Irish Economy and Budget Watch / / /Emergency Budget Announced for April 7th

I think the point in your first sentence is on the ball Zhou. Self sufficiency in terms of energy is something we should be aiming for and perhaps with new innovations we have the propensity to achieve this, at least to a large degree. However, as you say achieving this is a longterm goal. It certainly does require investment and research now. But the point that must not be lost in all this is whilst we might be 40 years, or even 10 years from self sufficiency in energy, we are but months from bankruptcy.

When you get the chronically ill person into the operating theatre you would hope that all the backups are in place outside once he emerges from the theatre so that his condition can be managed and his lifestyle changed in order than he live a fruitful life thereafter. However, if you don't get on with that critically surgery in the operating theatre with a degree of haste all of that backup is irrelevant, he will die on the table. We are in that window right now. If the short term situations are not address, albeit with an eye on the longterm, everything we plan for the longer term will be irrelevant and redundant.

The way FF are going about this makes me sick. I wish they would just get on with the cuts rather than this incrimentalism. They would be much better off getting on with it and p***ing everyone off than going after certain sectors like they are doing. Beyond which, I don't buy this "be honest with us and everyone will pull in behind them" approach. Nobody is going to be happy with cuts, everyone wants the other section of society to bear the brunt and everyone has their reasons why. They should just get on with it in this knowledge.

I'll take the photo off if it screws with your screen Zhou....

johnfás wrote:

I think the point in your first sentence is on the ball Zhou. Self sufficiency in terms of energy is something we should be aiming for and perhaps with new innovations we have the propensity to achieve this, at least to a large degree. However, as you say achieving this is a longterm goal. It certainly does require investment and research now. But the point that must not be lost in all this is whilst we might be 40 years, or even 10 years from self sufficiency in energy, we are but months from bankruptcy.

When you get the chronically ill person into the operating theatre you would hope that all the backups are in place outside once he emerges from the theatre so that his condition can be managed and his lifestyle changed in order than he live a fruitful life thereafter. However, if you don't get on with that critically surgery in the operating theatre with a degree of haste all of that backup is irrelevant, he will die on the table. We are in that window right now. If the short term situations are not address, albeit with an eye on the longterm, everything we plan for the longer term will be irrelevant and redundant.

The way FF are going about this makes me sick. I wish they would just get on with the cuts rather than this incrimentalism. They would be much better off getting on with it and p***ing everyone off than going after certain sectors like they are doing. Beyond which, I don't buy this "be honest with us and everyone will pull in behind them" approach. Nobody is going to be happy with cuts, everyone wants the other section of society to bear the brunt and everyone has their reasons why. They should just get on with it in this knowledge.

Jaysus johnfás you should take a break more often you're emitting a volley of mighty posts today don't stop now.

Just can't disagree with you at all and I'd emphasise too that FF are pricking around with elections or seem to be as Garret FitzGerald said they're doing. He's partisan fair enough but this could be a crucial month for FF and the country. On the Pin they just said some stats came out and employment looks like it could be 10% already. That means tax take down, everything down.

As you say the patient is fierce sick and needs emergency treatment. It'll be too late too soonm otherwise.

Thought I'd photograph Zhou's post from the last page as there's stuff in there I'd like to comment on which coc brought up. It's too late to tax builders etc. I think but worth thinking about somehow raising money from those who spent excessively during the boom - it's worth thinking about it and Zhou mentions addressing it towards the end of his post....

From the Irish Times today:

Quote :

A POLITICAL consensus is developing between Government and Opposition about the need for a new budget to raise extra tax this year to deal with the crisis in the public finances.

Minister for Finance Brian Lenihan told a Dáil committee yesterday that taxes would have to be increased, but he did not specify any timescale.

Fine Gael leader Enda Kenny and Labour leader Eamon Gilmore both called on the Government yesterday to bring in a new budget this year.

Quote :

Writing in today’s Irish Times , Fine Gael leader Enda Kenny said his party was prepared to look at budget options for this year such as increasing the current 41 per cent top rate of income tax, examining the scope for a new top rate of tax for those on very high incomes and introducing a carbon levy of €25 per tonne. He also suggested that stamp duty might be abolished and replaced with capital gains tax on the sale of houses of the super rich.

Infrastructure projects such as the Dublin metro would be deferred and Fine Gael would stick with its proposals to control public sector pay, with a two-year freeze on increments and bonuses as well as pay cuts.

Mr Kenny also proposed cutting the number of junior Ministers and the number of Dáil committees in addition to the staff in Ministers’ press and constituency offices.

Mr Kenny said the new budget should be wide-ranging and comprehensive in its scope, and not simply rely on the easy targets for short-term cash-raising. “The international markets need to see that there is a Government with a plan, one that is fair and one that is realistic about getting Ireland out of the mess it is currently in,” he said.

http://www.irishtimes.com/newspaper/frontpage/2009/0227/1224241894653.html

Sounds like they could start doing it and I hope they come up with something wise.

Interesting point from the Irish Times today - a supplementary budget would bring home the gravity of this situation to the public and public workers, would directly tackle the revenue flow issues and would benefit the perception of our reputation internationally.

Are they Parties too stubborn to get themselves together now in this era of the Great Deleveraging which could see us in fairly dire straits.

He's an Anarchist but he's not sure Germany won't be swamped by debt if Eastern Europe goes haywire... Max Keiser on the Oracle
https://www.youtube.com/watch?v=k7PWkHgxkTI

Quote :

Supplementary budget can begin urgent task of restoring depleted tax revenues

Political agreement on a supplementary budget can help restore confidence, writes GARRET FITZGERALD .

A SUPPLEMENTARY budget could have five beneficial effects. First of all, and most obviously, it would pre-empt the negative effect of any further deterioration in our expected revenue flow, the likely emergence of which could further weaken public confidence in the absence of such a budget.

Second, a supplementary budget could help to bring home to domestic public opinion the scale and gravity of our crisis – for despite widespread generalised pessimism, it is clear that many people have yet to grasp just how tough are the corrective measures that will have to be taken over the next couple of years.

Third, however unpopular early increases in taxation may prove to be, the emergence of agreement amongst the Dáil parties on a supplementary budget could help to rebuild confidence in our political system, which has recently been at a low ebb.

Fourth, tax increases on higher incomes in an early budget could help to conciliate the trade unions and avoid further industrial action

http://www.irishtimes.com/newspaper/opinion/2009/0228/1224241983377.html?via=rel

A supplementary budget is certainly preferable to a general election. It's more immediate and that's important for the confidence of the people as well as the economy.

The Times also reports that Eamon Gilmore is calling for the Taoiseach to resign - daft and fruitless talk which will no doubt pander to his constituents but doesn't do much for the state of the nation, imho.

Welcome curmudgeon. I'll put the tay on for you in the signing in thread. In these days of minority support for the government, another poster who will provide the counter arguments will keep us on our toes.

curmudgeon wrote:

A supplementary budget is certainly preferable to a general election. It's more immediate and that's important for the confidence of the people as well as the economy.

The Times also reports that Eamon Gilmore is calling for the Taoiseach to resign - daft and fruitless talk which will no doubt pander to his constituents but doesn't do much for the state of the nation, imho.

Howdy curmudgeon, many welcomes.

I agree with you on both points, though the details of why might differ somewhat.

I don't want to see a general election because I'm pretty sure that the people are not yet convinced that FF are bad news and a general election now would only facilitate a blame game, which would, after the new government fares no better, facilitate mass forgiveness for FF.

I think we'd agree fully about Mr Gilmore. He's making political hay while the sun's shining. His party was in real trouble after Lisbon, particularly so in Limerick, which is where he made his announcement. His rapid rise in the popularity charts is not a true reflection of how people view him I feel. Afterall, he's yet to offer an alternative to all the present and coming cuts. When he eventually is seen to fail at doing this, his rapid rise will facilitate his true fate. Splat!

Thanks for the welcome - o Hermes of the winged sandals.

A general election has nothing going for it. The government'd be hamstrung(er?)for months, the newbies will have to break in their new shoes and we'd be no better off after the hassle and expense of it all. We made our political beds a few months ago - and we can't complain too loudly if we can't sleep in them.

Gilmore is the unattractive guy in the corner that the girls are looking at afresh because the others have been screwing all around them. It's not that he's got anything to offer except that he's not the other two. He's been remarkably silent on the public service levy and has come fairly late to the making hay game, a bit dishevelled and with his shirt hanging out.

I thought you said "of the winged scandals" ...


welcome and I hope you can enjoy all our lovely tech forums - have you any idea how I liberate algae oil out of algae ? I think it could be good for the irish economy over the next while .. .

Gracias, Auditor #9.

re getting algae oil out of algae for the sake of the economy, current best practise across all sectors would appear to be 'squeeze until you make it bleed.' And then squeeze some more...

The failure to do the ground work for making a budget is a big problem. The new wisdom from those who pushed taxation down is that we can now put it up, lickety spit, and pull in a rake of money.

There are whole layers of people who simply will not be unable to pay. A lot of people are already on tight budgets. There have been some reductions for some people (morgage payments) but a lot of lower income people are about to lose child care subsidy, to pay the property levy and if in the public sector the pensions levy. A lot of those households are on short time working / 3 day week or have taken wage cuts. People on higher incomes have saddled themselves with very heavy property and other borrowings. People running businesses are all making less. Taxation increases are likely to impell further unravelling of the economy.

THe Irish banks have loaned 11 times GDP, and we have guaranteed that. Our personal debts are at the highest levels in Europe. Our productive sector is shrinking rapidly and our unemployment must be at 10% by this stage and is still rising steeply. There simply is not any possibility of raising everything that needs to be raised by taxation.

cactus flower wrote:

There simply is not any possibility of raising everything that needs to be raised by taxation.

I don't know of anyone who has suggested there was.

tonys wrote:

cactus flower wrote:

There simply is not any possibility of raising everything that needs to be raised by taxation.

I don't know of anyone who has suggested there was.

Perhaps I should have said that there is no possibility of us raising everything that needs to be raised by any measures that anyone has suggested.

cactus flower wrote:

tonys wrote:

cactus flower wrote:

There simply is not any possibility of raising everything that needs to be raised by taxation.

I don't know of anyone who has suggested there was.

Perhaps I should have said that there is no possibility of us raising everything that needs to be raised by any measures that anyone has suggested.

It will have to be as everyone has suggested, a combination of taxes, cuts in waste & services & getting public service numbers down.

tonys wrote:

cactus flower wrote:

tonys wrote:

cactus flower wrote:

There simply is not any possibility of raising everything that needs to be raised by taxation.

I don't know of anyone who has suggested there was.

Perhaps I should have said that there is no possibility of us raising everything that needs to be raised by any measures that anyone has suggested.

It will have to be as everyone has suggested, a combination of taxes, cuts in waste & services & getting public service numbers down.

And if that isn't enough ?

cactus flower wrote:

tonys wrote:

cactus flower wrote:

tonys wrote:

cactus flower wrote:

There simply is not any possibility of raising everything that needs to be raised by taxation.

I don't know of anyone who has suggested there was.

Perhaps I should have said that there is no possibility of us raising everything that needs to be raised by any measures that anyone has suggested.

It will have to be as everyone has suggested, a combination of taxes, cuts in waste & services & getting public service numbers down.

And if that isn't enough ?

We will have to do whatever we need to do, regardless of pain.

johnfás wrote:

You are precisely right, eoinmn. People are delusional if the think any new budget is going to only tax the wealthy in society. There are going to be cuts in services and a rise in taxation for 90% of people with an income. It is going to have to be in income tax, something which Fianna Fáil seek to avoid most of the time. VAT physically cannot go any higher (it is already damaging our economy) and there is no point doing anything to capital gains because frankly there is nobody in Ireland who has made a profit over the past 18 months. Capital Gains Tax isn't going to recover for several years after the illusionary upturn because you can right off the losses you made during this recession against future profits.

Ireland has really got to realise that it does not have the economic clout or the domestic resources, industry or population to rapidly come up with some radical new departure in global economy whereby we can renounce our ties to the outside world in favour of Dev's crazy dream of self sufficiency. Our debt is all denominated in Euro so even if we were to withdraw from the Euro it would not make a difference, we would devalue our currency but still owe money in Euro. We don't have the domestic demand economy or the indigenuous exporting economy to go it alone. It might be beneficial to do so but it would take years to build up that capacity, Ireland would be bankrupt twice by the time we could achieved it. Our main aim must simply be to survive this situation until the wheels of the global economy begin to turn once again. In order to do that the cutting of costs (including salaries) is going to be, very sadly, a huge factor in our survival.

One has to have huge sympathy for virtually everyone in this society. In some respects this dichotomy between public and private sector workers is a nonsense. The vast majority of workers in both sectors as well as employers in the private sector have had very little do to with the making of this crisis, apart from their implicit 'going with the flow' which almost everyone in Irish society is guilty of from the company which is over leveraged to the 30 year old who with a little foresight might not have signed up for the 40 year mortgage in the first place. However, sympathy and empathy are only going to get you so far. There is plenty of blame to be given but blame is not going to save our economy. While we talk and talk and talk the share value of Irish banks is still declining at near 10% a day, capital outflows continue at a high level. These banks may not last another two weeks. Of course nobody has much sympathy for the plight of these banks but if (when?) they do go bust, people might suddenly realise how little the pension level in the public sector and salary cuts in the private sector actually affect them in comparison to what lies around the corner.

That is an important point johnfás. I am not sure if it is entirely true, we would want advice on that from a banker. It may be the case that some loans say for commercial property abroad were raised in dollars or sterling? It certainly is a mercy we have to be thankful for. Iceland and the non-euro European countries are suffering enormously from the fact that they owe euros and their own currencies have collapsed / devalued.

There is great uncertainty as to whether the eurozone will be able to hold together. If we left, and our currency collapsed, there would be no chance of repaying these euro debts.

The only thing that would reduce our debt would be inflationary expansion. At the moment we have deflation and no possibility of expansion in the short term future.

My apologies if this somewhat disrupts the flow of this thread. I think we're looking at this issue from the wrong perspective. Taxation is a key area, but the current makeup of the way we structure our society will not facilitate taxation having any noticable effect on our problems.

Immediately end the process of paying welfare to the rich. If banks collapse, tough. It'll teach the next lot. And immediately withdraw all promises and money handed over thus far.

Legalise all drugs and tax them.

Disband the drugs squad and redeploy them.

Scrap FÁS.

End private healthcare and nationalise all private healthcare facilities.

Scrap the medical card scheme and give everyone the entitlement of free healthcare without the expensive red tape.

Give everyone in the country the dole, calculated to provide for basic subsistance and then tax the bejesus out of all revenues and set it to an increased rate as income rises, so that earning beyond a certain figure means that you are patriotically working for your country.

End inducements to multinationals coming into our country and demolishing our indigenous projects. Competition is stiff enough without further loading of the deck against our own people.

Step away from complying with CAP (Common Agricultural Policy) and begin to grow what's needed etc.

Compile a list of prices of products to be found in shops around Europe and put a cap on the prices of these products that's equal to the lowest price to be found. Relative wages, indigenous taxation and overheads must be figured into this also. We must end our victomhood. Let our government and justice department be responsible for patriotic shopping.

Make all public transport free. This would unclog our roads, lessen massively our oil dependence and bill, protect the environment, save millions of man-hours wasted in traffic jams and would ensure a whole plethora of other wastes of resources and time would be removed. The cost of doing this would pay for itself many times over.

End all political donations from corporations and end all their lobby groups. Remove IBEC from our government (and list them as an illegal organisation ). Make our government responsible for lobbying such groups and via our justice department, ensure that those tasked to do this remain beyond reproach.

There's a few ideas, and if they were adapted by folks with the ability needed, we'd be well on our way out of this hole.

I see even Warren Buffet lost over 200 million investing in Irish banks over the last year.

A few suggestions for national renewal.

Let the banks collapse.
There’s an opportunity for genuinely free education here, the school of hard knocks for bankers + with all the businesses that would in turn fail following a bank collapse in the two or three months it would take to get the supply of money going again, this would be a tremendous opportunity for a whole new set of business people, who were not absolutely pissed off at losing everything they had, as would be the now useless old set.

Legalise all drugs & tax them.
The tax collected would go at least some of the way to defray the costs of policing the new and very welcome drug abusers from all over Europe & possibly the world who would come to visit us. Opportunity knocks here for a complete new array of doss houses & homeless shelters and all the new employment these would bring. If we could find some way of encouraging drug abusers from outside the EU, so much the better for these lads would not be entitled to the dole as would their European brethren, but even here there is opportunity as while they are here and drawing dole anyway we could ask them, if they didn’t mind, to go to attend various protests in the national interest. Winners all around there I think you’ll have to agree

Disband the drug squad.
As they are largely spoil sports anyway, who'd miss them and as an extra benefit they could be redeployed to immigration duties at our ports & airports to help with our increased numbers of visitors who given their habits are not best placed for finding their way around a new point of entry unaided.

Scrap FAS.
To find yourself in agreement with this proposal all you have to do is ask yourself “what good did retraining or apprenticeships ever do anyone?” Another winner there for sure.

I’ll stop here for now, my head is so full of these and other even more wonderful opportunities, I really need to sort out the flow of true inspiration coming to me before the odd lunatic idea slips through unnoticed

Hermes said

Quote :

Step away from complying with CAP (Common Agricultural Policy) and begin to grow what's needed etc.

That might be raw materials for pharmaceuticals, as this year milk, wheat and beef were all produced at a loss in Ireland.

The CAP was introduced in Europe when there were very serious food supply problems after WW2. Agriculture is enormously volatile. Last year the Ukraine out of the blue produced a huge grain harvest that glutted the market and put virtually every grain farmer in Europe into the red. They are holding on to it to see will prices rise this year - that is a complete unknown as weather conditions are a big part of it.

I'm entirely in favour of planned food production, with a good reserve of food maintained for bad harvest years and any other crises. If food production was left completely to the free market, every last bit of forest would be quarried out globally and there would be virtually no agricultural production in any developed country. That is pretty well where we're heading anyway - its more planning imo, not less, that we need.

Security of food supply for the Community is as relevant, if not more relevant, than it was post WW2, it is just happens not to be an "in" issue presently.

Do ye really think food production could be a relevant issue soon even though it isn't now ? I'd imagined that that was partially why we were in the EU - that food production was somehow planned in some way .... In reality it's probably a lot more complex than planned/unplanned - what I had imagined would be the case is that food security was one of these things that such a large bloc would try to deal with as completely as possible - they'd allow and subsidise and tax and not tax and set aside land and encourage foretry and fish farming etc. within certain guidelines - one of which that there be at least a sustainable food supply for the population that can at least sustain the population and be distributed among them in the event of some emergency. Are ye telling me this is not the case ?

I'd imagined there would be a sort of fallback, backup, skeletal system of energy and food supply and maybe a kind of currency of food stamps dole which could be resorted to in the event of emergencies - droughts, wars, economic depression, energy crises etc. etc.

If you think that's an idiotic idea to base a system on then consider what happened in Europe since the 1850s - famines, two world wars, a fuel crisis in the seventies, regular food contamination hiccups, an economic crisis that is still unfolding .... I think it's the least any country can ask for as it joins such a union - security of energy and food - the bottom of the rung stuff on the hierarchy of needs.

I agree with johnfás and you Auditor #9 - along with the whole financial deregulation thing, the idea that agricultural supports and planning were bad came in. I am not well up on EU and WTO agricultural policies and rules, but the general drift is towards a free market without supports.

This is high risk in the extreme. Now that we are far more aware of sustainability issues as well as food production needs, we could completely rethink priorities and decide, for example, to encourage more extensive and local agriculture rather than intensive product shipped around the world.

The free market promises, and sometimes provides, cheap food. It also wreaks environmental havoc and gives an irregular supply and price.

In the meantime, 8 million euro to be spent on doing up rented offices for the Financial Regulator - annual rent to be about 2.5 million.

http://www.tribune.ie/news/article/2009/mar/01/central-bank-and-regulator-to-spend-8m-on-new-offi/

Does this belong on one of EVM's "vote" threads?