How much is this all going to cost and who will pay for it ?

PommieBast

completedit wrote: »

I personally believe this decade will end the Euro if decisions are taken which heighten unrest to a tipping point. Brexit gives a precedent now and Brussels knows this. The next few years will be very interesting. It's make or break imo. As someone who is in favour of closer integration I really hope that the outcome will be a good one.

I'm honestly surprised Greece at the very least has not left. As much as the EU/Euro is hated in a lot of countries, a return to national currencies is even less popular. Most likely due to the belief that any reintroduced national currency will very quickly get debased.

Bit cynical

During the last financial crisis Ireland caved under intense international pressure to accept a bailout that was later spun as Ireland asking for help.

The next one will be Ireland genuinely asking for help.

political analyst

Bit cynical wrote: »

During the last financial crisis Ireland caved under intense international pressure to accept a bailout that was later spun as Ireland asking for help.

The next one will be Ireland genuinely asking for help.

At least it was still business as usual for most cafés and restaurants and most of the salons and barber shops were still open in that period!

Geuze

political analyst wrote: »

Obviously, the national debt has been increased by the borrowing that our government has been doing and the fact that the shutdown of many businesses means that there is less revenue for the Department of Finance.

Of course, the debt must be paid in the future. Given that the austerity brought about by the economic crisis into which Ireland was plunged just over a decade ago led to cutbacks in the health service and other public services, why would the government think that these onerous restrictions on businesses are helpful to the health service or to this country's welfare in general?

After all, the increasing of debt is never good for any country. I'm not sure that the lockdown's effect on the public finances has been sufficiently discussed.

The first paragraph is correct, except that tax revenues haven't fallen much, it's expenditure that has risen.

I don't get the second half of the second paragraph?

political analyst

Geuze wrote: »

The first paragraph is correct, except that tax revenues haven't fallen much, it's expenditure that has risen.

I don't get the second half of the second paragraph?

How can revenues not have fallen much? Look at the businesses that are shut down!

saabsaab

political analyst wrote: »

How can revenues not have fallen much? Look at the businesses that are shut down!

Were they not paying taxes?

PommieBast

political analyst wrote: »

How can revenues not have fallen much? Look at the businesses that are shut down!

Think the tax take from the FANGs and other MNCs is up.

Geuze

political analyst wrote: »

How can revenues not have fallen much? Look at the businesses that are shut down!

We all know the Irish income tax system is one of the most progressive in the world.

COVID proved it.

Thousands upon thousands laid off, and yet income tax receipts hardly fell.

This is because lower earners here pay hardly any tax.

Geuze

saabsaab wrote: »

Were they not paying taxes?

See section on Fiscal here, see pages 22, 28

https://www.ntma.ie/uploads/general/NTMA-Investor-Presentation-April-2021.pdf

Geuze

political analyst wrote: »

How can revenues not have fallen much? Look at the businesses that are shut down!

Indeed, it is odd.

2020 tax revenues were down, by 3.6%, see below:

https://www.gov.ie/en/press-release/86531-deficit-of-19-billion-expected-in-2020-taxes-down-21-billion-expenditure-up-179-billion-on-2019-donohoe-mcgrath/


Today’s Exchequer figures show that tax revenues in 2020 were down €2.1 billion, or 3.6 per cent on 2019;

• Income tax receipts were down €224 million, or 1 per cent on 2019, a smaller than expected fall due to strong PAYE and self-employed returns;

• VAT receipts finished the year €2.7 billion, or 18 per cent less than 2019, as public health restrictions impacted consumer spending;

• Similarly, excise returns were down €500 million, or 8per cent on 2019;

• The only major tax head to increase in 2020 was corporation tax, up €945 million or nearly 9 per cent;

• Total net voted expenditure in 2020 was €67.8 billion. This represents a 25 per cent, or €13.7 billion increase on 2019;

• The rise in expenditure reflects increased departmental drawdown in response to the Covid-19 pandemic, particularly in the areas of health and social protection;

• An Exchequer deficit of €12.3 billion was recorded in 2020, a €13 billion deterioration on the previous year. The Exchequer deficit is estimated to contribute to an overall general government deficit of €19 billion, or around 5½ per cent of GDP.

Geuze

Geuze wrote: »

We all know the Irish income tax system is one of the most progressive in the world.

COVID proved it.

Thousands upon thousands laid off, and yet income tax receipts hardly fell.

This is because lower earners here pay hardly any tax.

Hundreds of thousands laid off, yet income tax receipts fell by 1%.

Ireland is unusually in that vast amounts of earners pay zero income tax.

Even on a reasonable 48-50k income, my parents pay just 8-9% income tax.

Geuze

The provisional 2020 public accounts are published today.

https://www.cso.ie/en/releasesandpublications/er/gfsap/governmentfinancestatisticsprovisionalapril2021/

2020 = 18.4 billion deficit

PS revenue fell 3.5 bn, of which taxes fell 2.5bn

Expenditure up by 15 bn!!

Geuze

Geuze wrote: »

The provisional 2020 public accounts are published today.

https://www.cso.ie/en/releasesandpublications/er/gfsap/governmentfinancestatisticsprovisionalapril2021/

2020 = 18.4 billion deficit

PS revenue fell 3.5 bn, of which taxes fell 2.5bn

Expenditure up by 15 bn!!

But the economy is fine is what I keep reading on here...

Padre_Pio

Geuze wrote: »

Hundreds of thousands laid off, yet income tax receipts fell by 1%.

Ireland is unusually in that vast amounts of earners pay zero income tax.

Even on a reasonable 48-50k income, my parents pay just 8-9% income tax.

Between pensions, salary sacrifices, and other investments, my income tax is about 14-15% on a 70k gross income.

There are a few ways to avoid direct tax, and a few reliefs depending on employer and profession. PRSI and USC is a b*tch though.

Nermal

Geuze wrote: »

The provisional 2020 public accounts are published today.

https://www.cso.ie/en/releasesandpublications/er/gfsap/governmentfinancestatisticsprovisionalapril2021/

2020 = 18.4 billion deficit

PS revenue fell 3.5 bn, of which taxes fell 2.5bn

Expenditure up by 15 bn!!

The statistic that really matters. Yet we won't be having daily press briefings to dissect it.

Under any reasonable estimates of IFR, herd immunity threshholds and QALYs that we have saved, it has simply not been worth it.

Pussyhands

Government are a joke.

They're literally throwing money around willy nilly to keep people quiet. The pubs and hotels, not a peep from them since they started getting their big weekly packets.

Nearly every week you hear government announcing another 20 or 30m on some initiative...like for pubs to get equipment for outside dining.


There's been a massive increase in permanent spending during covid too...hearing Paschal on the radio a few months ago he's praying the economy growth is going to cover that extra...but I don't think it will.

Sharpyshoot

A crash will come faster than a bowel movement after a session of Guinness.

Danzy

Pussyhands wrote: »

Government are a joke.

They're literally throwing money around willy nilly to keep people quiet. The pubs and hotels, not a peep from them since they started getting their big weekly packets.

Nearly every week you hear government announcing another 20 or 30m on some initiative...like for pubs to get equipment for outside dining.


There's been a massive increase in permanent spending during covid too...hearing Paschal on the radio a few months ago he's praying the economy growth is going to cover that extra...but I don't think it will.

That's only a pittance in the scheme of a business, even a small one.

If you had even the barest notion about such things you wouldn't be posting as you do.

arctictree

The Government has borrowed its way out of this crisis.

You can be damn sure the response would have been different if that tap was turned off.

On another topic, I'm no economist but 50 years ago we were a nation of entrepreneurs. Look at photos of any bustling high street back then and all the small businesses working away. No way could we have closed them all.

Today, I'd say a large percentage of our work force is Public Service and Multinationals. Level 5 lockdown doesn't really effect these groups financially.

Danzy

arctictree wrote: »

The Government has borrowed its way out of this crisis.

You can be damn sure the response would have been different if that tap was turned off.

On another topic, I'm no economist but 50 years ago we were a nation of entrepreneurs. Look at photos of any bustling high street back then and all the small businesses working away. No way could we have closed them all.

Today, I'd say a large percentage of our work force is Public Service and Multinationals. Level 5 lockdown doesn't really effect these groups financially.

About 20% roughly between the 2.

Most people still work in small to medium businesses.

Hotblack Desiato

Nermal wrote: »

The statistic that really matters. Yet we won't be having daily press briefings to dissect it.

Under any reasonable estimates of IFR, herd immunity threshholds and QALYs that we have saved, it has simply not been worth it.

So nice of you to put a financial value on the lives of tens of thousands of people you don't know.

Padre_Pio

Hotblack Desiato wrote: »

So nice of you to put a financial value on the lives of tens of thousands of people you don't know.

A financial value is put on the lives of every person in this country constantly. Healthcare, education, social protection, your salary, your income tax, your insurance premium. Someone somewhere has looked at you, your circumstances, your dependents, your value to society, and your cost to society, then put a value on it.

timmyntc

Hotblack Desiato wrote: »

So nice of you to put a financial value on the lives of tens of thousands of people you don't know.

When you drive somewhere instead of walk or cycle, you are putting a value on other peoples lives too - driving is risky, you could kill someone. But you value your time more than the chance someone might die.

Same applies on a macro scale, we have to accept a certain level of death in order for society to function. So please spare us the faux outrage.

Hotblack Desiato

If it was possible to kill 5000 people in a year on the roads you'd have some sort of a point. (Of course 5000 is with all the restrictions - with no restrictions it could be ten times that.)

dundrum23

Geuze wrote: »

Hundreds of thousands laid off, yet income tax receipts fell by 1%.

Ireland is unusually in that vast amounts of earners pay zero income tax.

Even on a reasonable 48-50k income, my parents pay just 8-9% income tax.

Geuze , please explain how your parents only pay 7-8% tax on 50k?
I’m on that as a singleton and pay on average (between lower and higher bands) 38% tax on my income!

Geuze

dundrum23 wrote: »

Geuze , please explain how your parents only pay 7-8% tax on 50k?
I’m on that as a singleton and pay on average (between lower and higher bands) 38% tax on my income!

I will check the tax return now, hold on.

2018 gross combined income (married couple) = 50,500 approx

SRCOP is 49,967, so very little income charged at 40%

normal tax credits + 120 tax credit for some medical expenses + 490 Age tax credit

Net tax due = 3,458 or about 7%
USC = 0.5%/2%, low rate as they qualify for a medical card
USC = 710 euro

PRSI = zero, people over 65/66 don't pay PRSI

Tax/USC + PRSI = 4,168 or 8.2%



In return, they get:

Free TV licence
Free travel pass
2x medical cards
35 pm / 420 pa off the electricity bill

Such a great country!!

dundrum23

It is an amazing country!
Thanks for the info and breakdown Geuze.
I have the sense that they re better off than my parents, despite my father being on a higher salary, which is confusing, but there you go.

GazzaL

Deleted User wrote: »

They raided people's savings in Cyprus during the last crisis, and to be fair there have been so many things that happened during COVID that I thought would be impossible in a democracy, that this would be trivial to do.

The only way out I see is either the ECB writes off a load of sovereign debt, or inflates it away. The former is vastly preferable, but I don't see "ze Germans" or the others in the frugal four agreeing to it.

Why would debt be written off? Irish politicians would give the impression that this is all free money, while in the UK they have publicly discussed the cost and even increased their Corporation Tax. Ireland deserves to get ****ed, and the people who supported the lockdowns, the politicians, the public servants, all deserve to pay more taxes.

CalisGirl

David McWilliams has a couple of really interesting podcasts on financing the Government spending needed to maintain covid shutdowns. Essentially under the thinking of Modern Monetary Theory, a country that spends, taxes and borrows in its own currency is not constrained by the revenue it can raise via taxing.

So the EU countries can borrow as much as they need *in Euro* to prevent a covid recession. The ECB will then back their borrowings by promising to print Euros to repay those borrowings. This is why Christine Lagarde has recently been calling on governments to keep spending to avoid a covid recession.

McWilliams also claims this is Biden's plan to finance the trillion dollar stimulus packages recently passed in the US.

Hotblack Desiato

Hotblack Desiato wrote: »

If it was possible to kill 5000 people in a year on the roads you'd have some sort of a point. (Of course 5000 is with all the restrictions - with no restrictions it could be ten times that.)

Is there any evidence for that? An Imperial College model predicted 85,000 people would die in Sweden without a lockdown: https://www.spectator.co.uk/article/why-boris-johnson-needs-to-speak-to-anders-tegnell

And Sweden still has very few restrictions. But maybe a better example would be Norway. Although restrictions have got tighter there recently, save for what might be described as a snap lockdown last year, life there has been pretty normal, and there have been very few deaths there.

GazzaL

Deleted User wrote: »

Is there any evidence for that? An Imperial College model predicted 85,000 people would die in Sweden without a lockdown: https://www.spectator.co.uk/article/why-boris-johnson-needs-to-speak-to-anders-tegnell

And Sweden still has very few restrictions. But maybe a better example would be Norway. Although restrictions have got tighter there recently, save for what might be described as a snap lockdown last year, life there has been pretty normal, and there have been very few deaths there.

I know people in Sweden, they're having a great time. Snapchat is full of them lashing back pints in pubs, out socialising, living life to the fullest. Bastards :pac:

saabsaab

Mass air travel is largely responsible for the spread of this. How about we slap a tax on air travel to help pay or at least put an excise on the fuel. Why on earth is it exempt anyhow? I don't think any other sector is and it would be a tax on carbon usage.

PommieBast

saabsaab wrote: »

Mass air travel is largely responsible for the spread of this. How about we slap a tax on air travel to help pay or at least put an excise on the fuel. Why on earth is it exempt anyhow? I don't think any other sector is and it would be a tax on carbon usage.

I have enough taxes as is. Goodbye.

Del Griffith

GazzaL wrote: »

I know people in Sweden, they're having a great time. Snapchat is full of them lashing back pints in pubs, out socialising, living life to the fullest. Bastards :pac:

How selfish

Soulsun

Geuze wrote: »

The provisional 2020 public accounts are published today.

https://www.cso.ie/en/releasesandpublications/er/gfsap/governmentfinancestatisticsprovisionalapril2021/

2020 = 18.4 billion deficit

PS revenue fell 3.5 bn, of which taxes fell 2.5bn

Expenditure up by 15 bn!!

Thanks for this... can we have these figures independently audited and then audited again

Massive spike in expenditure.. interesting tax increases ahead regardless of what the politicians say.
Also the CT rate is going to be another headache.

Wanderer78

Soulsun wrote:

Massive spike in expenditure.. interesting tax increases ahead regardless of what the politicians say. Also the CT rate is going to be another headache.

There doesn't necessarily need to be tax hikes, the deficit should in fact be increased, the new debts could be used to stimulate the economy, particularly the private sector, as that's where the majority are employed, and where the majority of capacity is in the economy. The increase in economic activities would increase revenue, thus allowing us to be able to service these new debts. We should become more comfortable with this approach, and not default to balanced budgets, as doing so, causes the repeating boom bust cycles, due to over reliance of the private sector money supply, I.e. Credit, this is what America is attempting with its 2 trillion stimulus

saabsaab

saabsaab wrote: »

Mass air travel is largely responsible for the spread of this. How about we slap a tax on air travel to help pay or at least put an excise on the fuel. Why on earth is it exempt anyhow? I don't think any other sector is and it would be a tax on carbon usage.

Most of us like flying around the place

Jizique

Wanderer78 wrote: »

There doesn't necessarily need to be tax hikes, the deficit should in fact be increased, the new debts could be used to stimulate the economy, particularly the private sector, as that's where the majority are employed, and where the majority of capacity is in the economy. The increase in economic activities would increase revenue, thus allowing us to be able to service these new debts. We should become more comfortable with this approach, and not default to balanced budgets, as doing so, causes the repeating boom bust cycles, due to over reliance of the private sector money supply, I.e. Credit, this is what America is attempting with its 2 trillion stimulus

Governments love spending - what do you suggest? More subsidies for houses (which only pushes up the cost)

Wanderer78

Jizique wrote: »

Governments love spending - what do you suggest? More subsidies for houses (which only pushes up the cost)

we need more government spending, but in the right ways, we keep pushing the money supply towards the private sector, which keeps causing credit fueled bubbles, the graph below clearly showed how this occurred previously. we need more state involvement in regards housing, in particular financing of this critical need, we also need the private sector to actually do the work of building.

Jizique

Wanderer78 wrote: »

we need more government spending, but in the right ways, we keep pushing the money supply towards the private sector, which keeps causing credit fueled bubbles, the graph below clearly showed how this occurred previously. we need more state involvement in regards housing, in particular financing of this critical need, we also need the private sector to actually do the work of building.

Everyone has their own definition of the right way.
The hospital consultants want more positions for their mates, we shut down the economy to save the elderly but they will want to retain their tax advantages and their annual increments, the lefties want to spend the money on ex-EU immigrants.
This is not going to end well.

Wanderer78

Jizique wrote: »

Everyone has their own definition of the right way.
The hospital consultants want more positions for their mates, we shut down the economy to save the elderly but they will want to retain their tax advantages and their annual increments, the lefties want to spend the money on ex-EU immigrants.
This is not going to end well.

theres sufficient evidence to support what i and others are saying about this now, this is the main reason behind americas 2 trillion stimulus, theyre trying to brake their credit fueled boom bust cycles also, we need to follow them also. our current approach, by providing individuals with even more money to outbid each other, is now catastrophically failing, this is clearly obvious now

kippy

Jizique wrote: »

Everyone has their own definition of the right way.
The hospital consultants want more positions for their mates, we shut down the economy to save the elderly but they will want to retain their tax advantages and their annual increments, the lefties want to spend the money on ex-EU immigrants.
This is not going to end well.

Well it never really ends does it. Just cycles through.
Never too good for the head to think about it all too much

saabsaab

Koa Magnificent Lapel wrote: »

Most of us like flying around the place

Can't see why it should be exempt just because? Put a true cost on it I mean 34 euro for a flight to Spain! It would cost more in Diesel/petrol to drive to Kerry.

Eric Cartman

Wanderer78 wrote: »

we need more government spending, but in the right ways, we keep pushing the money supply towards the private sector, which keeps causing credit fueled bubbles, the graph below clearly showed how this occurred previously. we need more state involvement in regards housing, in particular financing of this critical need, we also need the private sector to actually do the work of building.

No and.... No.
Those two things always result in failure here.

Wanderer78

Eric Cartman wrote: »

No and.... No.
Those two things always result in failure here.

so you would like to continue running our economy on credit, just like we did during the previous boom?

amacca

Wanderer78 wrote: »

theres sufficient evidence to support what i and others are saying about this now, this is the main reason behind americas 2 trillion stimulus, theyre trying to brake their credit fueled boom bust cycles also, we need to follow them also. our current approach, by providing individuals with even more money to outbid each other, is now catastrophically failing, this is clearly obvious now

I agree with the principle of this...a lot of people are fcuk8ng morons with money ....and some are morons when it comes to bidding on property everyone else is effectively forced to dance to their tune

It amuses me when you see a guy or girl penny pinching on the most minor everyday items and then bidd8ng in 20k increments on a house and taking out a credit union loan afterwards to fully furnish the thing to go with the shiny new pcp car in the driveway.

Pauliedragon

We should spend our way through a recession and then when times get better governments should say right lads we looked after ye lately now we need a few more quid every week off ye to pay it off and we'll get back to normal. Interest rates are **** all at the moment so borrow but remind people that the cost will pop up down the line but governments won't do that unless it's a last resort as raising tax is a vote loser and winning the next election is more important.

timmyntc

Pauliedragon wrote: »

We should spend our way through a recession and then when times get better governments should say right lads we looked after ye lately now we need a few more quid every week off ye to pay it off and we'll get back to normal. Interest rates are **** all at the moment so borrow but remind people that the cost will pop up down the line but governments won't do that unless it's a last resort as raising tax is a vote loser and winning the next election is more important.

We cant do that because by the time "things get back to normal" we will be due to repay significant debts already - if we borrow to cover this and more than we will be leaving ourselves with an even bigger debt to repay. At some point it no longer becomes possible to repay, and our economy will seriously stagnate.

We cannot take on any more debt, we simply do not have the capacity in real terms to repay it.

KyussB

This isn't 2010, interest rates are negative and we're literally being paid to take on debt.

Sweet.Science

KyussB wrote: »

This isn't 2010, interest rates are negative and we're literally being paid to take on debt.

1. You still pay back the debt
2. Interest rates can change