Cost of living

ART6

I'm not sure if this has been done before. If it has then I'll go back down my hole. However....

The papers seem to be full nowadays of how the cost of living has rocketed in the last two years or so, and the consensus seems to be that it is the fault of (a) Brian Cowen or/and (b) the EU. Brian should "DO SOMETHING ABOUT IT".

Fuel prices have escalated as the price of crude oil has. Food prices have surged due to a shortage of basic foodstuffs, partly blamed on the Green Lobby's demands for bio fuels where countries are now growing biofuels instead of food (the law of unexpected consequences?).

The government is being told that it could deal with the situation, at least in Ireland, by reducing tax and duty on fuels and by reducing VAT. The argument is that doing so would stimulate the economy and get us out of the self-dug hole. I believe the tabloids call it "doing a McCreevy".

The EU does not have the same problem. Food prices are much less in many other EU countries, so the Union has no reason the get too excited about the problems of a small island on the periphery.

So, what's the general opinion? Can the Government really do anything about it bearing in mind that they are presiding over a significant budget deficit and need all the extra taxes they can squeese from the lemon? What should Brian do?

Imposter

That's not really true about the rest of Europe. Prices may be lower than Ireland but they are rising rapidly with the high fuel prices.

silverharp

ART6 wrote: »

So, what's the general opinion? Can the Government really do anything about it bearing in mind that they are presiding over a significant budget deficit and need all the extra taxes they can squeese from the lemon? What should Brian do?

the gov is responsible for alot of the inflation here, so the first canditate should be to cut spending. I deal with some some gov. organistaions in my job and I must say organisations like FAS are grossly innefficient and self serving. other then that don't borrow and dont raise taxes.

eoin5

I saw a council worker paint a bin and then literally sit and watch the paint dry for hours before painting the gold stripes to finish it off. We pay for that. We also pay greedy business people who profit on the back of our useless public services. This country needs a giant kick up the hole.

The_Minister

AFAIK food is already VAT free in Ireland.

Also, without competition, any decrease in the VAT on goods would most likely lead to the shops just taking the difference. They (briefly) tried it before, and it failed AFAIR.

IRLConor

The_Minister wrote: »

AFAIK food is already VAT free in Ireland

Some food is 0%, some 13.5% and some 21%. Here are some examples from the biscuit section of the list that the Revenue publish on their website:

Category|VAT Rate|Comment
Food, Biscuit Assortment|13.5% or 21%|Where the weight of the chocolate biscuits does not exceed 15% of the total weight of the assortment then 13.5% applies.
Food, Biscuits - Chocolate|21%|
Food, Biscuits - Chocolate Chip|13.5%|
Food, Biscuits - Chocolate Mallow Tea Cakes|21%|
Food, Biscuits (Non-chocolate)|13.5%|

1. Other than choc. covered or decorated or choc. substitute.See Schedule
2. Zero % on certain baby biscuits(liga etc.)
3. Value of moisture content-up to 12%-per State Chemist.Over that value applies to cakes.

It must be a right pain in the arse for shopkeepers.

The_Minister

Can you cite the source?

I'd like to have a look, at that, that seems rediculously complicated.

guinnessdrinker

The price of food issue is difficult to sort out quickly.

As the world's economy increases, the demand for food will increase. Someone pointed out that a lot of land previously used to grow food is now used to grow biofuel so there may be a scarcity of good land (unbelievable but possibly true) to grow food on for the increasing global population.

In the future I think we will as a nation have to be a lot more self sufficient in food production. As other countries are going to want to use their own resourses for themselfs or to sell to the highest bidder.

So, I can't really see the price of food drastically decreasing unfortunatly. I seen a report on the news a few weeks ago about food scarcity and how food was rationed during WWII, worst case scenario, in a couple of decades there could be a reintroduction of rationing for certain food items, unless we start to learn how to be more resourseful in the short term.

IRLConor

The_Minister wrote: »

Can you cite the source?

I'd like to have a look, at that, that seems rediculously complicated.

http://www.revenue.ie/services/tax_info/vatrate/vatrate.htm

It's quite mad. There are different VAT rates on hot and cold takeaway meals. Does that mean if your pizza arrives late you're entitled to a VAT refund?

The_Minister

LOL, there's me laying altraps on the road to slow the delivery guy down.:D

sovtek

ART6 wrote: »

What should Brian do?

Brian should get the competition authority to raid pretty much every industry in ireland and break up the cartels that pass for businesses here. That'd be a start

ART6

sovtek wrote: »

Brian should get the competition authority to raid pretty much every industry in ireland and break up the cartels that pass for businesses here. That'd be a start

I'm begining to think you have a point. Since my original post I have been reading about how the UK companies trading here are charging us anything up to 50% more in real terms for goods than they charge in the UK. Fact remains, however, that business charges for its products what the market will bear, and irish people have been prepared to pay excessively for too long.

As long as we all flock to Tesco instead of the local shop for our groceries I suspect this will continue whatever Brian does.

silverharp

ART6 wrote: »

however, that business charges for its products what the market will bear, and irish people have been prepared to pay excessively for too long.

As long as we all flock to Tesco instead of the local shop for our groceries I suspect this will continue whatever Brian does.

irish people are not price consious so we are easy pickings. however local shops are even more expensive. maybe a bit of negitive equity will encourage a saving culture again , and not a continual debt binge

oscarBravo

silverharp wrote: »

however local shops are even more expensive.

Surprisingly, this doesn't seem to be the case.

IRLConor

oscarBravo wrote: »

Surprisingly, this doesn't seem to be the case.

My nearest shops which stock food are Tesco, Spar and Donnybrook Fair. I'd really love if Donnybrook Fair (arguably the most "local") was the cheapest.

What are these "local shops" people are talking about which are cheaper? Anywhere I've lived the local shops have tended to be substantially more expensive for food than a supermarket.

ART6

oscarBravo wrote: »

Surprisingly, this doesn't seem to be the case.

Our local village shop and PO is generally little more expensive than the large stores, and for many items is the same price or cheaper. That's why I shop there as much as I can, particularly now that fuel is so expensive. By the time I have driven 8 miles to Tesco I will have used up much if not all of the price savings I get from them over the local guy.

jmayo

The Sunday Business Post had interesting article showing how much we are being ridden in this country.
Sorry but I can't describe it any other way.

http://www.sbpost.ie/post/pages/p/story.aspx-qqqt=NEWS-qqqs=news-qqqid=32988-qqqx=1.asp

Recently I was pricing two Creative MP3 players.
One of them had a price differential, between high street store in Dublin shopping centre and what was available on the web, of the order of 33%.
Now that is one hell of a difference and can't surely all be down to staffing costs and tenancy costs.

Some people think the likes of Argos is ok but why are their prices much higher in Ireland than UK?
Has anybody asked why Easons have not decreased the prices of imported British magazines even though the currencies are almost on parity in comparison to a year ago?

The sad thing out of the above newspaper article, is that the only advice to consumers is to boycott the offenders, but from my experience that includes just about everyone.
Maybe when the downturn really hits home will enough people become price consious again and will these shops get the kick in the ar** they richly deserve.

guinnessdrinker

In a lot of cases the demand for goods mean the price stays high. Shops know people will pay for the goods so they don't feel the need to lower them. In other cases it could be described as too much money chasing too few goods, which is a contributer to inflation.

As the money supply dries up, the price of goods will come down because there will be less demand.

It is in the consumer's interest to shop around but in reality that is sometimes easier said than done. If anyone notices a lack of competition or suspects a cartel they could contact these guys. Not sure how effective they are but they may be able to do some sort of investigation into an issue.

Tea drinker

IRLConor wrote: »

My nearest shops which stock food are Tesco, Spar and Donnybrook Fair. I'd really love if Donnybrook Fair (arguably the most "local") was the cheapest.

What are these "local shops" people are talking about which are cheaper? Anywhere I've lived the local shops have tended to be substantially more expensive for food than a supermarket.

Wow - Donnybrook fair is a pretty expensive example! But good quality at least. Spar etc are expensive but OTOH are open late.

Food costs will contibue to go up same as oil / energy costs. We should keep all our gas / oil deposits until we can get decent money for them.
We have house prices coming down so that is excellent news for the economy. (Despite all the government efforts to keep high cost housing)
If we can get them down a bit more at least the following generation will get a fresh start.

ART6

Tea drinker wrote: »

Wow - Donnybrook fair is a pretty expensive example! But good quality at least. Spar etc are expensive but OTOH are open late.

Food costs will contibue to go up same as oil / energy costs. We should keep all our gas / oil deposits until we can get decent money for them.
We have house prices coming down so that is excellent news for the economy. (Despite all the government efforts to keep high cost housing)
If we can get them down a bit more at least the following generation will get a fresh start.

Couldn't agree more TD. If the big deveoplers and banks get a hiding maybe my son and his wife will be able to afford a home of their own, and maybe Mr. Tesco et al will stop trying to inflate our food prices to 150% of those they charge in the UK. We also need to stop our so-called government giving away our small oil deposits for peanuts and do a UK -- get our pound of flesh. We are a little country, but we need to start kicking big time.

silverharp

ART6 wrote: »

We also need to stop our so-called government giving away our small oil deposits for peanuts and do a UK -- get our pound of flesh. We are a little country, but we need to start kicking big time.

can I ask a question, how much oil has been produced in Ireland? and how much have oil companies spent in exploration? remember that there is a shortage of resources in the oil industry so if the gov. makes it unattractive, no money will be invested.

ART6

silverharp wrote: »

can I ask a question, how much oil has been produced in Ireland? and how much have oil companies spent in exploration? remember that there is a shortage of resources in the oil industry so if the gov. makes it unattractive, no money will be invested.

How much oil? None to speak of to date I imagine, but from what I read in the media there is an expectation of fairly substantial quantities in the near future. Also, again only from what I read, our government did a very bad deal on it but I freely admit to knowing very little about it. But still, the UK did very well out of North Sea oil and their taxes didn't dissuade the oil companies from drilling, did they? However, I take your point silverharp.

Fleming15

You lot are missing the point.

We are in the transition from one way of life into another.

That is why we have manufactured crisis after manufactured crisis.

"Order out of Chaos"

Read "the first global revolution".

Tells you all you need to know.

http://www.scribd.com/doc/2297152/Alexander-King-Bertrand-Schneider-The-First-Global-Revolution-Club-of-Rome-1993-Edition

Tea drinker

I'll check your link later fleming... I guess it's something along the lines of the little people being manipulated by higher powers, either gov or corp for profit? E.g. expect water to get expensive?

As regards the oil, silverharp - who cares if no money is invested? Isn't it better to keep that oil or gas in the ground until we CAN ask a decent price for it? as it happens the margin has been raised this past budget (I think) but before it was so low it probably cost us money to have it taken from us (provision of services/infra to these companies).
Unless of course we don't say what happens in our own country - that couldn't happen, could it?

At this stage, TBH, only reform (of public and private business) will see protection for the majority of people. Cowen seems somewhat willing to tackle the public systems, given that there is only one answer it's difficult NOT to make this choice.

Looks like we are in for a long, steady increase in living costs, and heavy extra taxes would worsen this substantially, to the point of the the R word.

lostexpectation

droughts in australia etc are having a much bigger effect then biofuels.

anywhay coughlan told us to shop around

CerebralCortex

IRLConor wrote: »

Some food is 0%, some 13.5% and some 21%. Here are some examples from the biscuit section of the list that the Revenue publish on their website:

Category|VAT Rate|Comment
Food, Biscuit Assortment|13.5% or 21%|Where the weight of the chocolate biscuits does not exceed 15% of the total weight of the assortment then 13.5% applies.
Food, Biscuits - Chocolate|21%|
Food, Biscuits - Chocolate Chip|13.5%|
Food, Biscuits - Chocolate Mallow Tea Cakes|21%|
Food, Biscuits (Non-chocolate)|13.5%|

1. Other than choc. covered or decorated or choc. substitute.See Schedule
2. Zero % on certain baby biscuits(liga etc.)
3. Value of moisture content-up to 12%-per State Chemist.Over that value applies to cakes.

It must be a right pain in the arse for shopkeepers.

Food hee, hee

silverharp

Tea drinker wrote: »

As regards the oil, silverharp - who cares if no money is invested? Isn't it better to keep that oil or gas in the ground until we CAN ask a decent price for it? as it happens the margin has been raised this past budget (I think) but before it was so low it probably cost us money to have it taken from us (provision of services/infra to these companies).
Unless of course we don't say what happens in our own country - that couldn't happen, could it?

firstly, there are no proven/recoverable reserves, you need to find the stuff first, hence you need to make it attractive to companies to take the RISK. there is no North Seas off the coast of Ireland, if there is oil it will be in deep water and it will be very expensive to find and recover so either the state puts up the money or it encourages the oil companies to come here.BTW I'm of the opinion that Corrib should be bought out and plugged as a reserve and Kinsale should be refilled if technically possible for the same reason.

Blush_01

IRLConor wrote: »

Some food is 0%, some 13.5% and some 21%. Here are some examples from the biscuit section of the list that the Revenue publish on their website:

Category|VAT Rate|Comment
Food, Biscuit Assortment|13.5% or 21%|Where the weight of the chocolate biscuits does not exceed 15% of the total weight of the assortment then 13.5% applies.
Food, Biscuits - Chocolate|21%|
Food, Biscuits - Chocolate Chip|13.5%|
Food, Biscuits - Chocolate Mallow Tea Cakes|21%|
Food, Biscuits (Non-chocolate)|13.5%|

1. Other than choc. covered or decorated or choc. substitute.See Schedule
2. Zero % on certain baby biscuits(liga etc.)
3. Value of moisture content-up to 12%-per State Chemist.Over that value applies to cakes.

It must be a right pain in the arse for shopkeepers.

As far as I know: Basics are VAT free. Luxury goods are 21%. The things that fall between (like plain biscuits - you don't need them, so they're not basics, but they're not chocolate covered and so aren't luxury products) are 13.5%. In the same way, if you buy a fitted kitchen, you pay 21% VAT on the kitchen, and 13.5% VAT on the service cost for fitting it.

Almost forgot, all baby products (foods, toiletries, clothing, shoes etc.) are supposed to be VAT free.

juuge

The biggest scandal of the lot is petrol & diesel prices.
As soon as there is a mention of stock-exchange oil prices rising the local garages are out there on their little step-ladders putting up their prices the next day. I've been noticing the three or four petrol stations that I pass each morning on my way into work and each one is increasing their prices for both petrol and diesel every couple of days. This is just profiteering. Increased fuel prices affect everyone so I believe we need to have the government intervene and fix the price of fuel and stop these greedy b*asta*ds making a quick buck !.

silverharp

juuge wrote: »

The biggest scandal of the lot is petrol & diesel prices.
As soon as there is a mention of stock-exchange oil prices rising the local garages are out there on their little step-ladders putting up their prices the next day. I've been noticing the three or four petrol stations that I pass each morning on my way into work and each one is increasing their prices for both petrol and diesel every couple of days. This is just profiteering. Increased fuel prices affect everyone so I believe we need to have the government intervene and fix the price of fuel and stop these greedy b*asta*ds making a quick buck !.

this is pure opinion which I assume is based on little knowledge of how the oil industry or trading markets work. as for your solution , the Chinese tried that recently and there were fuel shortages soon after.

Tea drinker

Looks like Brian Cowen is taking some affirmative action. Don't have a linky yet but he made a statment to the effect the will be entering correspondence with UK suppliers to explain the disparity between Irish and UK prices. And exacting some leverage if they don't get a suitable response

Well done.

SkepticOne

juuge wrote: »

Increased fuel prices affect everyone so I believe we need to have the government intervene and fix the price of fuel and stop these greedy b*asta*ds making a quick buck !.

The Mugabe solution

juuge

SkepticOne wrote: »

The Mugabe solution

lol.:)
Yeah maybe you're right, let them charge whatever they like, we will pay it anyway. Who said the paddys are thick?

Time Magazine

sovtek wrote: »

Brian should get the competition authority to raid pretty much every industry in ireland and break up the cartels that pass for businesses here. That'd be a start

The Competition Authority are desperately underfunded. The government do not feed the mouth that bites them: the Authority would (I expect) be far more critical of government policy if they had the resources to fully investigate them.

juuge wrote: »

The biggest scandal of the lot is petrol & diesel prices.
As soon as there is a mention of stock-exchange oil prices rising the local garages are out there on their little step-ladders putting up their prices the next day.

God forbid that retailers raise prices when costs increase.

Retailers can't help that increased demand from China and India have made oil prices rise.

I've been noticing the three or four petrol stations that I pass each morning on my way into work and each one is increasing their prices for both petrol and diesel every couple of days.

That's because the price they're paying is increasing every couple of days.

This is just profiteering.

No it's not.

Increased fuel prices affect everyone so I believe we need to have the government intervene and fix the price of fuel and stop these greedy b*asta*ds making a quick buck !.

There is only so much oil to go around. China want more. If they're willing to pay more than us for a barrel, who do you think Saudi will sell to? If the government intervene, we'll have no oil.

Oil is running out. Prices are rising. Deal with it.

juuge

Antithetic wrote: »

Oil is running out. Prices are rising. Deal with it.

You are so naive it’s really frightening !
Our local garages get a tanker of petrol/diesel delivered every two to three weeks and the price to the consumer goes up every couple of days. Amazing how you can’t understand this – then again perhaps you have a vested interest.;)

edanto

If your local garage man doesn't charge the increasing price - as opposed to the price that he paid for it - how will he be able to fund his next delivery at the high price?

As far as the cost of living - and whether we'll ever return to low oil and food prices - I would bet a mortgage that the answer is no. Such a huge proportion of world oil gets used in food production - between farm machinery, pesticide, fertiliser, refrigeration & transport, when oil runs out our food production strategy is in trouble. There's just no possibility of a return to the period of plenty at the end of the last century.

Of course, as ever, we're shielded from the worst of it. Take Haiti for example - there people can spend up to 80% of household income on basic foodstuffs so they've been hit a lot harder by the increasing prices.

As to what Cowen and us should do here - well, it would be great if they funded The Competition Authority properly, but as Anti pointed out that's unlikely for political reasons. It's not the governments responsibility to lower prices. It's yours and mine.

A few times lately, I've made a point of refusing to buy something when it was just ridiculously expensive. Not being rude, just if the price for something isn't clear, asking someone that looks like a manager 'what price is this, please?' and then deciding to buy it or not depending on the price instead of just paying for it and giving out online.

If we want cheaper prices, shop owners have to hear from their managers that people are refusing to buy things and they have to notice a drop in sales. That will never happen unless you, your family and friends and thousands of others decide to change things with their own mouths and feet.

Time Magazine

juuge wrote: »

You are so naive it’s really frightening !

Someone calling for price control on an vital imported good calling me naïve? Heh!

Our local garages get a tanker of petrol/diesel delivered every two to three weeks and the price to the consumer goes up every couple of days. Amazing how you can’t understand this

Do you think rising oil prices are due to increased demand or greed? The actual price of oil changes several times each day. I'll try make it simplistic. Oil is essentially auctioned off to wholesalers. When China and Inida require more oil with a fixed supply, the price goes up. Surely you accept that these price rises will ultimately be borne by the consumer. Let's say retailers can change their prices daily or whenever they get deliveries. Daily price changes are better. Say there are two petrol stations that each get deliveries once a month, one on the 1st and the other on the 15th. The price of oil is constantly rising. If on the 15th of the month Number 2 ups his price, it will be higher than what Number 1 is charging because oil was cheaper two weeks ago. So nobody is buying from Number 2 until the 1st of next month when Number 1 ups his price even further. This isn't in the interests of consumers because if everyone goes the Number 1, he will run out of oil quicker and perhaps run out of oil. So everyone then goes to Number 2 anyway. It's a simple problem of unsustainable prices. The net effect - I'll find you a paper that shows this mathematically if you really want and if I have the time - is, believe it or not, consumers ultimately pay in accordance with the price raises from the manufacturer. But we'd already accepted that the consumer is going to pay, so that's not surprising. It's not surprising that you can't "cheat the market" by holding prices constant for a while. If you extend the analysis to a more realistic world where there are many petrol stations, say 30, each getting a delivery once a month, you'll have prices changing every day anyway. Again, you can't "cheat the market" with price stickiness. It's far, far, far better to just have prices reflecting reality. It's going to happen anyway.

then again perhaps you have a vested interest.;)

Yes, I'm an oil merchant. This has nothing go to do with basic economics whatsoever. I am solely trying to ensure the government don't introduce price controls because I will personally profit from it.

Well... I guess that's a more reasonable thing to suggest than limiting prices.

sovtek

Tea drinker wrote: »

Looks like Brian Cowen is taking some affirmative action. Don't have a linky yet but he made a statment to the effect the will be entering correspondence with UK suppliers to explain the disparity between Irish and UK prices. And exacting some leverage if they don't get a suitable response

Well done.

While that's welcome...its not that brave. If he really wanted to do something he would start asking tough questions from businesses here at home. It's the Irish businesses that have been screwing us for far too long.
First stop IMHO is the VFI.
For those who suggest it's up to us to vote with our feat...that ignores the reality of the "island" economy. There is often no choice and the government does absolutely nothing to bust up price fixers and gougers.

edanto

sovtek wrote: »

For those who suggest it's up to us to vote with our feat...that ignores the reality of the "island" economy. There is often no choice and the government does absolutely nothing to bust up price fixers and gougers.

But we live in a capitalist society! Price controls are a slippery slope and given the toothlessness of the TCA and the inherent difficulties in proving price fixing (I imagine they don't take minutes of the meetings) - the state systems are practically powerless.

Of course - personally I would have a preference for a very different type of society, with a different type of corporate entity. But I'm not advocating that here, I'm just suggesting how to deal with the increasing cost of living given the capitalist society in which we live.

You say there often is no choice - and I say there is always a choice. If you think something is too expensive, don't buy it. But, but... I want it. Well, that's exactly what the shops are trying to find - the maximum that you will pay for something that you want. As long as you go back to buy it again, they're laughing all the way to the bank.

And there's no use giving out about what they charge!! It's us that pay it - we have the problem and the power to solve it.

sovtek

edanto wrote: »

But we live in a capitalist society! Price controls are a slippery slope and given the toothlessness of the TCA and the inherent difficulties in proving price fixing (I imagine they don't take minutes of the meetings) - the state systems are practically powerless.

Its not that difficult. Hell the VFI have said that they would discount prices if the tax was lowered. Thats proof right there. What's lacking is a will to do anything about it and I put that down to corruption. The State already controls prices anyway.

You say there often is no choice - and I say there is always a choice. If you think something is too expensive, don't buy it. But, but... I want it.

Yes I want things like food, clothes, accomodation and hygene products.

Well, that's exactly what the shops are trying to find - the maximum that you will pay for something that you want. As long as you go back to buy it again, they're laughing all the way to the bank.

...and handing the government brown envelopes to make sure they don't do anything to make sure there is healthy competition and consumer advocacy. Ireland is the only country I've ever been in that doesn't have a consumer watchdog program much less a body doing it.

And there's no use giving out about what they charge!! It's us that pay it - we have the problem and the power to solve it.

So if we don't give out about it exactly how do we have the power to solve it?

lostexpectation

are they no day to day supermarket groceries comparison sites for ireland,can't find any

is_that_so

http://www.consumerconnect.ie/eng/News_+_Research/Research/
But no day to day stuff, just quarterly I believe.

lostexpectation

is_that_so wrote: »

http://www.consumerconnect.ie/eng/News_+_Research/Research/
But no day to day stuff, just quarterly I believe.

yeah really not good enough,

apparently we're all whingers (according to lenihan was it)