Predictions Thread

nesf

Following Long Onion's suggestion, a predictions thread:

You may predict on as many or as little headings as you'd like and the closest to reality under each heading will get a special mention on this thread. Anyone changing their predictions after the results have been announced will be mocked ruthlessly!

Enjoy!

nesf

PS Wage Cuts:

5% average cut to be implemented, tilted heavily towards high earners probably focusing especially on the 100K+ earners.


Child Welfare:

10% cut + Payment for low income families.


Social Welfare:

Unemployment benefit to be cut by 4%, Pensions left untouched.

cson

Agree with all of the above.

Carbon Tax to be implemented.

This is a shot in the dark suggestion and a highly unlikely retreat from last year, but I fancy Lenihan to wipe out last years VAT increase and reduce it maybe a percentage point further. I think they're coming to terms with the competitive issue with it vis a vis NI shopping. It'll be made up for in other area's for sure though - the old reliables alcohol, cigarettes and fuel.

Introduction of a 3rd Tax Band for > €100,000 p.a. earners. The public are baying for blood and I've a feeling Lenihan will send the high earners to the guillotine at their behest.

cson

Edit; Agree that nothing will happen to the pensions or pensioners. The sting of the OAP whip was felt by all and sundry in Government when they attempted to sycthe some of the OAPs benefits.

Senna

Cigarettes up 10 cent
Motor tax increase 5% average (banded)
SW for under 23's cut to €150
SW for rest cut by 4%
Childrens allowance means tested and cut.

BOHSBOHS

ps paycut 7% average .... range from 5% -20%
child benefit 20% cut
dole 4% cut

this years "sneakylikethehealthlevyhike" award goes to
reduction of personal tax credits and possible bringing down of the standard rate band)

seamus

nesf wrote: »

PS Wage Cuts:
5% average cut to be implemented, tilted heavily towards high earners probably focusing especially on the 100K+ earners.

Child Welfare:
10% cut + Payment for low income families.

Social Welfare:
Unemployment benefit to be cut by 4%, Pensions left untouched.

I'd agree with these.

I'd say fuel will go up - home heating oil, gas, petrol, diesel, everything. By about 5%.
I'm iffy on cigarettes and alcohol. Duty income is way down, dropping the duty on these would generate *more* for the exchequer, but I don't know if Lenny is clever enough to see this.

Tax credits will definitely drop. They'll probably drop the single person and married persons' tax credits by 10%. Meaning that anyone earning over roughly €17k will have to pay tax.

They might tweak stamp duty to try get the housing market going. Silly move, but you never know.

I have a suspicion that VAT will drop by up to 2%, but no-one seems to be talking about that.

ei.sdraob

Im sure petrol would be hit hard, simply to make people traveling to North think twice :eek:

im with @seamus VAT will be cut, raising it last year didnt help at all

a reduction of taxcredits, like rent credit etc to drag more people into the net

ghosttown

Most of the above are in agreement, just a few % differences, and I agree with them all, PS above €100K to get a 7% cut, VAT cut (maybe to 19.5%), no change on cigs and alcohol.
Will be a few potentials from left field, they need to show some imaginative thinking.
Maybe the 'text tax' will be back - 0.5c or 1c per text (I see Paddy Power are predicting 50million text in the 12 hours of new years eve !!!)
Also, under the 'aren't we good guys' heading, I expect they will annouce something formal in flood relief monies for those whose houses are ruined.

Long Onion

Taxation:

Carbon Tax to be introduced which will exclude electricity, increases in solid fuel will be offset by an increase in allowances for those on welfare/OAP's.

Tax free allowances to be narrowed to bring more workers into the tax net - possible reduction in bands of circa €2000.

PRSI celing to be further lifted

Minimum wage to be lowered

VAT to be left on hold

Pension tax reliefs to be harmonisied at 33%, changes to taxation treatment of lump sums - reduction to 20% of fund from 25%.

Public Sector:

Pay cuts for those who are earning over 28K - tiered ranging from 5% up to 20%. Changes to existing pension systems for existing TD's and ministers.

Welfare:

Job seekers allowance to be reduced to €166 per week, all other benefits (including disability pension) to be reduced by 6%, rent allowance to be capped at a lower amount.

Childrens benefit to be cut by 15% across the board.

Misc:

Cigarettes, to increase by 30c per packet (I think the Government will pre-empt the outcome of the Commissions decision on minimum price legislation)

Alcohol - to be left unchanged (FF backbenchers)

Fuel excise to be left unchanged in light of carbon tax.

ucdperson

Im sure petrol would be hit hard, simply to make people traveling to North think twice

This is a crazy suggestion, if petrol goes up too much then people will go to the North to get it and a large amount of revenue will disappear.

What is needed is something on diesel, whether you call it Excise or Carbon tax, as it is substantially cheaper in Republic.

ei.sdraob

ucdperson wrote: »

This is a crazy suggestion,

would you put it past our government?

Kensington

TAX:
Increase in the Income Levy from 2%, 4% and 6% to 3%, 6% and 9% respectively.
Apply Income Levy to ALL employee income, including those on minimum wage, no exceptions or exclusions.
Introduction of a 1c text tax.
Introduction of a third income tax band for wages grossing €75,000 and over.
0.5% drop in rate of VAT.
Lower PRSI cut-off and reduce tax credits to pull more workers into taxable income band.

WAGES:
Minimum wage dropped back to €7.65.
5% across the board cut to all public sector.
Further cuts based on a sliding scale, between 3%-15% for higher earners, dependent on gross income level.

WELFARE:
10% cut to child benefit - means test all child benefit.
5% cut to social welfare. Means tested for under-25's when living at home.

K-9

PS Wage Cuts:

5% average cut with up to 15% cuts for Department heads and higher level officers. 0% below 28/30k. 5% between 30 and 50k, 7% between 50 and 75k, 10% or more above.

Child Benefit:

10% cut with help for SW recipients. Can see an announcement on either taxing it or means testing it, to start in 011.


Social Welfare:

Unemployment benefit to be cut by 5%, Pensions left untouched.
The usual sneaky changes to rules on claims.

SW rate of €100 for under 25's.

TAX

The tax levies will be incorporated into the tax rates. Can see a new low rate of 5% on €15-18,000, 22% rate, 44% rate and 47% rate above 100k.

PRSI ceiling to be abolished.

From watching Michael Martin last night on the week in politics, I've a suspicion VAT maybe cut to 20%, cut in excise duties on booze but cigarettes to get a 10/20c hit.

Change to pension deduction. Limit of 30% tax relief on pension payments.

Sleepy

Prediction: It won't make a blind bit of difference.

The tax take will be over-estimated by an almost identical figure to the savings made.

Nody

Taking Long Onion's post as starting point these are my predictions:

Taxation:

Carbon Tax to be introduced at 5% average on gas, 7% on diesel and oil for houses. A grant up to 50% cost capped at 2k EUR for converting from oil pan to something (most likely pellets or similar). Also include a exception for farmers trucks or something along those lines.

Tax free allowances to be narrowed to bring more workers into the tax net – new limit at 17.500 EUR

PRSI celing to be further lifted

Minimum wage untouched

Lower wage for trainees 2nd and 3rd year in FAS apprenticeship

1c text tax

Motor tax up 3% to 8% (carbon tax style on engine size and pollution level)

Pension tax reliefs to be harmonised changes to taxation treatment of lump sums - reduction to 15% of fund from 25%.

Public Sector:

Pay cut across the board of 3% scaling at the higher end to 10% all before tax for PS

Ministers will have a modest reduction of additional costs they can claim (i.e. going from 5.000 to 4.500 claimable expenses per month or similar)

Welfare:

Job seekers allowance to be reduced to €190 per week, €125 for under 25s, all other benefits (including disability pension) to be reduced by 6%, rent allowance to be capped at a lower amount.

Children’s benefit to be cut by 10% across the board but with an additional grant for low income families to ensure they end up +/- 0

Misc:

Cigarettes, to increase by 15c per packet

Some VAT exempt/lower VAT rate items will be moved up one or more categories (to offset the decrease in VAT; goal is zero sum game on VAT)

Alcohol - to be left unchanged

gcgirl

tax anybody at the rate of 50% regardless of age that looks at the xfactor !

dustyrip

im with @seamus VAT will be cut, raising it last year didnt help at all

I don't think so, in the UK they reduced the standard rate of Vat from 17.5% to 15% and on the 1st of January its going back to 17.5% as the Vat Cut did not work and more money didn't flow into the economy. I would presume the Irish government would look at the UK's failure to implement this recently as an example of how to not touch the Vat rate, but knowing this government..

nesf

dustyrip wrote: »

im with @seamus VAT will be cut, raising it last year didnt help at all

I don't think so, in the UK they reduced the standard rate of Vat from 17.5% to 15% and on the 1st of January its going back to 17.5% as the Vat Cut did not work and more money didn't flow into the economy. I would presume the Irish government would look at the UK's failure to implement this recently as an example of how to not touch the Vat rate, but knowing this government..

Well, honestly I think they're backing the wrong horse if they cut VAT. People aren't not spending because VAT is too high, they're not spending money because they're afraid for their jobs/expect tax hikes/etc.

namenotavailablE

What odds on a car scrappage scheme to save motor sector jobs and stimulate spending?

Senna

The gov had a meeting with some of the heads in the IHF, IVF etc 2 weeks ago. They said there would be no cut in VAT.

thebman

nesf wrote: »

Well, honestly I think they're backing the wrong horse if they cut VAT. People aren't not spending because VAT is too high, they're not spending money because they're afraid for their jobs/expect tax hikes/etc.

Yeah but people are spending across the border where goods are significantly cheaper partly due to higher vat rates here as companies still have to maintain a profit margin.

Reducing vat would reduce incentive to cross border shop.

nesf

thebman wrote: »

Yeah but people are spending across the border where goods are significantly cheaper partly due to higher vat rates here as companies still have to maintain a profit margin.

Reducing vat would reduce incentive to cross border shop.

Yeah but the weak Sterling is a far bigger factor than a few %'s difference in VAT. We can't compete with N.I. wage levels right now and that's a huge factor in the price difference. It's similar for UK companies tendering for work here at the moment, the wage difference is the main factor in making it so hard for Irish businesses to compete with them.

K-9

thebman wrote: »

Yeah but people are spending across the border where goods are significantly cheaper partly due to higher vat rates here as companies still have to maintain a profit margin.

Reducing vat would reduce incentive to cross border shop.

I see what you are saying. I don't know if a cut in VAT will make that much of a difference though. It would needs to be to 15%, the lowest allowed by the EU. Then they lose the 6.5% on everything else.

Personally, I think an excise duty cut may work better.

westtip

Agree with most on the cuts side but so far no one has mentioned savings

Savings

He will try to offset the cut in child benefit by introducing a new savings scheme aimed at lifetime savings.

Every newborn child will receive a lump sum in form of a certificate to cash in on a lifetime savings policy.

This savings policy will be open to all.

There will be limited savings per person per annum made out of net income - ie unlike pensions there will be no relief on deposits. A limit of say 2000 euro per person per tax year.

The incentive will be savings will be dirt free. Investment will have to be in a stock funds - with a minimum % of all fund investments (say 30%) being put in Irish stocks and start up companies this will designed to help inject retail savings cash into irish start ups.

It will be modelled on the UK Childrens Trust Funds and a UK Tessa and Personal Equity Plans (PEPs - under a different name now).

There will no withdrawals allowed until children are 18 with limited withdrawal windows thoughout the lifetime of the savings plan - It will be called the Lifetime Milestones Savings Plan.

The aim of the plan will be to encourage savings for college and Lifetime milestones and to help the pension timebomb.

Pensions

contribution limits will be cut further

The tax free lump sum rules will be changed.

Greenmachine

Predictions

Introduction of a third tax band
Lower thresshold for hitting the second tax band
Childbenefit to be taxable for people abuse a certain net wages.
Increase in Petrol and diseal prices to put them on par with NI.
Upper VAT cut and some current luxuries items :rolleyes: like nappies to have a 0% rate applied
Plastic bag tax to be double from 22c to 44c
Unemployment benefit cut to €155 for under 24's
Unemployment rate to be cut by 4% for all others
Child benifit cuts of 7.5
City centre congestion charge to be introduced from jun 00
15c increase on the price of 20 cigarettes
Reduced duty on alcohol to encourage less cross border shopping and to save our pubs.
Increase the requirment to qualify for minimum wage from 2 years to 3 years.
A take a lump sum and don't come back for some of eastern european friend now unemployed.

thebman

nesf wrote: »

Yeah but the weak Sterling is a far bigger factor than a few %'s difference in VAT. We can't compete with N.I. wage levels right now and that's a huge factor in the price difference. It's similar for UK companies tendering for work here at the moment, the wage difference is the main factor in making it so hard for Irish businesses to compete with them.

I agree but realistically we need to do all we can to help keep spending in the country.

It needs someone with more time than I to work out what the ideal rate is. I'm not saying what I think it should be cut by but I think we could end up with a higher take if we reduced it as combined with a reduction in minimum wage and prices in stores, we could make it so it doesn't pay enough for people to go up north to do their shopping.

Shadowed

I agree with thebman. While a cut in the VAT rate may have a neutral affect on the VAT take, it may inspire a little more consumer confidence, particularly when combined with falling prices. An decrease in excise should deter the sterling pull to some extent, but the question, as always, with this Government is have they any inclination to look towards long term solutions for the economy.

seclachi

namenotavailabl wrote: »

What odds on a car scrappage scheme to save motor sector jobs and stimulate spending?

Car scrappage schemes are the biggest joke the motor industry has come up with for a while. It should never happen (and most likely wont), simply because we dont make any cars in this country, so the only effect of it would be to help out the Japanese, they would be better off just handing the money over to the garages, they`d get more out of it than the margins they make off cars.

K-9

Shadowed wrote: »

I agree with thebman. While a cut in the VAT rate may have a neutral affect on the VAT take, it may inspire a little more consumer confidence, particularly when combined with falling prices. An decrease in excise should deter the sterling pull to some extent, but the question, as always, with this Government is have they any inclination to look towards long term solutions for the economy.

Except people are bracing themselves for wage cuts, between the public service and stealth tax cuts, fears of unemployment, wage cuts etc.

A cut in VAT isn't going to make them fears go away.

Shadowed

K-9 wrote: »

Except people are bracing themselves for wage cuts, between the public service and stealth tax cuts, fears of unemployment, wage cuts etc.

A cut in VAT isn't going to make them fears go away.

I agree that a cut in VAT of itself will naturally not make peoples fear subside but I think that it may - and particularly if there was some sort of an excise 'amnesty' have a positive effect, if only to signal to the outside world that there may be room for a proper stimulus package down the road.

Also, while there are certainly going to be more job losses over the next year, from my experience certain sectors seem to be bedding down a bit again and their employees are feeling more secure and spending more. Before, I get lambasted for saying this, I say it as someone who joined thh dole queue myself 2 months ago. I have in recent times noticed there are more people in Dublin shops than I have seen in a long time - even taking Christmas into account.