Budget Adjustment To Be Closer To €4 Billion

Sierra Oscar · 05-07-2011 05:00PM #1

I suppose we shouldn't be all that surprised by this story emerging, but its sort of bewildering that the expected 2012 budget adjustment requirment is creeping upwards all the time in a manner which is identical to the creeping trend prior to the 2011 budget.

Brian Lenihan stated that he expected the 2011 budget to be around €4 Billion this time last year and it ended up being €6 Billion. Initially it was thought it would be €3 Billion. Should we be bracing ourselves for a budget which will be as savage, if not more savage, than the 2011 budget?

Worrying stuff . . .

Budget adjustment may reach €4bn - Noonan

Minister for Finance Michael Noonan has told the Dáil that the scale of the adjustment in next year's Budget may be higher than the previously anticipated figure of €3.6bn.

ei.sdraob · 05-07-2011 05:10PM

I can see it now,

* compulsory pensions for all workers, with the money of course invested in Irish bonds. They will turn around and say "look ma were back to the markets :P"
* maybe a levy on all savings accounts of 0.1% (thats 100million from the 100billion or so on deposit here by those foolish enough) now that precedent was set
* ~300 or so in property tax bringing in about 500 million.
* water charges no matter how dirty your water is

Fun times ahead.

sollar · 05-07-2011 06:07PM

Does the fact that they constantly revise the budget adjustments upwards mean what they are doing isn't really working.

murphaph · 05-07-2011 07:03PM

When is the reality going to bite that the CP deal was unworkable. Noonan said himself that "all the low hanging fruit has been picked" (read capital schemes that nobody will miss) and next year it'll be much harder. Do the govt. really believe they can avoid further cuts to PS pay and SW? I don't.

hmmm · 05-07-2011 07:24PM

murphaph wrote: »

Do the govt. really believe they can avoid further cuts to PS pay and SW? I don't.

Of course they can. The electorate decided to vote Labour into power, so taxes will be increased massively while Social Welfare and Public Sector employees will be largely untouched. It's the choice we made as a country, the same way as the country voted FF into power and gorged on the property bubble.

In 2020, after taxes reach 1970s levels, we'll all shake our heads and point at someone else as being at fault.

Skipmeister · 05-07-2011 07:50PM

The ordinary working person will be screwed again but we can sleep easy knowing Bono etc wont have to worry about their tax returns. And the political rats that deserted the sinking ship last year will remain on their fat pensions!

Icepick · 05-07-2011 08:34PM

They need to cut welfare, especially rent allowance.

Skipmeister · 05-07-2011 09:23PM

There are a lot of people who worked all their life on rent allowance and dole, they are at their lowest ebb, why drive them further when there are lots of fat cats to follow. Get informed icepick!

Tora Bora · 05-07-2011 09:57PM

Blue Shirts told us all, they would not increase income tax.
That's good enough for me.
Enda keeps his promises.
Enda is honest.
Enda is a reforming Taoiseach.
Nepotism is gone, the way of the FF'ers.
Broken election pledges are gone with the FF'ers.
I have faith in Enda.
He told the housewives of Ireland on the Late Late, with Tubbs, that he would mark every ministers end of year school report against a very stringent set of goals. He told the housewives, to expect a copy of the school reports in the mail and on the radio and on the TV.
Enda is a good, reforming Chief Executive Officer.
Is feider leis, Is feider leis.

I voted for Enda. I'm fine with that. He will not increase my tax. He said he wouldn't. He mentioned something about firing 30,000 public service workers. He gave that task to some minister. Must be a Labour minister.

Now I wounder does he get to mark the Labour ministers cards, or is that a job for Eamo.
Who marks Eamo's card I wonder.

:eek:

Skipmeister · 05-07-2011 10:05PM

Wake up tora bora, a high per centage of those PS are teachers, sna's nurses and Garda, Enda has got rid of a lot of sna's, stopped training garda and as we saw this week how tough their job is, you may add to your poem of the great enda when your paying more tax, water charges and property tax in sept

Chucky the tree · 06-07-2011 12:32AM

Skipmeister wrote: »

There are a lot of people who worked all their life on rent allowance and dole, they are at their lowest ebb, why drive them further when there are lots of fat cats to follow. Get informed icepick!

Because they are the ones costing the most amount of money.

declanx · 06-07-2011 01:51AM

Oh dear 4 billion! So more tax and more cut backs. But as the OP say's: No surprise. I am worried about the 2013 and 2014 budgets and the cuts they will bring in.

P.S. Is Enda & Co closing the Tax loopholes?

P.S.S I think we are in acute economic shock and the blame game is for another election.
These are the opinions of an engineer, not an economist.

beagle001 · 06-07-2011 07:17AM

More taxes and austerity the very opposite thing this country needs to help kick start the economy.
We need to get the public sector in line first off,70% of tax goes on this lot.
If Ireland took a leaf out of countries like Hong Kong they could drastically alter the way the economy is shaped over time and give growth a chance.
It's the same for the whole of Europe too much government involvement in the economy and a dependants culture it's a vicious circle almost like the former soviet countries and we saw how that worked out.
It's inevitable of a default by Ireland and the other pigs,all this austerity will lead to no growth and a severe second depression.
A relative lectures at a UK university and the hours they are required to do over the year is far more than uni's here,pay is way less and less holidays.
They were over for a conference here and could not get over how sweet lecturers in universities in Ireland have it being the country is bankrupt.
Civil servants,teachers,guards,hse,army all need their pay reduced to a similar level as their UK counterparts.

RichardAnd · 06-07-2011 07:49AM

Tora Bora wrote: »

I voted for Enda. I'm fine with that. He will not increase my tax. He said he wouldn't. He mentioned something about firing 30,000 public service workers. He gave that task to some minister. Must be a Labour minister.

:eek:

If Enda had said that, he would have lost the vote of a sizable number of people who are either employed in the public service or releated to public servants. What FG actually said was that they would reduce the public service by 30'000 but that it would be done by natural wasteage and by voluntary redundancy.

irishh_bob · 06-07-2011 08:34AM

Icepick wrote: »

They need to cut welfare, especially rent allowance.

they need to cut wellfare , especially the old age pension

Nody · 06-07-2011 08:49AM

Skipmeister wrote: »

There are a lot of people who worked all their life on rent allowance and dole, they are at their lowest ebb, why drive them further when there are lots of fat cats to follow. Get informed icepick!

Because not only did dole and benefits increase faster then inflation (i.e. more net money in hand) along with the rent allowance it creates a artificial floor for rents to drop (about half of all rented accomodations have rent allowance money going into them making the state have by far the largest factor in average rents).

careca11 · 06-07-2011 08:52AM

Sierra Oscar wrote: »

I suppose we shouldn't be all that surprised by this story emerging, but its sort of bewildering that the expected 2012 budget adjustment requirment is creeping upwards all the time in a manner which is identical to the creeping trend prior to the 2011 budget.

Brian Lenihan stated that he expected the 2011 budget to be around €4 Billion this time last year and it ended up being €6 Billion. Initially it was thought it would be €3 Billion. Should we be bracing ourselves for a budget which will be as savage, if not more savage, than the 2011 budget?

Worrying stuff . . .

Budget adjustment may reach €4bn - Noonan

well with kenny/noonan already showing that haven't the balls to cut the €21bn PS pay bill nor the €20bn social welfare bill , I'm guessing , going to be a case of , levies , levies and more feckin levies

mikemac · 06-07-2011 09:29AM

Cut rent allowance!

It's a floor on the market and low paid workers have to compete with tenants on welfare for the cheap rentals.

Different counties have different rates but in Dublin it can be over €900 a month for a small family

Cut it and the market will adjust and rents will go down
Hundreds of millions can be saved here

Raskolnikov · 06-07-2011 09:56AM

murphaph wrote: »

Do the govt. really believe they can avoid further cuts to PS pay and SW? I don't.

Of course they can. The unions will be out on the street screaming blue murder if the public sector get touched anymore. It's much easier for the government to look at other measures, like increasing taxes, or start drawing down on private pensions.

Godge · 06-07-2011 10:26AM

careca11 wrote: »

well with kenny/noonan already showing that haven't the balls to cut the €21bn PS pay bill nor the €20bn social welfare bill , I'm guessing , going to be a case of , levies , levies and more feckin levies

Think your figures are wrong. PS pay bill closer to 16 bn than 21 and social welfare/tranfer payments bill more than 20 bn.

Anyway, promises are no cuts in social welfare rates, no cuts in public service salaries and no increases in income tax rates. How to raise 4 bn with those constraints?

Property tax and water charges - €1 bn
Double or triple second home tax - €360m
Non-replacement of public service staff who retire before the Feb 2012 deadline (that is when the lump sum will be reduced if you stay in so lots will leave) - €300m
Standard rate pension tax relief in one year rather than three as planned(which is a net pay cut for all public servants and for private sector people with a pension) - ???m
Reduce all tax reliefs - ???m
Reduce rent allowance - ???m
Change eligibility conditions for social welfare e.g. no child benefit after fourth child, no single parent payment for child above 12, no dole if refuse training, change part-time dole, stricter definition of those who attract carers allowance - ???m
Tax social welfare, reduce other fringe benefits and waivers such as medical card, fuel, travel, bin charge(make everyone pay a minimum on environmental grounds) etc - ???m
Charge for more public services, increasing cost of passports, licences etc
Reduce fees to GPs, dentists, vets and pharmacists - ??m

You are well on the way to 4 bn with that list but you haven't broken the main promises while cutting the pay bill, the social welfare bill and increased the tax take.

Rabidlamb · 06-07-2011 11:37AM

Government can't cut PS pay due to CPA.
IMF tell government to cut PS pay 20%.
Government cut PS pay 15% & blame IMF.
?????????
Profit.

Irish Slaves for Europe · 06-07-2011 11:58AM

ei.sdraob wrote: »

I can see it now,

* compulsory pensions for all workers, with the money of course invested in Irish bonds. They will turn around and say "look ma were back to the markets :P"
* maybe a levy on all savings accounts of 0.1% (thats 100million from the 100billion or so on deposit here by those foolish enough) now that precedent was set

You could be on to something there. They are actually 2 excellent ideas.

The government should definitely use our pensions to avoid having to use bailout funds with their punitive interest rates. Its an idea that would save the country billions and would result in a MUCH quicker recovery. The government would simply give each person with a pension an IOU and then pay it back when the countries finances are in better shape, and then perhaps pay a small interest rate like 1% if finances permit. Now obviously they couldn't do this with people nearing retirement age, but they should definitely tap into the pensions of people aged 45 or under. The money is just sitting there anyway not being used, so why not tap into it? I know some people won't be too happy especially if they were hoping for their pension to earn interest each year but these are unprecedented times and this is the least objectionable option. Using our pensions like this will be for the benefit of all of us in the long run.

Increasing DIRT is another smart move, people are saving too much and not spending, so if such a move would encourage people to spend more and save less than all the better.

RichardAnd · 06-07-2011 12:10PM

Irish Slaves for Europe wrote: »

You could be on to something there. They are actually 2 excellent ideas.

The government should definitely use our pensions to avoid having to use bailout funds with their punitive interest rates. Its an idea that would save the country billions and would result in a MUCH quicker recovery. The government would simply give each person with a pension an IOU and then pay it back when the countries finances are in better shape, and then perhaps pay a small interest rate like 1% if finances permit. Now obviously they couldn't do this with people nearing retirement age, but they should definitely tap into the pensions of people aged 45 or under. The money is just sitting there anyway not being used, so why not tap into it? I know some people won't be too happy especially if they were hoping for their pension to earn interest each year but these are unprecedented times and this is the least objectionable option. Using our pensions like this will be for the benefit of all of us in the long run.

Increasing DIRT is another smart move, people are saving too much and not spending, so if such a move would encourage people to spend more and save less than all the better.

Are you being sarcastic?

sollar · 06-07-2011 12:13PM

mikemac wrote: »

Cut rent allowance!

It's a floor on the market and low paid workers have to compete with tenants on welfare for the cheap rentals.

It would be interesting to know how many politicians are NOT landlords.

They seem to be going very easy on the multiple home owners. I wouldn't expect much change in that either.

sollar · 06-07-2011 12:15PM

careca11 wrote: »

well with kenny/noonan already showing that haven't the balls to cut the €21bn PS pay bill

I'll save you 4.3 billion instantly careca11 because the PS paybill is 16.7 billion not 21bn. Thats good news isnt it

Irish Slaves for Europe · 06-07-2011 12:17PM

RichardAnd wrote: »

Are you being sarcastic?

no, if you disagree with what I said then tell me what it is exactly that you object to?

careca11 · 06-07-2011 12:28PM

sollar wrote: »

I'll save you 4.3 billion instantly careca11 because the PS paybill is 16.7 billion not 21bn. Thats good news isnt it

[16.7bn or 20.9bn , its simply unsustainable for a country that is broke,

yesterday we heard the union leaders talking b0ll0x about not paying our mortgage , these fcuked need to look in the mirror.

hmmm , i wonder how much o'connor pension and golden-hand shake will be upon retiring

ardmacha · 06-07-2011 12:29PM

The government needs to look at the long term structure of public expenditure and revenue generation and direct its efforts towards moving toward that long term structure. These moves might not be immediate, as hasty action might do as much harm as good. So PS pay will not be increased for a long while, and probably the new scale people (-10%) will be the first to get increases. So by 2014 PS pay will have declined 10% relative to EU averages and 6% or so relative to Irish private salaries. In the meantime the CPA facilitates efficiencies. This will make things more or less appropriate on average and some sort of benchmarking process can be used to address issues that will arise. A long term sustainable structure will involve annual property taxes rather than those when you sell your house and these should be introduced forthwith. There are savings to be made here and there in relation to multiple tax allowances and welfare benefits, these changes should be made anyway.
This is a balancing act.

Tora Bora · 06-07-2011 12:32PM

Is there enough money still "resting" in that SIPTU training slush fund account, to refloat the economy.:cool:

Irish Slaves for Europe · 06-07-2011 12:33PM

Tora Bora wrote: »

Is there enough money still "resting" in that SIPTU training slush fund account, to refloat the economy.:cool:

oh yeah, what was the result of that investigation? was it all just swept under the carpet?

phil1nj · 06-07-2011 12:36PM

Irish Slaves for Europe wrote: »

Increasing DIRT is another smart move, people are saving too much and not spending, so if such a move would encourage people to spend more and save less than all the better.

Not really, people will still save when the future looks uncertain, they just won't place it in financial instituitions (banks, credit unions etc). This leads to 2 potential issues, DIRT take will actuallydrop and it also could lead to people keeping large sums of cash on their premises/homes - a would be thiefs wet dream.

Irish Slaves for Europe · 06-07-2011 12:42PM

phil1nj wrote: »

Not really, people will still save when the future looks uncertain, they just won't place it in financial instituitions (banks, credit unions etc). This leads to 2 potential issues, DIRT take will actuallydrop and it also could lead to people keeping large sums of cash on their premises/homes - a would be thiefs wet dream.

I'm sorry but thats just not going to happen, people aren't going to start storing 15k under their mattresses because the government has slightly increased dirt.

Godge · 06-07-2011 12:55PM

ardmacha wrote: »

The government needs to look at the long term structure of public expenditure and revenue generation and direct its efforts towards moving toward that long term structure. These moves might not be immediate, as hasty action might do as much harm as good. So PS pay will not be increased for a long while, and probably the new scale people (-10%) will be the first to get increases. So by 2014 PS pay will have declined 10% relative to EU averages and 6% or so relative to Irish private salaries. In the meantime the CPA facilitates efficiencies. This will make things more or less appropriate on average and some sort of benchmarking process can be used to address issues that will arise. A long term sustainable structure will involve annual property taxes rather than those when you sell your house and these should be introduced forthwith. There are savings to be made here and there in relation to multiple tax allowances and welfare benefits, these changes should be made anyway.
This is a balancing act.

You underestimate the correction. Including the pension levy, the pay cut in Janaury 2010, the T2016 increases from 2009 not paid in the public sector (but paid in the banks and other private sector organisations), the 10% cut for new entrants from Janaury 2011 and a pay freeze until at least 2014 mean that the relative cut in public sector salaries over a period of five years could be in the region of 30%.

The difficulty now in relation to public service pay is that while the overwhelming majority of public servants were overpaid, some public servants have been overpaid by as much as 50% but others by much lesser amounts (some as little as 5% overpaid in 2009) and there will be an element of overshoot as well as undercorrection in the adjustment. Identifying who is still overpaid and who is underpaid will be the difficult bit come 2014.

You are right about the need for a property tax as well as the need to abolish multiple levels of tax relief and social welfare to simplify the system - speaking of which, where is the single means test we were all promised?

Godge · 06-07-2011 01:06PM

phil1nj wrote: »

Not really, people will still save when the future looks uncertain, they just won't place it in financial instituitions (banks, credit unions etc). This leads to 2 potential issues, DIRT take will actuallydrop and it also could lead to people keeping large sums of cash on their premises/homes - a would be thiefs wet dream.

So leave it under the mattress at 0% interest or place it in the bank with say 2% interest and DIRT of 50% leaving you with 1% interest. You reckon people will pick the first one.

Ah, that helps explain why so many people thought you could buy apartments on the Bulgarian East coast and expect to make money or thought their one-off house in the middle of nowhere would always be worth the €500,000 they spent to build it.

Godge · 06-07-2011 01:11PM

keithob wrote: »

muppets the whole lot of them..........

the banking system is sucking the money out of the economy and before we know it we will be on our knees.

the blame game i.e cut welfare this and that has started.

if the banks and the govt hadnt of fkd up we wouldnt be where we are.

Get out of europe and sort our own problems out.

secondly that clown kenny as much as he has done nothing wrong he seems to have done no major changes...

we are being raped by the EU and the IMF - default now instead of delaying the enevitable.

viva la revolucion!

Gross over-simplification.

We have two problems - the banks and the general deficit.

The problem of the banks results from lax regulation, poor oversight, poor lending practices, borrowers greed and Brian Lenihan's guarantee and other stupid policy decisions in the aftermath of the crisis. Yes, we shouldn't have had to pick up the tab but the Irish played a large part in creating that mess.

The problem of the general deficit goes back to when Bertie was Finance Minister, was worsened by McCreevy, Cowen and Lenihan. We spend more than we take in. We have to correct that one ourselves as this is completely our mess.

Would love to see the "get out of Europe and sort our own problems out" brigade react to the minimumn 40% cut in social welfare that would be necessary the day after we pulled out of the euro.

Dannyboy83 · 06-07-2011 01:12PM

Ronan Lyons had a good article recently on property tax
http://www.ronanlyons.com/2011/06/07/on-hogans-stand-or-how-to-introduce-an-interim-property-charge-fairly/

. Suppose that the Government wants the interim charge to bring in €1,500m when it’s fully running, as a precursor to a proper land value tax that contributes about €2,000m per annum to the Exchequer (this is on a par with what other countries get from property tax). That suggests an average charge per household of €1,000. Clearly then, a suitable charge for the top band of properties would be in the region of €1,400 a year, while one for the lowest band would be about €500. I would also suggest, while I have the stage, that to make it easier, PAYE workers should be able to deduct it from source, so it comes out as extra €40-€120 a month in tax.

So look at where you are on that map Ladies and Gents.
That's where 33 to 50% of this €4billion adjustment will be coming from...........your paycheck.

Dannyboy83 · 06-07-2011 01:15PM

I would count on reshuffling of the VRT bands too.

Basically, anyone driving a new €104 per year low emissions vehicle will probably be in the €300 range in a year or two.
Anyone currently paying in the €350 range will be looking at €700 p.a. in a year or two.

This is exactly what they did in France.

Godge · 06-07-2011 01:18PM

Dannyboy83 wrote: »

Ronan Lyons had a good article recently on property tax
http://www.ronanlyons.com/2011/06/07/on-hogans-stand-or-how-to-introduce-an-interim-property-charge-fairly/

So look at where you are on that map Ladies and Gents.
That's where 33 to 50% of this €4billion adjustment will be coming from...........your paycheck.

A few things to note:

That map only shows three-bed semis so not fully representative.
Hard to construct a tax on valuations in a dormant, falling market.
Concentration on the map of higher valuations in Labour strongholds means a politically more viable alternative will be looked at.

phil1nj · 06-07-2011 01:51PM

Irish Slaves for Europe wrote: »

I'm sorry but thats just not going to happen, people aren't going to start storing 15k under their mattresses because the government has slightly increased dirt.

Right so the current rate of DIRT is 27%, that means the government essentially take over 1/4 of the (pitiful) interest earned on their savings just because they can. When does this figure beome a factor in determining when a person stops putting money in to banks etc? Is it 30%? 40%?. There's only so many times the government can piss down peoples backs and tell them its raining before there's a backlash.

DIRT will be the least of peoples worries when there's a default and a new currency gets introduced. All that money in those institutions will automatically switch to this "Punt Nua" or waht ever mane they give it, effectively wiping out their savings when this new currency plummets against the value of the Euro. And if that doesn't happen there will be such a run on the banks that many multiples of 15K Euro will be withdrawn and stuffed under mattresss throughout the country. That of course, would be a worst case scenario.:p

the groutch · 06-07-2011 01:54PM

why don't they just tear up the CPA and get all the cuts over with in one fell swoop?

phil1nj · 06-07-2011 02:02PM

Godge wrote: »

So leave it under the mattress at 0% interest or place it in the bank with say 2% interest and DIRT of 50% leaving you with 1% interest. You reckon people will pick the first one.

Ah, that helps explain why so many people thought you could buy apartments on the Bulgarian East coast and expect to make money or thought their one-off house in the middle of nowhere would always be worth the €500,000 they spent to build it.

I think a significant proportion would choose the first option, yes. Banks and credit unions offer 2% return on your cash but both institutions have had well documented problems over the past 24 months (my own Credit Union offered what can only be described as an abysmal dividend payout last year of 0.4%). To all intents and purposes I would have been better keeping the money at home. At least I would have had access to it anytime I wanted plus the department of finance can’t get their filthy mitts on it either using whatever stealth methods they choose to employ.

I’m not sure I see the relevance of your example about the property market though.

Nody · 06-07-2011 02:11PM

the groutch wrote: »

why don't they just tear up the CPA and get all the cuts over with in one fell swoop?

Labour (and being afraid to actually take a fight with the unions in general).

Godge · 06-07-2011 02:14PM

phil1nj wrote: »

I think a significant proportion would choose the first option, yes. Banks and credit unions offer 2% return on your cash but both institutions have had well documented problems over the past 24 months (my own Credit Union offered what can only be described as an abysmal dividend payout last year of 0.4%). To all intents and purposes I would have been better keeping the money at home. At least I would have had access to it anytime I wanted plus the department of finance can’t get their filthy mitts on it either using whatever stealth methods they choose to employ.

I’m not sure I see the relevance of your example about the property market though.

You wouldn't have been better off keeping your money under the mattress. Assuming the amount is less than €100,000, it is under a cast-iron guarantee and is safe.

So 0% under the mattress or 2% (less 27%) giving 1.46% in the bank and you choose the mattress. Similar hair-brained decision to those who chose to take out 110% mortgages on 40-year terms for two-bed apartments in Dunshaughlin.

phil1nj · 06-07-2011 02:25PM

Godge wrote: »

You wouldn't have been better off keeping your money under the mattress. Assuming the amount is less than €100,000, it is under a cast-iron guarantee and is safe.

So 0% under the mattress or 2% (less 27%) giving 1.46% in the bank and you choose the mattress. Similar hair-brained decision to those who chose to take out 110% mortgages on 40-year terms for two-bed apartments in Dunshaughlin.

Cash in hand - 100% guranteed also. Plus invisible to the revenue.

2% (less 27%) gives 1.46% return on savings (for using your money to lend to customers at a mutiple of this piss poor interest rate). Free banking will also start to become a thing of the past as banks figure out new ways of screwing customers to bolster their balance sheets. Now watch this interest rate start to plummett when you factor these in and a higher DIRT rate.

As for the 110% , 40 year mortgage. Don't have one of these so cannot comment.

Godge · 06-07-2011 02:30PM

phil1nj wrote: »

Cash in hand - 100% guranteed also. Plus invisible to the revenue.

2% (less 27%) gives 1.46% return on savings (for using your money to lend to customers at a mutiple of this piss poor interest rate). Free banking will also start to become a thing of the past as banks figure out new ways of screwing customers to bolster their balance sheets. Now watch this interest rate start to plummett when you factor these in and a higher DIRT rate.

As for the 110% , 40 year mortgage. Don't have one of these so cannot comment.

As I said 1.46% is better than 0%.

As for the bit in bold, that is tax evasion and a crime, also the main reason why Greece is worse off than we are.

phil1nj · 06-07-2011 02:35PM

Godge wrote: »

As I said 1.46% is better than 0%.

As for the bit in bold, that is tax evasion and a crime, also the main reason why Greece is worse off than we are.

Right so if I take all of my savings out of a credit union or bank, I'm evading tax???

My point was, that if the government decide to target peoples savings directly or indirectly (as per the pension fiasco a few months ago) they'll get **** all off me. I never mentioned tax evasion.

If you think that 1.46% is a good return on your money when banks make between 5 and 10 times this by loaning it to the general public, off you go. BOI and AIB love people like you almost as much as they love people with 110%, 40 year mortgages.

Godge · 06-07-2011 02:47PM

phil1nj wrote: »

Right so if I take all of my savings out of a credit union or bank, I'm evading tax???

My point was, that if the government decide to target peoples savings directly or indirectly (as per the pension fiasco a few months ago) they'll get **** all off me. I never mentioned tax evasion.

If you think that 1.46% is a good return on your money when banks make between 5 and 10 times this by loaning it to the general public, off you go. BOI and AIB love people like you almost as much as they love people with 110%, 40 year mortgages.

I am not interested in what the banks are making, only in what I am making. Doing my sums, making 1.46% is much better than making 0%. If I find a better deal for me (2% was only used as an example, Northern Rock are offering 2.5% for instant access) I will take it. I might not like the profits the banks are making but I am not principled enough or stupid enough to put my money under the mattress and deny myself money just because they make better money.

Flex · 06-07-2011 02:51PM

ardmacha wrote: »

The government needs to look at the long term structure of public expenditure and revenue generation and direct its efforts towards moving toward that long term structure. These moves might not be immediate, as hasty action might do as much harm as good. So PS pay will not be increased for a long while, and probably the new scale people (-10%) will be the first to get increases. So by 2014 PS pay will have declined 10% relative to EU averages and 6% or so relative to Irish private salaries. In the meantime the CPA facilitates efficiencies. This will make things more or less appropriate on average and some sort of benchmarking process can be used to address issues that will arise. A long term sustainable structure will involve annual property taxes rather than those when you sell your house and these should be introduced forthwith. There are savings to be made here and there in relation to multiple tax allowances and welfare benefits, these changes should be made anyway.
This is a balancing act.

Pay rises are still being given via increments right now. The CPA is facilitating cost efficiency improvements (which is very good), but not actually reducing the cost of the bill, which is our real problem.

The fairest thing to do would be a fresh round of benchmarking were the aim is to achieve parity in pay between the private and public sectors. Based on the ESRI report stating the PS was overpaid on average by approx 23%, its safe to say that the above benchmarking exercise would achieve considerable savings. It would also be fairer on those in the upper pay levels of the PS who are probably being paid less than the private sector counterparts.

Regards the budget, Im extremely disappointed in Fine Gael. From my discussions with the local TD and councillors in my area I voted for them based on the fact we would have an economically right wing party in power who would focus on spending cuts rather than tax increases to close the deficit, and quit mollycoddling vested interests and recipients of exchequer funds at the expense of the country as a whole. Government has been making the right noises in the previous weeks regards state spending, they have to show that they mean it though.

Riskymove · 06-07-2011 02:52PM

Godge wrote: »

A few things to note:

That map only shows three-bed semis so not fully representative.
Hard to construct a tax on valuations in a dormant, falling market.
Concentration on the map of higher valuations in Labour strongholds means a politically more viable alternative will be looked at.

its also based on the idea of a property tax system based on house value

if we have learned anything, its not to have our tax system based on something that can change so rapidly

I would expect something more concrete that they can can rely on for some time

Riskymove · 06-07-2011 02:55PM

Flex wrote: »

Pay rises are still being given via increments right now. The CPA is facilitating cost efficiency improvements (which is very good), but not actually reducing the cost of the bill, which is our real problem.

as you mention the current CPA is not about pay rates, however, the reduction in the pay bill due to the reducing numbers in the PS outway the cost of increments

From my discussions with the local TD and councillors in my area I voted for them based on the fact we would have an economically right wing party in power who would focus on spending cuts rather than tax increases to close the deficit, and quit mollycoddling vested interests and recipients of exchequer funds at the expense of the country as a whole. Government has been making the right noises in the previous weeks regards state spending, they have to show that they mean it though.

Fine Gael are not in Govt

the FG/Labour coalition are

Godge · 06-07-2011 02:57PM

Riskymove wrote: »

its also based on the idea of a property tax system based on house value

if we have learned anything, its not to have our tax system based on something that can change so rapidly

I would expect something more concrete that they can can rely on for some time

Agreed, if we cannot base it on site value or site size until a longer term Land Registry arrangements is set up, there are a number of other options that would be better than property value

- sq. footage of property
- no. of rooms
- no. of bedrooms
- no. of bathrooms

Variations of these are used in other countries.

Budget Adjustment To Be Closer To €4 Billion

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