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

Auditor #9 wrote:

tonys wrote:

Auditor #9 wrote:

Tax Revenue down by 1.8 bn on last year ....

Quote :

The Taoiseach has told the Dáil that more Government spending cuts and/or higher taxes will be announced before the end of the month.

http://www.rte.ie/news/2009/0303/economy.html

Lets hope they get it right this time

Time to speculate:

lower band to 22%
higher band to 45% maybe 48%
introduction of lower band / super high band ??
tax on social welfare
carbon tax

The biggest changes will be the moving of the bands. Tens of thousands will be brought back into the tax net. Tens of thousands more will find themselves paying tax at the higher rate. I think there will be tax on children's allowance too, at least where it goes to people with combined incomes in excess of €100K.

A cut in social welfare and the dole also has to be an unpalateable possibility.

tonys wrote:

cactus flower wrote:

Some very creative thinking is needed. As the country with the highest per capita debt in the EU, That's personal debt not national debt, we have one of the lowest national debts in the EU, but even with personal debt we are also one of the highest if not the highest in the EU when it comes to personal wealth to back up the personal debt.

a lot of people will default on debt if they are taxed more. This will clearly have a knock on onto the wider economy. This is not true to say, at the moment 95% of those who were working last year are still in employment and by the end of the year when the worse job losses are behind us it is probable that 90% will still be in employment and still able to meet their commitments even with higher tax, for the rest they will be unemployed anyway so tax is not an issue.

Devil and deep blue sea

Stopping all new capital spending projects may well be the least damaging option (and on its own wont be enough to stop default. This would hurt the construction sector most, so is not likely to happen with a FF government. Bad move, capital spending is our stimulus package, some changes, no problem, but don't stop spending.

I think it may be time to start a "Default thread" and see what has happened to countries that have done it in the past. If you want to spend time looking down the hole, do by all means, but spending your time trying to stay out of it has to be more profitable.

tonys, it is a year now since the beginning of the economic and fiscal crisis and Government is spending more now than then. https://machinenation.forumakers.com/economy-business-and-finance-f8/irish-economy-and-budget-watch-we-need-an-emergency-budget-garret-fitzgerald-t281-75.htm

The reason we are facing potential default is that for ten years spending has been ramped up on a faulty economic base with acute ovrerealiance on FDI and construction.

My point was that a lot of household budgets are already overstretched. The wealth you are talking about is mainly overpriced property.

The announcement of the "Finance Number 2 Bill" mini budget in three weeks time gives me absolutely no confidence that they are any more fit to govern now than they were then. Another bit of ill prepared hacking around, more uncertainty and no strategy.

Zhou_Enlai wrote:

Auditor #9 wrote:

tonys wrote:

Auditor #9 wrote:

Tax Revenue down by 1.8 bn on last year ....

Quote :

The Taoiseach has told the Dáil that more Government spending cuts and/or higher taxes will be announced before the end of the month.

http://www.rte.ie/news/2009/0303/economy.html

Lets hope they get it right this time

Time to speculate:

lower band to 22%
higher band to 45% maybe 48%
introduction of lower band / super high band ??
tax on social welfare
carbon tax

The biggest changes will be the moving of the bands. Tens of thousands will be brought back into the tax net. Tens of thousands more will find themselves paying tax at the higher rate. I think there will be tax on children's allowance too, at least where it goes to people with combined incomes in excess of €100K.

A cut in social welfare and the dole also has to be an unpalateable possibility.

I don't think it will be wholesale changes, they'll leave that until after the tax review, this time it will be something simple like an increase in the rates to 22% & 45% and with a new rate of say 50/55% for earnings over 100,000 maybe, that would bring in about 3 billion extra.

Yes, the last budget shouldn't have included an increase in social welfare and probably should have introduced tax rises then.

See below how the servicing of the National Debt has gone up by nearly 70 million a month too ...

The stuff in the red box is on a right head-on collision course with a wall ... (although VAT isn't down that much !)

Just on RTE 6 One now they're saying the deficit could be over 2bn below their own estimates by the end of the year ...

(What was that bet tonys and youngdan had on?)

Dempsey on Primetime saying 4 billion has to be cut this year, as a minimum.

Micheál Martin was on Morning Ireland getting a proper scolding by Cathal MacCoille about trying and constantly missing targets (he was aiming it at blithe Mary Coughlan who saying everything was fine last week and under control and he also took a stab at public expenditures on Ministerial luxuries).

The Opposition are going to be invited to see all the books now which is the most enlightened thing that has happened so far. All ideas and inputs need to be considered now as this should have people properly pulling together.

David Begg was also on earlier saying there was a floor or safety net below which we should not dare to go... we haven't a clue what that is at present though.

Now they are talking about emigration to Australia.

There has been a barrage of (mis) information on the media putting out the message that taxing the rich would not raise anything significant and would drive the poor dears back to their tax havens.

The discussion always goes along the line that the rich are paying too much already. This is nonsense. The last ten years have seen a gargantuan process of shovelling cash through tax expemptions into the hands of a small class of wealth owners. The gap between rich and poor has widened and some very wealthy people (I'm not talking about people dependent on wages) have paid virtually no tax. They have also been the owners of corporations who have benefited from a very low rate of tax, and can hold assets like property and art in those companies, untaxed. Up until last year they could put unlimited amounts into "pensions" that were also used to buy property in many cases. Given the circumstances we are in, the only chance I can see of avoiding a default position is to have a one-off wealth tax/levy, and take some of this back.

We are hearing a lot about driving "non residents" away. Isn't the whole point that they have already gone?

https://machinenation.forumakers.com/theory-and-history-f17/inequality-t1906.htm?highlight=inequality

I'm afraid it is going to have to be both, cactus. We have a gap of some 20 billion here, and that is just for this year. You can add Seán Quinn, Denis O'Brien, Tony O'Reilly and Dermot Desmond together, seize ALL their assets and you would not even come close to plugging that gap and again, that is only this year's deficit. In fact Warren Buffet could probably only keep us afloat for 18 months.

According to that same survery which you posted on the Prime Time Heckle, 72 percent of that 'wealth' is the value of properties held. Well firstly the value of those properties is seriously diminished and secondly it would be even further diminished if you had to devalue them on paper to the level that you could actually be guaranteed of shifting them - which is their true value. I wonder what percentage of that 'wealth' was held in shares. I was talking to someone last week who had invested 150,000 euro in both AIB and BOI shares about 36 months ago, it was a large part of his private pension to last him through retirement. Those shares, then valued at 300,000 are now worth 3,000 euro - try extracting a wealth tax from that guy.

I'm not against a wealth tax but you really have to remember our whole economy is on life support. It isn't as simple as whacking a tax on the super rich and off we go again. People keep harping on about Scandanavian economies and Scandanavian models of society. If we lived in Scandanavia people on higher incomes and lower incomes would both be paying a hell of alot more tax.

CF - without figures to back up your post it adds up to nothing more than wishful thinking. It is certainly clear that as far as income tax goes taxing the rich will not get us enough. The idea of a wealth tax is interesting if there is any way of applying it to people who can actually raise cash to pay it.

However, at some level, it is wrong to ask people who have amassed a lot of wealth to pay more if others are not paying anything. Everybody with earnings must pay at least some tax. If I had huge wealth and I was asked to pay more out of my capital rather than my income while others were asked to pay nothing then I think I would up sticks and leave as it would be clear to me that I was not seen by the rest of the population as being one of them.

They were talking about a 1c tax on text messages. Sounds like a good idea.

I think there should also be a 10% tax with 10c minimum on all for-profit phone calls and texts, i.e. radio shows, directory enquiries, ringtone purchase, mystic meg and sex lines.

What would raising DIRT by 1% achieve and what would its draw backs be?

We don't want dirt tax evasion with money going out of the country?

More to the point, DIRT is taxed on interest earned on deposits. Because interest rates are so low DIRT will be severely reduced and an increase of 1% will not halt the decline.

Can anyone explain to me the huge increase in Dept of Health expenditure for the first two months? Is it the new contracts for Doctors? Well done Mr. Reilly?

Everybody else has managed cuts except Social and Family Affairs, which is to be expected and the Environment, which is a long term investment area.

Zhou_Enlai wrote:

Can anyone explain to me the huge increase in Dept of Health expenditure for the first two months? Is it the new contracts for Doctors? Well done Mr. Reilly?

Everybody else has managed cuts except Social and Family Affairs, which is to be expected and the Environment, which is a long term investment area.

New haircut for Mary ?

You would also have to allow for a big increase in Medical Cards, due to increased unemployment and wage cuts.

Mary Harney has just paid over on the Consultants deal I think. Someone posted on this on another thread, but I can't remember the details.

I wouldn't be a fan of FG, but Harney is the person answerable on contracts entered into by the Department of Health.

In fairness maybe if Dr Reilly is that shrewd a negotiator he would be better on the Government benches where he could put his abilities to use.

The blame for that bad deal lies squarely at the feet of the Government who wanted to rush it through before an election. Dr Reilly merely did a very good job for the sector he, at that time, represented. We need more people capable of such representation in Government and less people who are prepared to sign off on very bad deals.

Zhou_Enlai wrote:

They were talking about a 1c tax on text messages. Sounds like a good idea.

I think there should also be a 10% tax with 10c minimum on all for-profit phone calls and texts, i.e. radio shows, directory enquiries, ringtone purchase, mystic meg and sex lines.

A filth tax ?

On the doctors and HSE costs - remember the German ambassador talking about how our consultants said that their 210k salaries was Mickey Mouse money ??! Why weren't we keeping or trying to keep our costs and public salaries and wages in line with those of Europe ??? Maybe the reality is we are - must have a root around on statistics sites just to see.

Martin Cullen spending 3k on a helicopter also making the newswaves.

Fintan O'Toole's proposal to change state supplements on voluntary pension contributions was rubbished by Moore MdDowell this morning on Pat Kenny. O'Toole said it would bring in close to 3bn and would be effective immediately.

I heard a statistic a while back that a University lecturer in Malta earns the same as a swimming pool attendant in Dublin City Council.

johnfás wrote:

I heard a statistic a while back that a University lecturer in Malta earns the same as a swimming pool attendant in Dublin City Council.

On the other hand and in all fairness, if you were drowning in Dublin, a Uni lecturer in Malta wouldn't be the first thing to cross your mind.

Help!! I need a lecturer from Malta.
No, I can't see that working.

On the other hand I qualified as a lifeguard as part of my Physical Education programme at secondary school and indeed worked for a summer, aged 18, as a swimming pool attendant. I do not think that my qualification and experience aged 18 merited my rate payable being superior to that who has achieved a doctoral level education.

We might not want to lower our academic salaries to the level of Malta, and indeed we do not, but it is another example of just how uncompetitive we are. I even know a number of university professors who say they are overpaid, I was only talking to one the other day.

johnfás wrote:

On the other hand I qualified as a lifeguard as part of my Physical Education programme at secondary school and indeed worked for a summer, aged 18, as a swimming pool attendant. I do not think that my qualification and experience aged 18 merited my rate payable being superior to that who has achieved a doctoral level education.

We might not want to lower our academic salaries to the level of Malta, and indeed we do not, but it is another example of just how uncompetitive we are. I even know a number of university professors who say they are overpaid, I was only talking to one the other day.

Well that is the new reality and something we will all have to take into account over the next 4/5 years or so.

johnfás wrote:

In fairness maybe if Dr Reilly is that shrewd a negotiator he would be better on the Government benches where he could put his abilities to use.

The blame for that bad deal lies squarely at the feet of the Government who wanted to rush it through before an election. Dr Reilly merely did a very good job for the sector he, at that time, represented. We need more people capable of such representation in Government and less people who are prepared to sign off on very bad deals.

Perhaps "Two Hats" Reilly showed great skill in negotiating a great deal. However, I don't see much difference between what he did and what the bankers did, i.e. using greed as the metric of reward and screwing the shareholders/patients for the personal benefit of the employees.

Zhou_Enlai wrote:

johnfás wrote:

In fairness maybe if Dr Reilly is that shrewd a negotiator he would be better on the Government benches where he could put his abilities to use.

The blame for that bad deal lies squarely at the feet of the Government who wanted to rush it through before an election. Dr Reilly merely did a very good job for the sector he, at that time, represented. We need more people capable of such representation in Government and less people who are prepared to sign off on very bad deals.

Perhaps "Two Hats" Reilly showed great skill in negotiating a great deal. However, I don't see much difference between what he did and what the bankers did, i.e. using greed as the metric of reward and screwing the shareholders/patients for the personal benefit of the employees.

I can agree with you on this one. I don't know that it is particularly about Reilly: I assume he had a baying pack of doctors behind him. I would love to see a genuine picture of the average earnings of G.P.s and consultants in Ireland. In Germany a consultant is on about € 100,000 and is glad to get it. We have far to few doctors here, amongst the lowest per capita in europe, on far too much pay.

Most GPs aren't on the huge salaries that some would suggest - I live with one.

johnfás wrote:

Most GPs aren't on the huge salaries that some would suggest - I live with one.

Full time GP ? Do you want to say how much ?

Nope, that's the problem, you can't get a half time GMS contract - it is a huge discrimination against female GPs at it seriously effects your pension entitlements. But I can assure you the GMS contract holder in the practice is not earning what some would have you believe. It is a complicated situation which most practices have to deal with.

When the media reports on the payments to a GP they don't tell you that isn't the payment to the GPs pocket, that is the payment to the practice out of which they have to pay the mortgage on the premises, the light, heat and insurance, the computer system, the fittings and equipment, the practice nurse, the secretaries and practice manager etc etc etc. Most practices will also have another GP working in subsidiary to the main GMS contract so you have to pay them as well.