5.3bn total savings? Then what?

tlev

Okay so lets say that each and every single proposal in the Snip Nua report gets implemented (which it probably won't) but anyway for arguements sake it is. I think the figure for this year's total borrowing is 20bn euro and next year it would be a similar figure. I know this 5.3bn is a lot of money to save but in the larger scheme it seems like Ireland will still be in tens of billions in debt (if anyone has the figures, I read them in a paper I can't find ). At the same time, nothing seems to be done about actually promoting growth, creating jobs and promoting further 3rd level education to have a young and qualified workforce again. So basically what are we doing to actively get ourselves out of debt?

Mario007

tlev wrote: »

Okay so lets say that each and every single proposal in the Snip Nua report gets implemented (which it probably won't) but anyway for arguements sake it is. I think the figure for this year's total borrowing is 20bn euro and next year it would be a similar figure. I know this 5.3bn is a lot of money to save but in the larger scheme it seems like Ireland will still be in tens of billions in debt (if anyone has the figures, I read them in a paper I can't find ). At the same time, nothing seems to be done about actually promoting growth, creating jobs and promoting further 3rd level education to have a young and qualified workforce again. So basically what are we doing to actively get ourselves out of debt?

well basically we need to create employment etc, we all know that.
with regards to the debt...well we are only trying to get rid off our structural deficit which is about 10bn so we'll be doing good if the 5.3bn gets implemented. the economists say that the other part of the debt will get sorted out by international market sorting itself out.

tlev

Ah okay, so that 5.3bn is actually a pretty big saving.

ei.sdraob

we and out children will be paying for this gravy train thru increased taxes for a long time

see here for optimistic report from last year
http://www.boards.ie/vbulletin/showthread.php?t=2055632147

see here how revenue decrease of ~25% already this year
http://www.finfacts.ie/irishfinancenews/article_1016605.shtml

oh and thats 5.3billion in saving IF the an bord snip report is implemented in full, over next few months you will see compromises and deals and government not having the balls to go on a diet

all while the interest on our debt and the debt itself is rising, now thankfully we have lower than eu average debt/gdp ratio at present, but we are being loaned money at a interest way above what germany is paying since thats a reflection of the belief in the solvency of the state

Het-Field

It is possible that the defecit could sit between 18-30 billion in January 2010.

Basically, it will mean another major slice will have to be taken in December 2010, or possibly earlier.

gurramok

That structural deficit is alot higher than 10bn. Its more like 16bn. Or 18bn according to the IMF. http://uk.reuters.com/article/idUKLJ24400520090619

Its reputed to be 8-10% of the GDP by some.
http://www.belfasttelegraph.co.uk/business/opinion/view-from-dublin/no-matter-how-you-do-the-sums-this-is-a-political-nightmare-14261386.html

Which is why the 5.3bn in savings is just maybe a quarter of what is needed. There are too many on good pay in the public sector and too many working there.

Any ideas on how to make up the 13bn shortfall if the Snip is fully implemented ?

tlev

A really big cheque?

ei.sdraob

gurramok wrote: »

Any ideas on how to make up the 13bn shortfall if the Snip is fully implemented ?

1. nationalise AIB, BOI, shareholders wont like it but oh well buying shares carries risk (maybe this is not legal under some EU rule i dunno

2. sell the above and Aglo Irish, 3 of them might fetch for that ammount from some big bank which will swallow the lot, close branches and get more economies of scale, sort of like how RBS + Loyds expanded alot

i think aib + boi have a market cap of 5billion together according to google finance

hmmm on other taught this idea sounds very communistic and i cant believe i proposed it goes against everything i stand for but ive no love for banks lately

oh and scrap damned NAMA let the builders and the chancers go bust, so what that the property prices would fall, they are still way overvalued

ei.sdraob

another taught open a very large credit union that operates on national scale, or merge existing ones into one big one

every citizen can then be a shareholder

this big bank can maybe unlock alot of the money stashed away, like ssia's did, then this bank can go and sell bonds internationally, lets say they raised 1billion from the people they can go and get 10 billion at 10:1 leverage and loan this to government

oh scrap that idea sucks too, i wouldnt want to be a shareholder of an institution that lends money to our fatso government and its obese public/welfare arms

ok im out of ideas

deadhead13

The commission for taxation is due to present Brian Lenihan with it's report next week. The SBP suggest a property tax of up to 1000 euros will be recommended.

Mario007

ei.sdraob wrote: »

1. nationalise AIB, BOI, shareholders wont like it but oh well buying shares carries risk (maybe this is not legal under some EU rule i dunno

2. sell the above and Aglo Irish, 3 of them might fetch for that ammount from some big bank which will swallow the lot, close branches and get more economies of scale, sort of like how RBS + Loyds expanded alot

i think aib + boi have a market cap of 5billion together according to google finance

hmmm on other taught this idea sounds very communistic and i cant believe i proposed it goes against everything i stand for but ive no love for banks lately

oh and scrap damned NAMA let the builders and the chancers go bust, so what that the property prices would fall, they are still way overvalued

NAMA is actually a good thing if we want to get rid off our national debt in the future. dont forget in 10-15 years time it could earn us profit, so the whole 'our children will be paying for this' can pretty deceiving.

though i do share your dismay with the banks, but nationalizing is really not the way forward. as you have suggested your idea is too communistic and the price of the bank after nationalization falls.

the original question was how to raise 13bn after the report being implemented...well i suppose downward benchmarking or simple wage reduction in the public service would be a place to start(lenihan wants to start this in september). and all the other extra bonuses that spoiled us during the boom would have to go, ie still generous social welfare(even after the cut). basically if there is 21bn in the budget for public service now and 20bn in the social welfare budget you need around 9bn(this is excluding the an board snip report) to take away from both of them...but of course i suppose the capital expenditure will probably be slashed too...

heyjude

deadhead13 wrote: »

The commission for taxation is due to present Brian Lenihan with it's report next week. The SBP suggest a property tax of up to 1000 euros will be recommended.

So next week he will have a report recommending cutbacks and a cut on taxation which will presumably recommend several tax increases and new taxes.

I wonder which report will be closest to being implemented in full ? The cynic in me suspects that we'll see major tax increases a lot faster than we'll see major cutbacks. Very much a case of "Why apply the brakes, when you can get more gas !"

Boggle

wonder which report will be closest to being implemented in full ? The cynic in me suspects that we'll see major tax increases a lot faster than we'll see major cutbacks. Very much a case of "Why apply the brakes, when you can get more gas !"

Firstly, I reckon the McCarthy report was spoon fed to McCarthy for him to put his name on it so a fair amount of it will most likely be implemented to some degree.
Secondly, without going into the details, I reckon its pathetic. I mean seriously, you send me into a company which has been living off a bloated income and ask me to rationalise it and I'd be disappointed if I could not come close to 30-40% savings. Of course I would not be quivering in a corner with a bottle of scotch, terrified of the bogey man (unions).

And finally, having implemented the cuts by saying that the cost of living is falling dramatically they will straight away increase taxation.

So yeah. Anyone wanna buy some houses??? Going cheap....

ei.sdraob

Boggle wrote: »

So yeah. Anyone wanna buy some houses??? Going cheap....

no not yet cheap

still in lalaland

Boggle

no not yet cheap

still in lalaland

I know. Although an estate around here which was priced at 220k new in '04 is now selling the fully furnished showhouse for 170k. (detached houses down from 360k to 270k)
I still dont think we're anywhere near the bottom either though....