Leninhan Confirms he is inept and not suitable to hold the Finace ministry

Johnboy Mac

stepbar wrote: »

As far as I can see the increase in VAT was an easy mechanism on the Govs part to increase Tax. The opposite happened as people just went up the north to buy goods. More and more as the days go by, I think we should opt out of the euro and join the Sterling currency. Our economies are so intertwined that it would make sence on one level but perhaps on another level not so much (thinking about Iceland here).

So, why did we have the Punt and next the Euro?

nesf

stepbar wrote: »

As far as I can see the increase in VAT was an easy mechanism on the Govs part to increase Tax. The opposite happened as people just went up the north to buy goods. More and more as the days go by, I think we should opt out of the euro and join the Sterling currency. Our economies are so intertwined that it would make sence on one level but perhaps on another level not so much (thinking about Iceland here).

Honestly, people going North to shop had a lot more to do with the Euro/Sterling exchange rate than a 0.5% increase in VAT.

stepbar

Johnboy Mac wrote: »

So, why did have the Punt and next the Euro?

Because we were part of the EU

nesf wrote: »

Honestly, people going North to shop had a lot more to do with the Euro/Sterling exchange rate than a 0.5% increase in VAT.

Yep I agree, but the increase in ROI VAT (and decrease in Uk VAT levels) did not help TBH.

nesf

stepbar wrote: »

Yep I agree, but the increase in ROI VAT (and decrease in Uk VAT levels) did not help TBH.

Yes, but relatively few people will travel for a 5% discount. The present discount on buying Sterling goods up North is far in excess of this. Not that I agreed with a 0.5% increase in VAT or anything, in a recession they're better off targeting income with taxation in order to capture more money. That said, it was hard to see the depth and severity of this recession back when he made this VAT decision. 20/20 hindsight and all that.

Johnboy Mac

nesf wrote: »

Honestly, people going North to shop had a lot more to do with the Euro/Sterling exchange rate than a 0.5% increase in VAT.

+1

Going North to shop is a bit of a red herring, we've been shopping in the North for years when it was advantageous to do so and vise versa.

There is nothing incorrect politically or otherwise in doing so. We're in the E.C. for starters and it's good and proper to trade with our fellow Irishmen.

I noticed nobody mentioned this when millions of holidays are take abroad each year or when all the holiday homes were being purchased abroad.

The subject of shopping in North should be dropped no matter what lightweight Coughlan says - silly woman.

stepbar

nesf wrote: »

Yes, but relatively few people will travel for a 5% discount. The present discount on buying Sterling goods up North is far in excess of this. Not that I agreed with a 0.5% increase in VAT or anything, in a recession they're better off targeting income with taxation in order to capture more money. That said, it was hard to see the depth and severity of this recession back when he made this VAT decision. 20/20 hindsight and all that.

But in reality the discount was 3% as VAT rates went up by 0.5% here and down by 2.5% in the north. Coupled with the swing in exchange rates meant that there was a sale to be had in most northern towns.

nesf

stepbar wrote: »

But in reality the discount was 3% as VAT rates went up by 0.5% here and down by 2.5% in the north. Coupled with the swing in exchange rates meant that there was a sale to be had in most northern towns.

Yeah but you pay a fee on converting Euro to Sterling and there's the extra cost of driving to the North involved which was why I was saying you'd need more than a 5% discount before most people would shop in the North. If you're in a border county that's not a big deal but to draw large numbers of people you're talking about (ballpark) 10-15% at least of a discount before enough people will start doing it to severely effect things.

As is, as far as I know it's bigger than a 10% discount for people going North but being as far to the South as I am I obviously haven't gone up do my grocery shopping.

Johnboy Mac

Actually what should be discussed is why 'brains' Lenihan increased VAT and the UK decreased VAT. Talk about complete opposing management decisions. It really makes one wonder.

Johnboy Mac

stepbar wrote: »

Because we were part of the EU

Strange answer for somebody suggesting we should join Sterling. Why did we have the Punt?

dresden8

Johnboy Mac wrote: »

Actually what should be discussed is why 'brains' Lenihan increased VAT and the UK decreased VAT. Talk about complete opposing management decisions. It really makes one wonder.

They didn't want to be the party to raise income taxes, they wanted to hold onto the "low tax economy" thing.

The only problem is they were blinded by their political interests and failed at every step of the way to see what was blindingly obvious to the rest of us, and now they, and unfortunately us are backed into a corner. They're going to have to cut expenditure, services, social welfare and raise taxes all in one go.

Thoroughly incompetent.

ardmacha

The 0.5% on VAT made little impact on cross border trade. It was dwarfed by the 2.5% reduction in the North. Sterling changes meant that prices changed even if the VAT was the same, banks give you the new Sterling rate the next day, shops take months to reflect it in their prices, if they ever do. The problem is that people are buying cheaper groceries etc in the North which have zero VAT, because of uncompetitive pricing in the South. Now a 0.5% VAT increase wasn't going to help, some initiative is needed to promote competition. In fact Lenihan probably thought that the 0.5% would largely be absorbed by shops etc with the way things were going, and he may have been largely right, but the UK cut banjaxed things.

John_C

He should find an excuse to cut the speed limit on the M1 to 100kph. That would have a much bigger effect that the half a percent VAT increase.

Johnboy Mac

John_C wrote: »

He should find an excuse to cut the speed limit on the M1 to 100kph. That would have a much bigger effect that the half a percent VAT increase.

Not good thinking as our mpg would increase, thus less fuel purchased

zootroid

Johnboy Mac wrote: »

Actually what should be discussed is why 'brains' Lenihan increased VAT and the UK decreased VAT. Talk about complete opposing management decisions. It really makes one wonder.

I seem to recall a German minister rubbishing the UK's decision to reduce VAT, saying it would not stimulate demand. The point he made was that any reduction in VAT will not have a large enough effect. So while I think the government made a mess of the economy, I don't think increasing VAT by half a per cent made the slightest difference. The fall in sterling is the problem.

Butterbox

Regardless of the impact of the VAT differential, the UK drop in VAT was well flagged and the Irish government still went ahead with an increase. Incompetence is never more clearly demonstrated than when doing nothing would have been better.

P. Breathnach

Butterbox wrote: »

Regardless of the impact of the VAT differential, the UK drop in VAT was well flagged and the Irish government still went ahead with an increase. Incompetence is never more clearly demonstrated than when doing nothing would have been better.

So even if it made no difference, it was wrong?

This should be a non-story. The impact of the VAT change on cross-border shopping is infinitesimal. The loss of revenue is real, but would have happened anyway.

But it was written up by a journalist who left FF after failing to get a nomination to stand for them, and who now plans to run as an independent. He did not make notes of what Lenihan said, but represented certain words as being quotations. As journalism, it stinks.

The worrying thing is how many people believe this rubbish.

Darsad

P. Breathnach wrote: »

But it was written up by a journalist who left FF after failing to get a nomination to stand for them, and who now plans to run as an independent. He did not make notes of what Lenihan said, but represented certain words as being quotations. As journalism, it stinks.

The worrying thing is how many people believe this rubbish.

Thats maybe but it clearly sent out the wrong message and pushed people Northwards . We can have no confidence in Lenihan to deliver anything other than insular ill thought out and very poorly delivered floundering speeches ( both devised and written for him by his dept officials ) Leadership comes from the top and our trio are not leadership material by any stretch of the imagination.

P. Breathnach

Darsad wrote: »

Thats maybe but it clearly sent out the wrong message and pushed people Northwards ...

Frankly, I think that is rubbish. I have read and heard a great deal about people's motivations for shopping in NI. I have yet to hear anybody suggest that a margin of about 0.4% in prices was decisive -- except in discussions like this one, where people are seeking to make political points rather than economic, business, or consumer ones.

Darsad

P. Breathnach wrote: »

Frankly, I think that is rubbish. I have read and heard a great deal about people's motivations for shopping in NI. I have yet to hear anybody suggest that a margin of about 0.4% in prices was decisive -- except in discussions like this one, where people are seeking to make political points rather than economic, business, or consumer ones.

Im sorry but from what i have seen and heard on the ground the Vat rate was a very big factor in peoples decision to head North. Not everybody sits down and analysis or crunches the figures they just see one vat rate reducing and the other increasing and when you read and hear 6.5 percentage points difference in Vat rates you will automatically head for the cheaper region which admittedly is helped considerably by the curriency differential and the higher costs in the South.
They got it wrong as with many other things and they have as is their way fudged around an admittance of the fact. Will the others do any better I doubt it but perhaps a change at the top from within FF would make a difference.

Dannyboy83

I'm on the fence here.

I agree with P.Breathnach's point that Vat wouldn't be a be all/end all issue, but on the other hand I think this is just more of the same blatant hypocrisy from Fianna Fail, and the main reasons that people are going North to shop is as a result of this very same hypocrisy and failure to act/acting to fail.

P. Breathnach

Darsad wrote: »

Im sorry but from what i have seen and heard on the ground the Vat rate was a very big factor in peoples decision to head North. Not everybody sits down and analysis or crunches the figures they just see one vat rate reducing and the other increasing and when you read and hear 6.5 percentage points difference in Vat rates you will automatically head for the cheaper region which admittedly is helped considerably by the curriency differential and the higher costs in the South.

As I said: people seeking to make political points, just as you are doing here. The increase in VAT was 0.5%. That was what you referred to in your opening post in this discussion, and what you suggested was Lenihan's mistake. Now you jump to making a case on difference in VAT rates between the UK and Ireland, which is a different thing.

Let's get real: not that many people would shop in Newry to save about 5%.

meditraitor

Darsad wrote: »

Lenihan has confirmed that the increase in VAT was a mistake and has cost the exchequer up to € 700 Million. Well i am sorry but this kind of acceptance or apology is simply not good enough and he should resign.
A primary school child could see what the increase in VAT would do when we have such an open, accessable and cheaper market up the road in NI. We will all now have to be burdened with extra tax in the April budget which may have been avoided had he and his dept adopted policies that would have allowed our retailers to compete with NI .

You are very adament that everyone and their mother could see that a 6.5% (or 30% less in real money) reduction in VAT was what was needed to stimulate the Irish economy.


Can you step back for one minute and think........

What are the VAT receipts for the last year and is a 30% reduction in those receipts the answer to our present problems.

Figures is what Im after...........