Economics: From a macroeconomic point of view, the most striking feature of Wednesday's Budget was how stimulatory it was for the overall economy. The cost in 2006 of the measures announced on the day amounted to €2.7 billion and will cost over €3 billion in a full year.
That is the equivalent of more than 2 per cent of GNP and is a significant injection into an economy that is already expanding at a fair old clip.
After the entire budgetary process was completed, current spending is set to increase by 11 per cent, capital spending is forecast to increase by 15 per cent and the income tax package will inject an extra €900 million into the pockets of consumers.
Indeed, most of the giveaways will end up in the pockets of consumers. The combination of the tax cuts, social welfare increases, the new supplementary child allowance and the additional support for the elderly will add 2.5 per cent to consumer incomes next year.
And these are incomes that are already growing very strongly. This year, average earnings will increase by about 5 per cent and the numbers in employment are growing at the same rate. That means that the annual wage bill is rising at a rate of 10 per cent in nominal terms.
On top of all this there is the prospect of the SSIA accounts maturing over the 12 months between May 2006 and May 2007. In total, these amount to €16 billion, the equivalent of 12 per cent of GNP and a massive 20 per cent of consumer spending.
There must be some danger here that the stoking of the consumer becomes overdone and that the overheating problems that surfaced in 1999/2000 could return.
Moreover, these issues could be further compounded if, as seems likely, we get more of the same again next year.
Even after all the giveaways, the Minister targeted a very modest deficit of just 0.6 per cent of GDP and this is based on very conservative forecast for tax revenue, particularly capital taxes.
If the experience of recent years is anything to go by, tax revenues are likely to come in well ahead of target and set up the Minister for another giveaway budget this time next year and a couple of months before a spring election in 2007, and this will come when the flows from the SSIAs are reaching their peak.
The second macro risk that we should be conscious of is this over reliance on capital taxes - stamp duties and capital-gains taxes in the main.
In the current year, it looks like receipts from these taxes will be more than €1 billion better than forecast this time last year. They will be a staggering 145 per cent higher than they were in 2002. In money terms, that amounts to €2.9 billion.
In other words, if we had not had this bonanza from capital taxes, then none of Wednesday's giveaways would have been possible. It would have been back to the bad old days - no indexation of bands and allowances, the usual hikes in excise duties on the old reliables and much much smaller increases in social welfare and childcare.
In fairness to those who frame the Budget, they have been cautious each year (overly cautious as it transpired) in expectations for the take from these taxes.
Next year, they expect revenue from these headings to increase by less than 3 per cent and, judging by recent trends, they will probably err on the conservative side again, but some day, this bonanza will come to the end.
These taxes are unlike normal income or expenditure taxes. Incomes or spending would have to fall for the associated tax receipts to decline. But you do not require capital losses for receipts from capital gains taxes to fall. All you need is for the gains in one year to be lower than the previous year.
In other words, asset prices do not have to fall. All that is required is that they rise at a slower pace than the previous year. That does not look likely this year or next but it is a chicken that will eventually come home to roost.
At the micro level, one has to wonder whether opportunities for reform, particularly tax reform, are being missed when the volume of resources that are available are so large.
In a neutral revenue environment, reforming the tax regime means that there will be some winners and some losers. That makes reform all the more difficult because, inevitably, the losers shout much louder than the winners.
In fairness, there has been a good deal of reform over the last number of years - the reduction of the capital gains tax to 20 per cent, the introduction of tax credits and the simplification of the tax code to two rates with the lower rate now at 20 per cent .
But we are still left with the situation where a single person earning not much more than €35,000 per annum is paying a marginal tax rate of 48 per cent.
That arises because we have two other income tax codes operating beside the main one - the 2 per cent income levy and the 4 per cent PRSI on incomes up to €46,600. It is time that these different codes are integrated into one. In the process, many of the unforeseen high marginal tax rates at low incomes will be eliminated.
Sometimes we kid ourselves that we are a nation of low taxes. The guy on €35,000 is not operating in a low-income tax regime, we have the highest VAT in Europe and our cars are heavily taxed.
Indeed, it would have been nice to see some innovation on the taxation of transport with the tax code building in incentives to encourage more efficient patterns of travel.
For example, a significant portion of the taxation of cars comes in VRT tax and the annual road tax. These taxes are once-off or annual levies that build in no incentives to change travel patterns whatsoever.
Robbie Kelleher is chief economist at Davy Stockbrokers.
