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

Budget moved forward to October - speedy reactions eh Government Statement on the Budget is here - LINK

Quote :

The outlook is for further rises with the unemployment rate heading towards 8 per cent late next year. Davys stockbrokers said that males were still joining the Register at a faster pace than females, suggesting that layoffs in construction are continuing at a strong rate.“According to our estimates, we are not even halfway through the secular shakeout in construction jobs,” it said.

Alan McQuaid, an economist at stockbroking firm Bloxham, said: “The poor Live Register figures are the third awful key number on the economic front in the past twenty-four hours following the sharp deterioration in the Exchequer finances in the first eight months of the year, and the record low hit by the services PMI in August.The Government needs to respond to what is fast becoming an economic crisis and sooner rather than later. Failure to do so will in our view lengthen and deepen the extent of what is now very clearly a recession,” he said.

Ibec director general Turlough O'Sullivan said the economy was now in a much weakened position with all sectors struggling to come to grips with the major challenges including the credit crunch, the costs of doing business including energy, the dramatic downturn in construction and consumer confidence, currency pressures and competition from lower cost economies.

Sinn Fein is calling for recall of the Dail.

Deficit estimated at between 3 and 6 billion, unemployment heading for 8%:
http://www.irishtimes.com/newspaper/breaking/2008/0903/breaking70.htm
http://www.irishtimes.com/newspaper/breaking/2008/0903/breaking82.htm

I thought I heard on Newstalk that there was already an €8billion deficit for the year to date. Can somebody please clarify?

I think we can expect the Government to target the property sector in the budget. The knock-on effects across the board are proving devastating. If the USA and the UK are targetting property in a big way then you can be sure we will do so even more.

No doubt there will be the usual outcry about vested interests, developers getting favourable treatment and the banks being bailed out. The Government won't be worried - the voters won't hold it against them when the vested interest is everybody's interest.

Zhou_Enlai wrote:

I thought I heard on Newstalk that there was already an €8billion deficit for the year to date. Can somebody please clarify?

I think we can expect the Government to target the property sector in the budget. The knock-on effects across the board are proving devastating. If the USA and the UK are targetting property in a big way then you can be sure we will do so even more.

No doubt there will be the usual outcry about vested interests, developers getting favourable treatment and the banks being bailed out. The Government won't be worried - the voters won't hold it against them when the vested interest is everybody's interest.

Sadly - you are probably right - and sadly I cant see what the Gov can do that will make a blind bit of difference to this sector - bar and out and out full scale public building programme. The problem is international and I cant see what effect the US and UK initiatives are going to have either - prices in these sectors spiralled and now they have to come down to come into line with the rest of the economy - particularly as the banking crisis is not over by a long run.

Will be interesting alright

I doubt if the government will have any success if it tries to revive the property sector. It is too large, it would be like hitting a tiger with a fly swat. That sector won't revive until the real value of property falls back or banks start throwing money around again and that is not going to happen for a while.

If Government wants to do anything it should consider reducing tax on small and medium sized businesses, or in sectors it may want to promote like energy production. It needs to be strategically targeted for there are no surplus funds. They need to cut back spending budgets.

Why would anybody suggest building more when there are too many houses already. If this is the best these half-wits can come up with it will be even more comedy than I expected.

youngdan wrote:

Why would anybody suggest building more when there are too many houses already. If this is the best these half-wits can come up with it will be even more comedy than I expected.

Fintan O'Toole, the Irish Times journalist recently asserted that there were 250,000 people in this country who are looking for some kind of house - public, private, affordable. Could that e right? He also quoted that there was a figure of 250,000 houses which were unoccupied because of the excess of holiday homes, second, third homes etc.

Who knows? They could announce changes in mortgage relief... if they don't this year then they'll be doing it next year or the year after. They'll also announce that they're going to borrow a hoorload of money I bet.

youngdan wrote:

Why would anybody suggest building more when there are too many houses already. If this is the best these half-wits can come up with it will be even more comedy than I expected.

It is not necessarily about building more - more about selling secondhand houses, selling what has been built already, freeing up commercial development, avoiding excess negative equity.

A lot of the empty houses are up the hills in Leitrim.

I don't know where Fintan would have got the figure of 250,000 from. That seems crazy. There is a waiting list in Dublin I think of 8,000? There is a lot of overcrowding in social housing. Government has failed to build social housing in any quanitities over the last ten years. They were relying on the social and affordable and PPP agreements that now wont be built.
So we will have empty houses and overcrowded houses at the same time.

In my view, people in demonstrable housing need should be housed - they may otherwise choose to house themselves by squatting and I wouldn't
blame them for that.

That would not overcome the fact that the construction sector has swelled to an unsustainable extent. We don't need 65,000 houses a year. We probably do need 30,000 a year.

Edo wrote:

Time to develop a pair White horse - FG have to stop being so fecking nice - lets consistently tell them what they should be doing and keep telling the electorate in a clear concise and consistent line what we would be doing and the great things we will do for them when we get back in - which hopefully will be just the right timing for a change after having forced FF to do the dirty work and clean up the mess of their own making.

Is it time for a national government - p.ie

Is this what FG should do now? If they sat back and simply lectured the other lads maybe something would rub off...

http://www.breakingnews.ie/World/mhqlgbkfidql/

Perhaps we should ask the Russians to invade.

Would only solve a fifth of our problems .

Are FF a one-trick pony? Have they any concept of an economy, rather than an enclave of property owners?

Quote :

Tánaiste: 'Government will kick-start the housing market'
The Tánaiste is indicating that the Government will be taking steps in the Budget to help the ailing housing market.

The Finance Minister Brian Lenihan announced the decision to bring forward Budget 2009 to October on foot of poor exchequer figures and a rise in unemployment.

He says this will give Ireland a sound base for economic recovery.

Minister Mary Coughlan has said Minister Lenihan has met with representatives of the construction industry to discuss the issue.

"The minister spent a considerable period of time with construction people over the weekend and he will be taking into consideration many of these issues and not just for first-time buyers but for those who need to move on," she [url][/url]

cactus flower wrote:

Are FF a one-trick pony? Have they any concept of an economy, rather than an enclave of property owners?

And greedy bankers who have no compunction about robbing in interest on overpriced, overinflated houses, a market of consumers who are panic-prone or greedy themselves, or perhaps worse, under-educated in terms of monetary values as rockyracoon in the 'Think or Swim' thread wants to explore.

Isn't it established now that there was a market bubble which some people fell foul of, buying homes that were massively overvalued? The question is how many of these people are out there, how much money they are possibly losing and how embittered they'll feel once they see that Mrs. Jones next door is getting twice as much for half the price.

cactus flower wrote:

Are FF a one-trick pony? Have they any concept of an economy, rather than an enclave of property owners?

Quote :

Tánaiste: 'Government will kick-start the housing market'
The Tánaiste is indicating that the Government will be taking steps in the Budget to help the ailing housing market.

The Finance Minister Brian Lenihan announced the decision to bring forward Budget 2009 to October on foot of poor exchequer figures and a rise in unemployment.

He says this will give Ireland a sound base for economic recovery.

Minister Mary Coughlan has said Minister Lenihan has met with representatives of the construction industry to discuss the issue.

"The minister spent a considerable period of time with construction people over the weekend and he will be taking into consideration many of these issues and not just for first-time buyers but for those who need to move on," she [url][/url]

This is why we need, but will never get, real lobbying regulation. The Minister for Finance, who has been notably absent from the scene for most of the last eight weeks had a cosy weekend long chat with the CIF to thrash out how difficult our lives are going to be for the next couple of years. The fact that the Tanaiste of the country is so sickeningly arrogant as to actually flaunt this as action and progress, accurately depicts the utter contempt and disregard that Fianna Fail have for ordinary people. Frontline services will be cut in areas like health and education and the working poor will be forced to shift their lives a few per cent closer to the poverty line, but sure fuck it, the property market might get a shot in the arm. We get what we deserve.

cactus flower wrote:

A lot of the empty houses are up the hills in Leitrim.

I don't know where Fintan would have got the figure of 250,000 from. That seems crazy.

The 2006 census.

Quote :

Isn't it established now that there was a market bubble which some people fell foul of, buying homes that were massively overvalued? The question is how many of these people are out there, how much money they are possibly losing and how embittered they'll feel once they see that Mrs. Jones next door is getting twice as much for half the price.

Hmm. "Some" people? The economy's been a bubble since 2002, as has much of the rest of the world's - the result of historically low interest rates. All assets have bubbled slightly, but houses most of all, particularly here where we have no public experience of other asset classes. Buyers said "well, hey, I can afford a little more to get the house I really want", and sellers said "can you? Great, let me put the price up a bit so."

Independent wrote:

One reason for bringing forward the Budget date may be to seek an urgent decision from the EU Commission, in the form of EU approval for borrowing to cover what is expected to be an even bigger deficit next year.

Good timing.

ibis wrote:

cactus flower wrote:

A lot of the empty houses are up the hills in Leitrim.

I don't know where Fintan would have got the figure of 250,000 from. That seems crazy.

The 2006 census.

Quote :

Isn't it established now that there was a market bubble which some people fell foul of, buying homes that were massively overvalued? The question is how many of these people are out there, how much money they are possibly losing and how embittered they'll feel once they see that Mrs. Jones next door is getting twice as much for half the price.

Hmm. "Some" people? The economy's been a bubble since 2002, as has much of the rest of the world's - the result of historically low interest rates. All assets have bubbled slightly, but houses most of all, particularly here where we have no public experience of other asset classes. Buyers said "well, hey, I can afford a little more to get the house I really want", and sellers said "can you? Great, let me put the price up a bit so."

Independent wrote:

One reason for bringing forward the Budget date may be to seek an urgent decision from the EU Commission, in the form of EU approval for borrowing to cover what is expected to be an even bigger deficit next year.

Good timing.

Quote :

Fintan O'Toole, the Irish Times journalist recently asserted that there were 250,000 people in this country who are looking for some kind of house

The Census of Population said there was unmet housing need of 250,000 ???

Good timing, indeed. And then what after the next Referendum vote?

unaligned wrote:

cactus flower wrote:

Are FF a one-trick pony? Have they any concept of an economy, rather than an enclave of property owners?

Quote :

Tánaiste: 'Government will kick-start the housing market'
The Tánaiste is indicating that the Government will be taking steps in the Budget to help the ailing housing market.

The Finance Minister Brian Lenihan announced the decision to bring forward Budget 2009 to October on foot of poor exchequer figures and a rise in unemployment.

He says this will give Ireland a sound base for economic recovery.

Minister Mary Coughlan has said Minister Lenihan has met with representatives of the construction industry to discuss the issue.

"The minister spent a considerable period of time with construction people over the weekend and he will be taking into consideration many of these issues and not just for first-time buyers but for those who need to move on," she [url][/url]

This is why we need, but will never get, real lobbying regulation. The Minister for Finance, who has been notably absent from the scene for most of the last eight weeks had a cosy weekend long chat with the CIF to thrash out how difficult our lives are going to be for the next couple of years. The fact that the Tanaiste of the country is so sickeningly arrogant as to actually flaunt this as action and progress, accurately depicts the utter contempt and disregard that Fianna Fail have for ordinary people. Frontline services will be cut in areas like health and education and the working poor will be forced to shift their lives a few per cent closer to the poverty line, but sure fuck it, the property market might get a shot in the arm. We get what we deserve.

Yeh, I heard Parlon and another of his CIF buddies on RTE news earlier in the week. Talk about looking after number one.

These guys just want to offload all the unfinished new builds lying idle around the country and get their cash out. They don't give a shit how that is achieved. I'm sure the banks want their cash out too.

What chance do seven year olds needs have against banks and builders ? Slim and fuck all.

unaligned wrote:

This is why we need, but will never get, real lobbying regulation. The Minister for Finance, who has been notably absent from the scene for most of the last eight weeks had a cosy weekend long chat with the CIF to thrash out how difficult our lives are going to be for the next couple of years. The fact that the Tanaiste of the country is so sickeningly arrogant as to actually flaunt this as action and progress, accurately depicts the utter contempt and disregard that Fianna Fail have for ordinary people. Frontline services will be cut in areas like health and education and the working poor will be forced to shift their lives a few per cent closer to the poverty line, but sure fuck it, the property market might get a shot in the arm. We get what we deserve.

Do you think they are consciously after a possible 'trickle-down effect' from a building bounce that they might stimulate?

It'll be interesting to see what the budget does to the poorer alright.

Someone wrote recently (was it here) that in countries with a property bubble that burst, sticking plaster measures only prolonged the agony and prices were still way down after 10 years.

There is no inherent reason why property prices should go up. Property is at best a long term hedge against inflation. The land is a fixed value, (it only improves with off site investment nearby) but the structure deteriorates.

cactus flower wrote:

Quote :

Fintan O'Toole, the Irish Times journalist recently asserted that there were 250,000 people in this country who are looking for some kind of house

The Census of Population said there was unmet housing need of 250,000 ???

I beg your pardon - no, I took you up wrong. 250,000 was the number of empty properties. I have no idea where he got that figure - the total number of people renting in the State is only about 301,000. Suspiciously, 50,000 of them are renting from "voluntary bodies", which may well mean that the figure is simply the total number of people renting minus the weirdos who rent from voluntary bodies (and are probably therefore 'abnormal' in some way).

cactus flower wrote:

Good timing, indeed. And then what after the next Referendum vote?

We can probably get away with the request just by promising to hold another one.

ibis wrote:

cactus flower wrote:

Quote :

Fintan O'Toole, the Irish Times journalist recently asserted that there were 250,000 people in this country who are looking for some kind of house

The Census of Population said there was unmet housing need of 250,000 ???

I beg your pardon - no, I took you up wrong. 250,000 was the number of empty properties. I have no idea where he got that figure - the total number of people renting in the State is only about 301,000. Suspiciously, 50,000 of them are renting from "voluntary bodies", which may well mean that the figure is simply the total number of people renting minus the weirdos who rent from voluntary bodies (and are probably therefore 'abnormal' in some way).

cactus flower wrote:

Good timing, indeed. And then what after the next Referendum vote?

We can probably get away with the request just by promising to hold another one.

I must try and find the article. At this remove it doesn't seem to make any sense. One good thing about the present situation that no one seems to acknowledge is that there is a pool of good quality new rental accommodation that is getting cheaper to rent by the week. Rental is better for the economy as people who are renting are more inclined to move for employment/better employment reasons.

Alot of people's rent isn't up for review though so they are still paying alot of rent and will be into the future as landlords hope there will be an upturn in the next couple of years. Probably won't be but they can hope.

johnfás wrote:

Alot of people's rent isn't up for review though so they are still paying alot of rent and will be into the future as landlords hope there will be an upturn in the next couple of years. Probably won't be but they can hope.

Or move.

Very interesting statistics released today which will have a huge bearing on the success or failure of national social partnership talks - public sector wages almost 50% higher than private sector equivalent

Some more statistical confirmation of the profound slowdown we are in, service sector in contraction since February.

I was encouraged to read today that some Civil Servants had blown the whistle and contacted the OECD report team to try and get real reform. The OECD seem to have been apologetic for their efforts saying "what do you expect when you put a bunch of bureacrats together in a room".

From what I can see of the report, Ard-Taoiseach, it does not take account of pensions, holidays, sick pay, maternity and other benefits that would escalate the difference off the richter scale.