HSE -1% to -2%
►Youth
  ► €58.3m  to €52.9m in 2013, €49.9m in 2013
  ► Down -9.2%, -5.6%
  ► Most is for disadvantaged youth projects
  ► Counselling -12%, FRCs -5%

                                                      26
Social Protection funding
►Community employment €335 to €351m
►Tus €65m to €96m
►Job Bridge €54 to €81m
►Community services €45.4m to €46m
  ►The only good news, counter-trend.




                                        27
Analysis, conclusions (1)
Level of fall in government spending is small, less
 than 1% a year since economic & social crisis broke
Pattern of disproportionately reducing funding for
 voluntary, community organizations unaffected
   Less in health, more in community (-42% LCDP overall)
2013 has notable reductions in:
   LCDP, 10.9%
   Youth, -9.2%, -5.6%, at a time of 30% youth unemployment
   Equality, -20%, with inequality growing
   Housing, -15%, lists got longer every year since 1987
   Training for unemployed, -4%, with 14% unemployment
   Sport, -6%, despite known health benefits
   FRCs -5%, counselling -12%. No explanation for any of these.
                                                                   28
Analysis, conclusions (2)
Impact on spatial poverty greater than generic
 poverty: targeting of disadvantaged communities
Non-core reductions for those on welfare have
 cumulative effect for those near or already below
 poverty line
Reduced resources for disadvantaged - and those
 who work with them
Reinforces a now well-established cycle of
 immizerization.

                               Thank you for your attention!

                                                           29

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Presentation (simon barry & brian harvey) slides

  • 2. Budget 2013 A Public Finance Perspective Simon Barry Chief Economist Republic of Ireland December 2012
  • 3. Fiscal correction now in its 5th year Adjustment Package Main consolidation form Planned Impact €bn* 1. July 2008 Expenditure 1.0 2. October 2008 (Budget 2009) Revenue 2.0 3. February 2009 Expenditure 2.1 4. April 2009 Revenue 3.5 (supplementary Budget) Expenditure 1.8 5. December 2009 (Budget 2010) Expenditure 4.1 Revenue 0.1 6. December 2010 Expenditure 4.0 (Budget 2011) Revenue 1.4 Other 0.7 7. December 2011 Expenditure 2.2 (Budget 2012) Revenue 1.1 8. December 2012 Expenditure 2.3 (Budget 2013) Revenue 1.2 Total 27.5 * Figures in all cases are broad orders of magnitude and refer to planned full-year gross impacts Slide 3
  • 4. Consistency on spending/revenue breakdown remains in place Fiscal Adjustments to Date Spending/Revenue breakdown Budgets 08 - 12 Budget 2013 Expenditure 65% 65% Revenues 35% 35% Source: Department of Finance Slide 4
  • 5. Budgetary policy over ’08-’12 has, in its totality, been clearly progressive; the largest reductions in income have been on those with highest incomes Impact of Budgets 2008-2012 by Income Decile (% of Income) % Bottom 2nd 3rd 4th 5th 6th 7th 8th 9th Top 0 -2 -4 -6 -8 -10 -12 Source: ESRI -14 Slide 5
  • 6. …but Budget 2013 PRSI change is regressive Average Tax Rate (%) Single, No Children, Private Sector Change 2012 vs. Change 2008 vs. Gross Income 2008 (low point ) 2012 2013 2013 2013 30,000 12.9 16.8 17.7 0.9 4.8 60,000 27.5 33.4 33.9 0.5 6.4 120,000 35.4 42.7 42.9 0.2 7.5 Married Couple, 1 Incomes, 2 Children, Private Sector Change 2012 vs. Change 2008 vs. Gross Income 2008 (low point ) 2012 2013 2013 2013 30,000 5.1 8.6 9.5 0.9 4.4 60,000 19.8 26.2 26.6 0.4 6.8 120,000 31.6 39.1 39.3 0.2 7.7 Source: Department of Finance Slide 6
  • 7. The public finances are showing improvement; the underlying deficit ex interest payments has halved since ‘09… General Government Primary Balance, Eur bn (ex Banking Costs) 10 5 - -5 -10 -15 Source: Ecowin, UB, Department of Finance -20 f 06 07 08 09 10 11 12 20 20 20 20 20 20 20 Slide 7
  • 8. …helped by now-improving revenues… General Government Revenue, Eur bn Exchequer Tax Revenue, €m 50,000 70 45,000 65 40,000 up Eur1bn from '10 low 35,000 60 30,000 55 25,000 20,000 50 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012e 06 07 08 09 10 11 12 Note: 2011 figures incorporate the reclassification of health levy receipts into the Universal Social Charge. Excluding this effect, 20 20 20 20 20 20 20 tax revenues were still up in 2011, but by 0.8% y/y rather than the headline increase of 7.2% Source: Ecowin, UB, Department of Finance Slide 8
  • 9. Non-interest spending is down ca 15% (Eur11 bn) from the 2008 peak General Government Primary Spending, Eur bn (ex Banking Costs) 80 down Eur11bn since '08 70 60 50 40 30 20 10 - 06 07 08 09 10 11 12 20 20 20 20 20 20 20 Source: Ecowin, UB, Department of Finance, UB Slide 9
  • 10. Overall fiscal position ahead of EU/IMF targets for over 2 years… EU/IMF Programme Primary Balance Targets: Performance vs. Benchmark 0 -5 -10 -15 -20 -25 1 2 0 11 12 11 11 12 -1 -1 -1 p- p- c- n- n- ar ar ec De Se Se Ju Ju M M D IMF Target Actual Slide 10
  • 11. 2012 has seen a further significant improvement in investor perceptions of the country’s creditworthiness… % 8-Yr Govt Bond Yields 18 16 14 12 Source: Bloomberg 10 8 6 4 2 0 1 2 0 1 2 1 10 12 12 10 1 1 1 1 -1 -1 -1 1 1 n- n- n- p- p- p- c- c- c- ar ar ar Ju Ju Ju Se Se Se De De De M M M Slide 11
  • 12. …with the EU/IMF programme providing cheap funding for over Eur55bn of borrowing % Govt Bond Yields vs. EU/IMF Lending Rates 18 16 14 12 10 8 6 4 2 Source: Bloomberg, NTMA 0 1 2 1 2 1 2 11 1 12 2 1 2 l-1 l-1 -1 -1 -1 1 -1 1 -1 -1 p- p- n- n- ov ov ar ar ay ay Ju Ju Se Se Ja Ja M M N N M M 9yr yield avg yield since Jan '11 Original EU/IMF Lending Rate rate at May '12 Latest (Nov '12) Notes: as at end Oct 12, Eur55.3bn of total available Eur67.5bn was drawn down with avg weighted loan life of 10.4 years Slide 12
  • 13. Even after the major effort thus far, deficit remains very large, more needs to be done to get to deficit to 3% target by 2015 General Government Deficit as % GDP 5 0 -5 -10 3% Stability and Growth Pact Limit -15 Deficit inclusive of Underlying -20 banking sector costs deficit -25 -30 Source: Ecowin, UB, Department of Finance -35 04 05 07 08 09 10 11 f f f f 06 12 13 14 15 20 20 20 20 20 20 20 20 20 20 20 20 Slide 13
  • 14. …€5bn of further adjustment to come in ’14 and ‘15 Fiscal Consolidation Estimates and Breakdown 2014 - 2015 2014 2015 Total % of Total Spending 2.0 1.3 3.3 65 Current 1.9 1.3 3.2 63 Capital 0.1 0 0.1 2 Tax / PRSI 1.1 0.7 1.8 35 Total 3.1 2.0 5.1 100 Source: Department of Finance Slide 14
  • 15. Prospective fiscal drag remains considerable but is easing Planned Gross Annual Fiscal Consolidation to 2015, Eur bn 8 Implemented / announced Planned 7 6 5 Source: NTMA 4 3 2 1 0 2009 2010 2011 2012 2013f 2014f 2015f Slide 15
  • 16. PMIs indicate Ireland’s traded sectors are outperforming the wider euro zone, not just other ‘vulnerable countries’ Composite* PMIs: Ireland vs. Eurozone Manufacturing PMIs: Ireland vs. IT/Gre/Sp 65 65 60 60 55 55 50 50 45 45 40 35 40 30 35 Source: Markit Source: Markit, * Manufacturing and Services, 3m avg 25 30 Ireland Italy Greece Spain EZ Ireland Slide 16
  • 17. The private sector, not fiscal policy, holds the key to Irish recovery; the latest jobs trends offer much encouragement Breakdown of Employment, annual change (000s) 50 0 -50 -100 -150 Source: CSO, UB estimates -200 9 0 1 2 09 9 10 0 D 1 1 12 09 10 11 12 -0 -1 -1 -1 -1 -0 1 -1 p- p- p- p- n- n- n- n- ar ar ar ar ec ec ec Se Se Se Se Ju Ju Ju Ju M M M M D D Private Employees Public Employees Self Emp Slide 17
  • 18. This document is intended for clients of Ulster Bank Limited and Ulster Bank Ireland Limited (together and separately, "Ulster Bank") and is not intended for any other person. It does not constitute an offer or invitation to purchase or sell any instrument or to provide any service in any jurisdiction where the required authorisation is not held. Ulster Bank and/or its associates and/or its employees may have a position or engage in transactions in any of the instruments mentioned. The information including any opinions expressed and the pricing given, is indicative, and constitute our judgement at time of publication and are subject to change without notice. The information contained herein should not be construed as advice, and is not intended to be construed as such. This publication provides only a brief review of the complex issues discussed and recipients should not rely on information contained here without seeking specific advice on matters that concern them. Ulster Bank make no representations or warranties with respect to the information and disclaim all liability for use the recipient or their advisors make of the information. Over-the-counter (OTC) derivates can involve a number of significant and complex risks which are dependent on the terms of the particular transaction and your circumstances. In the event the market has moved against the transaction you have undertaken, you may incur substantial costs if you wish to close out your position. Ulster Bank Ireland Limited. A private company limited by shares, trading as Ulster Bank, Ulster Bank Group and Banc Uladh. Registered in Republic of Ireland. Registered No 25766. Registered Office: Ulster Bank Group Centre, George’s Quay, Dublin 2. Member of The Royal Bank of Scotland Group. Ulster Bank Ireland Limited is regulated by the Central Bank of Ireland Ulster Bank Limited. Registered in Northern Ireland. Registration Number R733 Registered Office: 11-16 Donegall Square East, Belfast BT1 5UB. Authorised and regulated by the Financial Services Authority and entered on the FSA Register (Registration Number 122315) except in respect of our consumer credit products for which Member of The Royal Bank of Scotland Group. Ulster Bank Ltd is licensed and regulated by the Office of Fair Trading. Calls may be recorded. Slide 18
  • 19. Brian Harvey The Wheel Dublin, 13th December 2012 brharvey@iol.ie 19
  • 21. Government spend Down this year -2.3% Overall, down -4.3% since 2008 Voluntary and community sector down -8% to -10% each year 21
  • 22. First, social impact Maintenance of basic social welfare rates, but changes around them have cumulative effect Welfare rates put are close to poverty line Above for older people, below for unemployed Poverty began to rise again 2009 This year’s changes: Child benefit down to €130 Jobseeker benefit reduced to 6 to 9 months Telephone & household benefits Other smaller changes but cumulatively important 22
  • 23. Second, impacts on V&C sector ►Environment, Community, Local Development ► LCDP down €6m 2013 to €48.4m ► That is -10.9% ► Overall reduction is -42% ►If it had been reduced in line with government spending, then it would be €81.1m (over) ►Housing down -15%, where 34% of housing is provided by voluntary housing 23
  • 24. LCDP funding 2008-2013 This is a programme targeted at disadvantaged groups and communities 24
  • 25. Headlines (1) ►Justice & Equality ► Department up +2.8% ► Equality down -20% ►Education & Skills ► Down -0.4% ► National Education Psychological Service -2% ► FAS training for unemployed -4% ►Development aid ► Poverty & hunger reduction -3% ►Tourism, Transport & Sport ► Sports -6% (but more, due to underspend 2012) 25
  • 26. Headlines (2) ►Arts, Heritage, Gaeltacht ► Arts, culture & film, -5% (Arts Council is half) ►Health ► Largest funder of voluntary organizations ► Main head is -2% (but includes all voluntaries) ► Other funding for HSE -1% to -2% ►Youth ► €58.3m to €52.9m in 2013, €49.9m in 2013 ► Down -9.2%, -5.6% ► Most is for disadvantaged youth projects ► Counselling -12%, FRCs -5% 26
  • 27. Social Protection funding ►Community employment €335 to €351m ►Tus €65m to €96m ►Job Bridge €54 to €81m ►Community services €45.4m to €46m ►The only good news, counter-trend. 27
  • 28. Analysis, conclusions (1) Level of fall in government spending is small, less than 1% a year since economic & social crisis broke Pattern of disproportionately reducing funding for voluntary, community organizations unaffected  Less in health, more in community (-42% LCDP overall) 2013 has notable reductions in:  LCDP, 10.9%  Youth, -9.2%, -5.6%, at a time of 30% youth unemployment  Equality, -20%, with inequality growing  Housing, -15%, lists got longer every year since 1987  Training for unemployed, -4%, with 14% unemployment  Sport, -6%, despite known health benefits  FRCs -5%, counselling -12%. No explanation for any of these. 28
  • 29. Analysis, conclusions (2) Impact on spatial poverty greater than generic poverty: targeting of disadvantaged communities Non-core reductions for those on welfare have cumulative effect for those near or already below poverty line Reduced resources for disadvantaged - and those who work with them Reinforces a now well-established cycle of immizerization.  Thank you for your attention! 29