Some Good News and Bad News (Live Register and Tax Returns)

thebman

smccarrick wrote: »

In many cases they do. Look at the EUR120 I pay when I visit A&E, or the EUR100 a month I pay for prescriptions. Its not across the board- but would you go down the American route of putting an economic cost on all services supplied, and if you can't afford to pay- tough? This is not the European model. Ireland has been swinging between the Boston and Berlin models for years. Personally I would rather pay higher tax, and have a safety net for those less well off in society (with the exception of social welfare disbursements- which need serious reform)- than I would have a US based wild west approach........



What would you do? Make people pay for services as they use them, and abolish central funding of services? The country would fall apart.......

I never suggested anything like that

All I said is that it isn't the case that people pay for services at point of contact. I never said it should be like that.

It should be in some cases like when some D4 head needs her stomach pumped because she drank too much as the A&E fee won't cover the cost of the service provided in such a case yet it would be unnecessary to provide the procedure if the person had behaved responsibly.

Realistically there are people in the PS that do cover their wages and there are people that don't as the service they provide can't make money. Cuts are going to have to be made to both I believe but that is no different to people in an IT company cutting IT and sales staff salaries despite the sales people claiming they pay for their wages while the IT staff couldn't make such a claim despite creating the service the company sells.

Realistically many people could argue they cover the cost of their wages but it doesn't stop the country being over 20 billion in the red. Doing anything to reduce this is going to hurt the economy, its about finding what will hurt it least and cutting that IMO.

The_Conductor

lmimmfn wrote: »

maybe i picked it up wrong when i read the constitution( and im not trying to be smart here ), but doesnt it say that all tax revenue should go into the 1 pot, i know the levy is considered a tax but thats probably the reason?


Im 100% for this and it should have been done all along, however a lot of the PS would be up in arms as it would no longer be a guaranteed fixed pension in the same way that private sector pensions can be completely wiped by company closures or whatever.

I dont see how you would have to abolish PRSI contributory pension though? doesnt it apply to both private and public at the same rate? again i know it goes into the 1 big pot at the end currently.


surely this could fixed going forward( lol, Gift grub ) though? im only giving an example but where i work for recruits in the past few years get 0% pension contribution from the company and have to pay for all of it themselves.

I realise the younger fund the pensions for the older generation and those receiving pensions or about to retire, but they could take the hit now and at lease we would know where we stand.

What you don't realise- is that a significant portion of the private sector would also be caught out by this- it wouldn't be just the public sector.

Putting an actuarial cost on future pensions is a shocking experience (I've been involved in doing it for a few organisations). When you realise that an organisation of 1500 can have a balance sheet cost in excess of a billion associated with future pension liabilities, you get an idea of shocking it can be. Multiply this up 250 fold for the public sector- and you rapidly get an idea of the scale of the issue. However a large chunk of this is discounted through contributory OAP payments- which is similar in many cases to what people do on a personal basis in the private sector.

It is a bit mercenary to suggest wiping the slate clean- abolish *all* state intervention in the provision of superannuation benefits- and let everyone go and fund their own pensions. Buy unit shares in forestry funds, with staggered maturity dates- or however- as an asset class, it could be made work.

A big bug bear for many people in both the public and private sector is the non-contributory OAP- its almost identical to the contributory OAP. Why whack 8% of your gross income into a pension scheme for 40 years- when Bob down the road, who hasn't worked a day in his life- has the same income in retirement as you?

What do we do- get the government out of superannuation altogether- if people can't provide for themselves, they sell their family home or find another means of funding their twilight years? We're already starting on this course with nursing home charges, but the superannuation structure is still intact.

How do we dismantle what is obviously an inequitable scheme- when the vested interests have no interests in rocking the boat? If its accepted that the country is bankrupt, and people are forced to reconsider what our options are- as is the case, only it hasn't hit the public perception, perhaps a start could be made on this- but we'll still have the vested interests wailing about 'the most vunerable in society'. Hell, taxpayers are the new vunerable people in society........

The_Conductor

thebman wrote: »

I never suggested anything like that

All I said is that it isn't the case that people pay for services at point of contact. I never said it should be like that.

It should be in some cases like when some D4 head needs her stomach pumped because she drank too much as the A&E fee won't cover the cost of the service provided in such a case yet it would be unnecessary to provide the procedure if the person had behaved responsibly.

Go for it.
My sis is an A&E doc and I hear regular tales of the vast hoardes of drunks descending on A&E every Fri/Sat night from 11PM onwards. If they had to cover the costs of their own stupidity- perhaps they might think twice before taking that 20th vodka slammer.....

thebman wrote: »

Realistically there are people in the PS that do cover their wages and there are people that don't as the service they provide can't make money. Cuts are going to have to be made to both I believe but that is no different to people in an IT company cutting IT and sales staff salaries despite the sales people claiming they pay for their wages while the IT staff couldn't make such a claim despite creating the service the company sells.

And it happening in both the public and private sectors. The big difference is that its the experienced staff who are being let go (through enforced early retirements) in the public sector- while the private sector are holding onto a core staff who are damn good at their jobs. People don't realise how expertise is being destroyed in the public sector- it will hit home in the future- but at the moment, all that matters is the paybill.....

thebman wrote: »

Realistically many people could argue they cover the cost of their wages but it doesn't stop the country being over 20 billion in the red. Doing anything to reduce this is going to hurt the economy, its about finding what will hurt it least and cutting that IMO.

There are many options- but having a system where everyone sits around a table and tries to come to a concensus is a load of bollox. We need someone to make hard decisions and tell have the guts to stand up to folk and inform them of the hard medicine they are to imbibe. Concensus is a dead- it worked while we had money- we most certainly don't any longer.

RealityCheck

Regarding the the levelling off of the jobless figures you wonder have we reached the bottom or are we just in the eye of the storm.
While encouraging, I feel that the live register will start rise again in the new year as I feel some sectors are not holding together well at all.

Construction is still contracting with many major jobs finishing up and the capital budget being slashed by a billion. Also the number of house units being built in 2010 is set to drop to from 17000 to 10000 from this year. A recent report has shown that construction output is to contract by 25% in 2010 on top of the contraction to date.

Also another sector that is still in a bad way is retail. With many companies barely keeping it together this year, any further weakness may cause many failures and job losses come spring 2010.

The effects of the budget are as of yet an unknown, it may dampen down consumerism even further causing further stress on the services sector, particularly retail as mentioned above.

Overall things are looking better and we can cling to the hope that it has bottomed out. However, I would'nt be counting my chickens yet .

lmimmfn

smccarrick wrote: »

What you don't realise- is that a significant portion of the private sector would also be caught out by this- it wouldn't be just the public sector.

Putting an actuarial cost on future pensions is a shocking experience (I've been involved in doing it for a few organisations). When you realise that an organisation of 1500 can have a balance sheet cost in excess of a billion associated with future pension liabilities, you get an idea of shocking it can be. Multiply this up 250 fold for the public sector- and you rapidly get an idea of the scale of the issue. However a large chunk of this is discounted through contributory OAP payments- which is similar in many cases to what people do on a personal basis in the private sector.

no i do realise that the cost is astronomical, the UK has the same issue, they could change the retirement age to reduce the burden though.

smccarrick wrote: »

It is a bit mercenary to suggest wiping the slate clean- abolish *all* state intervention in the provision of superannuation benefits- and let everyone go and fund their own pensions. Buy unit shares in forestry funds, with staggered maturity dates- or however- as an asset class, it could be made work.

but we do need something like this, its been common practice for the past several years in the private sector, dont get me wrong, its crap for those that take those contracts however at lease excluding the current was thats needed at least the problem is sorted when the new recruits reach retirement age( even if the government only contributed 5-7% at least its a fixed cose that can be easily calculated rather than the current mess )

smccarrick wrote: »

A big bug bear for many people in both the public and private sector is the non-contributory OAP- its almost identical to the contributory OAP. Why whack 8% of your gross income into a pension scheme for 40 years- when Bob down the road, who hasn't worked a day in his life- has the same income in retirement as you?

i dont get you?, you get( are entitled to ) the state pension like Bob down the road but on top of that you get your contributory pension also.

smccarrick wrote: »

What do we do- get the government out of superannuation altogether- if people can't provide for themselves, they sell their family home or find another means of funding their twilight years? We're already starting on this course with nursing home charges, but the superannuation structure is still intact.

A better solution would be for the pensioner to live in their home until the inevitable, then if there are family members they can sell but the government gets their cut from that whether it be for nursing homes or state pension cost that wasnt contributed to via PRSI or whatever

smccarrick wrote: »

How do we dismantle what is obviously an inequitable scheme- when the vested interests have no interests in rocking the boat? If its accepted that the country is bankrupt, and people are forced to reconsider what our options are- as is the case, only it hasn't hit the public perception, perhaps a start could be made on this- but we'll still have the vested interests wailing about 'the most vunerable in society'. Hell, taxpayers are the new vunerable people in society........

Exactly, im a bit fed up with the bleeding heart 'society vulnerables' however this is the absolute best time to sort this, again though the vested interests would knock this down at the earliest chance.

Maybe the vested interests should be removed from the whole scheme, disassociate the TD's from the private sector, it sounds a bit mad but make their pensions private, treat expenses like in the private sector, no proof/receipt=no cash. And i dont mean that to knock the public sector, i just mean theres a direct conflict of interest between TD's and state reform.

smccarrick wrote: »

Go for it.
My sis is an A&E doc and I hear regular tales of the vast hoardes of drunks descending on A&E every Fri/Sat night from 11PM onwards. If they had to cover the costs of their own stupidity- perhaps they might think twice before taking that 20th vodka slammer.....

Youve hit the nail on the head, there should be 50euro cost for going to A&E no matter if youre on the dole or working( subtract it from the next weeks dole or remove it from tax credits for workers ), in fact even if you're on welfare there should be a penalty for going to the doctor, even if its only 1 or 2 euro.

nesf

P. Breathnach wrote: »

That depends on how you count things. Health and Education, for example, are two of the biggest budget expenditure heads. If they were not provided for out of the public purse, then they would be private sector activities and would be counted as transactions involving payment for value.

Ish. There wouldn't be a guaranteed drain of money out of the private sector and into the public sector if these were private industries and these sectors wouldn't automatically create Budget problems for the country when the country went into a downward cycle. There's also issues with how staff are paid, how pensions work etc that make public services very different to private ones.

thebman

RealityCheck wrote: »

Regarding the the levelling off of the jobless figures you wonder have we reached the bottom or are we just in the eye of the storm.
While encouraging, I feel that the live register will start rise again in the new year as I feel some sectors are not holding together well at all.

Construction is still contracting with many major jobs finishing up and the capital budget being slashed by a billion. Also the number of house units being built in 2010 is set to drop to from 17000 to 10000 from this year. A recent report has shown that construction output is to contract by 25% in 2010 on top of the contraction to date.

Also another sector that is still in a bad way is retail. With many companies barely keeping it together this year, any further weakness may cause many failures and job losses come spring 2010.

The effects of the budget are as of yet an unknown, it may dampen down consumerism even further causing further stress on the services sector, particularly retail as mentioned above.

Overall things are looking better and we can cling to the hope that it has bottomed out. However, I would'nt be counting my chickens yet .

If things level out, retail will reach a bottom soon after IMO as people spend what they an afford and if it looks like it is bottoming out, consumer confidence will increase and spending will increase and retail will likely jump back fast too not to previous levels (probably ever) but at least less bad.

Construction is screwed for IMO at least 5 years and probably more. I think the actual companies with empty developments are more screwed than the workers even as at least some of the workers will get employment in the future but many of these companies will go under as even if they have assets they won't meet future energy standards. Some of these will be in NAMA (some being unknown) and that is why IMO, NAMA won't work effectively and we are going to be left with another bill to pay. Construction workers can get jobs doing up existing homes to improve energy ratings and reducing energy bills for the owners. Better energy ratings will also increase value in future so this is where we can lessen the impact on contruction workers IMO. Then you have infrastructure projects which we need to get going badly and we can retrain construction workers to do these if they don't have the existing skill set.

In any case any change of an improvement or bottoming out depends on this next budget and I have little faith that the right areas/people will be targeted.

ghost_ie

Can someone explain to me how cuts in either the public or private sector pay or in social welfare can help the economy? This is probably a very simplistic way of looking at things but it seems to me that if you cut people's income the tax take from income tax is reduced, as are the receipts for VAT as people will have less money to spend.

thebman

ghost_ie wrote: »

Can someone explain to me how cuts in either the public or private sector pay or in social welfare can help the economy? This is probably a very simplistic way of looking at things but it seems to me that if you cut people's income the tax take from income tax is reduced, as are the receipts for VAT as people will have less money to spend.

Yes but much of the money was coming from unsustainable debt borrowing by people.

This has now stopped and we are in real world mode where we are living way beyond our means as we don't have that money.

That means private companies don't have as much coming in and have to cut costs including wages in many cases and the government don't have the money to pay wages or keep taxes at boom low levels.

Its not about saving the economy, its about not defaulting on our national debt and getting spending in all sectors to sustainable levels. The economy we had was unsustainable, we need to work towards developing a stable, sustainable economy. However at the same time, government expenditure must fall as nobody in their right mind would continue to lending to the government at current levels.

nesf

ghost_ie wrote: »

Can someone explain to me how cuts in either the public or private sector pay or in social welfare can help the economy? This is probably a very simplistic way of looking at things but it seems to me that if you cut people's income the tax take from income tax is reduced, as are the receipts for VAT as people will have less money to spend.

The issue is that we have to borrow more than 20 billion to pay the wages in the public sector and social welfare this year if we don't do something about this. This is about half what the total tax take this year will be so it's huge! The interest payments on borrowing this money will just make the deficit larger again next year because we'll have to borrow the same again just to pay the public sector and social welfare. The deficit will only begin to close on its own when the economy picks up again and tax take increases. This isn't going to happen this year or next year from the looks of things and at best we'll see a return in 2011 to economic growth but even that could be optimistic.

If not controlled borrowing spins out of control and can and will bankrupt a country.

NewDubliner

nesf wrote: »

The issue is that we have to borrow more than 20 billion to pay the wages in the public sector and social welfare this year if we don't do something about this. This is about half what the total tax take this year will be so it's huge!

Shouldn't we look at all borrowing?

nesf

NewDubliner wrote: »

Shouldn't we look at all borrowing?

We will have to borrow the majority of the deficit. The Government are looking for 4 billion in cuts, the deficit will be over 22 billion. If anything the Government are erring on the side of small cuts this year given the scope of the problem.

RealityCheck

ghost_ie wrote: »

Can someone explain to me how cuts in either the public or private sector pay or in social welfare can help the economy? This is probably a very simplistic way of looking at things but it seems to me that if you cut people's income the tax take from income tax is reduced, as are the receipts for VAT as people will have less money to spend.

But do we have a choice ?

Let me tell you, should any Irish government decide to postpone the adjustment in favour of wreckless borrowing you would quickly see fewer and fewer willing to lend to us. Interest would rocket and we would inevitably default. The only reason people are willing to lend to us is based on cutting our expenditure in the short to medium term. Should we renage on our commitments the international bondmarkets (and the ECB) will quickly pull the plug. So there is no choice.

There is one positive regarding reducing peoples wages. Ireland would become more competitive and business friendly. This will encourage economic growth over the medium to long term and overall revenue levels will increase again as employment increases.

All in all loads of pain in the next few years, but worthwile pain should we turn the country around .

RealityCheck

nesf wrote: »

We will have to borrow the majority of the deficit. The Government are looking for 4 billion in cuts, the deficit will be over 22 billion. If anything the Government are erring on the side of small cuts this year given the scope of the problem.

The best case scenario is we stabilise the deficit at about 12% of GDP.

Worst case, deflationary spiral effect causing a slight increase.

Leaving it as is, it will spiral out of control. It could reach 15% of GDP in which case we would be breaking our own records .

nesf

RealityCheck wrote: »

The best case scenario is we stabilise the deficit at about 12% of GDP.

Worst case, deflationary spiral effect causing a slight increase.

Leaving it as is, it will spiral out of control. It could reach 15% of GDP in which case we would be breaking our own records .

Yeah, 4 billion being enough is optimistic but honestly I'd doubt the Government could cut more and manage to stay in office.

No easy way out of this unfortunately.

The_Conductor

nesf wrote: »

We will have to borrow the majority of the deficit. The Government are looking for 4 billion in cuts, the deficit will be over 22 billion. If anything the Government are erring on the side of small cuts this year given the scope of the problem.

Our exchequer borrowing requirement for 2009 is in fact now projected to be marginally shy of 28 billion- which represents almost 60% of total expenditure.

The 4 billion in cuts proposed for the December budget is the thin end of the wedge- with a further 5 billion planned for the 2011 budget and another 4 billion the year after. If we are having this degree of ructions over the initial 4 billion- what the hell is going to happen next year and the following year?

Quite simply- the government has completely and utterly lost the run of itself and doesn't have the guts to stand up and inform the people of the harsh medicine it needs to take. Instead- its going to continue the never ending concensus approach- of debating in a never ending fashion with the 'social partners' how to achieve these cuts.....

Irish politics is almost uniquely in the modern world, almost feudal in nature- and based on parochial politics. Thus TDs, Ministers and councillors- do not support Ireland Inc- they support Bog na Boille- and they will fight tooth and nail for any largess they can deliver to their immediate constituents- with no thought of whether its for the greater good of the country or not. How else do we end up with gombeens like Jackie Healy Rae wielding such influence?

gurramok

Ahead of the live register figures this morning, Fas have said the following about job losses 'slowing down'
http://www.rte.ie/news/2009/1104/economy.html

Fas wrote:

According to FÁS in the three months from July to September, unemployment rose at its slowest rate in two years.

However, it puts this decline down to increased emigration and a lower number of young people in the labour force because many are choosing to extend their studies.

We still need those employement numbers as I don't trust govt spin on the figures.

30% of people in their 20's unemployed, 40% of the late teens, it is shocking on the young.

The_Conductor

And the largest single group are males aged 15 to 24.......

nesf

gurramok wrote: »

30% of people in their 20's unemployed, 40% of the late teens, it is shocking on the young.

It's not surprising, it's exactly how high unemployment works. It hits those with low levels of experience or those trying to enter the workforce hardest. It was the same in the 80s, the worst off unemployment wise were the young for the same reasons.

The older workers tend to have seniority and other things protecting them from the worst of it.

Firefox10

lmimmfn wrote: »

Im sure im not the only one to took the total of the tax increase in April on my weekly expenditure.

The more we are taxed the less we will spend. Of course there's a point whereby we can't cut any more corners but at that point you'd nearly be as well off on the dole( with the current welfare rates ).

Its great that the live register is down though and i have noticed we're not listening to 200 jobs going every day or two on the news.

Even though the job losses in my company were announced last January we let go 300 people here last friday and I myself will be heading for the dole queue in December. Alot of those job losses in companies announced over the last year have yet to be added to the live register numbers.

Dannyboy83

smccarrick wrote: »

The 4 billion in cuts proposed for the December budget is the thin end of the wedge- with a further 5 billion planned for the 2011 budget and another 4 billion the year after. If we are having this degree of ructions over the initial 4 billion- what the hell is going to happen next year and the following year?

I wasn't even ware of the 2011/2012 bit tbh. Is that correct?

The_Conductor

Dannyboy83 wrote: »

I wasn't even ware of the 2011/2012 bit tbh. Is that correct?

Certainly- its what we've agreed with the EU Commission (in exchange for allowing us to run rough-shod over EURO eligibility rules- running a deficit of 12-14% of GDP this year- and not a lot better next year........)

We are to cut 4 billion from the 2010 budget. A further 5 billion from the 2011 budget and a further 4 billion from the 2012 budget.........

Its amazing this point is not being driven home in the media.........

lmimmfn

Firefox10 wrote: »

Even though the job losses in my company were announced last January we let go 300 people here last friday and I myself will be heading for the dole queue in December. Alot of those job losses in companies announced over the last year have yet to be added to the live register numbers.

thats true and you probably cant sign up if you get redundancy for a few months?

smccarrick wrote: »

Certainly- its what we've agreed with the EU Commission (in exchange for allowing us to run rough-shod over EURO eligibility rules- running a deficit of 12-14% of GDP this year- and not a lot better next year........)

We are to cut 4 billion from the 2010 budget. A further 5 billion from the 2011 budget and a further 4 billion from the 2012 budget.........

Its amazing this point is not being driven home in the media.........

Yeah i read this a good while ago and it was in the Times on sunday again, i dont think people realise the reality we're facing.

Just think whatever tax increases there were in April only covered 3 billion and with this 2 billion deficit we now have over 5 times that to make up in the next 3-4 years and the PS cutbacks only make a tiny dent in that total, plus you have the direct impact on spending by taxing more meaning less tax/vat intake on services/products which also hits employment.

Boskowski

smccarrick wrote: »

Slightly OT- but did anyone hear Brian Lenihan being interviewed on RTE? He blamed the reduction in tax receipts on unexpected lower salaries in both the public and private sectors. Apparently- he didn't cop that everyone is getting paid less.........

This guy...Lenihan...I don't know. I give him marks for trying but its just not good enough.

Do you remember the start of the year when we had to listen on and on again how soooo unexpectedly Q4/08 tax take was such and such percent below same quarter previous year? And yet they based the tax take for the next quarter on the same fairytale figures rather than on the decline experienced in the quarter they were just moaning about. Same thing then the next quarter.

If it wasn't for the sad fact that these people are actually running the country we live in you'd laugh about it.

I have to stop at this stage to listen to the radio or buy the paper because in the long run it would simply drive me insane. I focus on football these days. Ignorance is bliss.

thebman

I think what annoys me most about the forecast is it just goes as things are now. It doesn't even seem to attempt to take into account what is likely to happen in the future.

Compare it to Ryanairs recent announcements about how they are doing and how they think they will do in next quarter.

Why can't our government make any sort of predications about the future with any sort of accuracy, they are always miles out and always overly optimistic from what I can see.

nesf

realcam wrote: »

This guy...Lenihan...I don't know. I give him marks for trying but its just not good enough.

Do you remember the start of the year when we had to listen on and on again how soooo unexpectedly Q4/08 tax take was such and such percent below same quarter previous year? And yet they based the tax take for the next quarter on the same fairytale figures rather than on the decline experienced in the quarter they were just moaning about. Same thing then the next quarter.

If it wasn't for the sad fact that these people are actually running the country we live in you'd laugh about it.

I have to stop at this stage to listen to the radio or buy the paper because in the long run it would simply drive me insane. I focus on football these days. Ignorance is bliss.

To be honest with you, any estimates of tax takes for this year were going to be educated guesses at best. No one knew the size, scope and depth of the reduction in wages that would occur in the private sector with any accuracy.

P. Breathnach

nesf wrote: »

To be honest with you, any estimates of tax takes for this year were going to be educated guesses at best. No one knew the size, scope and depth of the reduction in wages that would occur in the private sector with any accuracy.

We still don't know.

RealityCheck

nesf wrote: »

To be honest with you, any estimates of tax takes for this year were going to be educated guesses at best. No one knew the size, scope and depth of the reduction in wages that would occur in the private sector with any accuracy.

It was very easy to determine what was happening, just very very difficult to quantify. However, the DOF have never covered themselves in glory for estimates even in the good times. Not too surprising that they are and have been miles out on forecasts. Brian Lenihan is often described as having little faith in much of the figures coming out of his own department.

The_Conductor

nesf wrote: »

To be honest with you, any estimates of tax takes for this year were going to be educated guesses at best. No one knew the size, scope and depth of the reduction in wages that would occur in the private sector with any accuracy.

According to the CSO- there is *not* a large fall in the average gross earnings in either the public or the private sector, thus far. The big fall is in NET earnings- with an increased income levy, the pensions levy in the public sector etc. Add into this- a large number of households used to having 2 incomes coming in- now down to one- and you have a better grasp of where we are at. The reduction in NET takehome pay- means people have less money to spend- which means they in turn feel poorer- and are less likely to spend, even if they can afford to do so. The Irish rate of savings increased by the largest amount in Europe in the 6 months to the end of June (I don't have more recent figures).

People are terrified to spend- which is dragging down VAT, customs and excise- and in turn putting more people out of work........

People have been taxed to the point- where there is little incentive to do anymore than their core hours, and little incentive to spend- as they don't know what tomorrow is going to bring.......

NewDubliner

smccarrick wrote: »

People are terrified to spend- which is dragging down VAT, customs and excise- and in turn putting more people out of work........

They could spend the money on home improvements, but that'd mean they'd have to pay more property tax.