Leninhan Confirms he is inept and not suitable to hold the Finace ministry

Darsad

Lenihan has confirmed that the increase in VAT was a mistake and has cost the exchequer up to € 700 Million. Well i am sorry but this kind of acceptance or apology is simply not good enough and he should resign.
A primary school child could see what the increase in VAT would do when we have such an open, accessable and cheaper market up the road in NI. We will all now have to be burdened with extra tax in the April budget which may have been avoided had he and his dept adopted policies that would have allowed our retailers to compete with NI .

peasant

We'll just let his junior minister take over the resort :D:D

Sleepy

Didn't I read in the Sunday Business Post that he's now appointed a respected economist as an advisor?

Sorry, don't have time to dig out the article. Seems like a step in the right direction though why the Department of Finance don't have people capable of advising the minister on economic matters is a bit of a mystery to me...

diverdriver

The incompetance won't end there. Wait until they increase taxes and discover the tax take drops again as the economy goes back to black. It's already happening with small contractors asking to be paid in cash.

Fratton Fred

Surely a better bet would be for the government to be trying to get the euro back to a more normal level against sterling? We are not talking abot a few percent difference we are talking 50%

mayfire

The tax take is plummeting and shortly he will be remembered as the minister who closed Ireland.

RobFowl

At least he admits his mistakes. I'll grudgingly give him some respect for that

P. Breathnach

Darsad wrote: »

Lenihan has confirmed that the increase in VAT was a mistake and has cost the exchequer up to € 700 Million...

Citation, please.

Blazer

P. Breathnach wrote: »

Citation, please.

jesus man..do you even read the news?
It's all over the place since last week.

sunshinediver

Fratton Fred wrote: »

Surely a better bet would be for the government to be trying to get the euro back to a more normal level against sterling? We are not talking abot a few percent difference we are talking 50%

The Euro rate is set by the European central Bank, Not the Irish Government. They couldn't raise it even if they wanted to.

If anyone bothered to read the original article (available on irishtimes.com) instead of listening to the dublin media hype they would see that Lenihan stated the prime reason for people shopping in the North was the exchange rate, However he said that the raising of VAT in the South didn't help this. VAT was only increased by 0.5%. Sterling devalued by approx 20% in the last 8 months. Think about it.. :cool:

is_that_so

He's had a very steep learning curve and it was the wrong time for a lawyer to be taking on a job like this. Although he does not have a completely monopoly on poor performance, his arrogance in the budget last October makes him look like a complete fool now. Resignation in my view won't solve anything as there is really no-one competent who could take his place. Apart from Cowen he's the only one with "experience" in the job.

Darsad

P. Breathnach wrote: »

Citation, please.

http://www.independent.ie/national-news/lenihan-admits-vat-error-cost-us-8364700m-1673385.html

Sorry thought everybody had heard this !

P. Breathnach

Mathew Reilly wrote: »

jesus man..do you even read the news?
It's all over the place since last week.

So no citation, then?

It might be useful to examine what Brian Lenihan said, rather than rely on comment.

Darsad

sunshinediver wrote: »

If anyone bothered to read the original article (available on irishtimes.com) instead of listening to the dublin media hype they would see that Lenihan stated the prime reason for people shopping in the North was the exchange rate, However he said that the raising of VAT in the South didn't help this. VAT was only increased by 0.5%. Sterling devalued by approx 20% in the last 8 months. Think about it.. :cool:

Sorry but the .5 % increase just sent all the wrong messages and anybody who was sitting on the fence got off on the Northern side after the budget announcement. Maybe its not a resigning matter its probably more a sacking one. Had he reduced the vat rate we probably would not be looking down the barrell of a gun next month

Blazer

P. Breathnach wrote: »

So no citation, then?

It might be useful to examine what Brian Lenihan said, rather than rely on comment.

no citation
that's what google is for :P

P. Breathnach

Darsad wrote: »

http://www.independent.ie/national-news/lenihan-admits-vat-error-cost-us-8364700m-1673385.html

Sorry thought everybody had heard this !

Thank you. Of course I had heard about it, but I don't trust the commentariat.

This is the interesting bit attributed to Lenihan as a quotation: ""If I have one act of contrition -- I should not have interfered with the VAT rates. It was a mistake and the wrong thing to do. We have lost €700m in revenue going to the North."

If he uttered those sentences consecutively, then it might suggest that he sees the VAT increase as triggering cross-border shopping (I am wary of quotations from unscripted speeches at private events). If he believes that the VAT increase made any significant difference, then he should be condemned as an idiot. It put prices here up by about 0.4%, probably less as many traders absorbed the cost. People have been claiming that they get price differentials of the order of 30-50% in NI. The VAT change was a drop in the ocean. If it had not been imposed, do you think all that cross-border shopping would have been averted?

Raiser

Sleepy wrote: »

Didn't I read in the Sunday Business Post that he's now appointed a respected economist as an advisor?

Sorry, don't have time to dig out the article. Seems like a step in the right direction though why the Department of Finance don't have people capable of advising the minister on economic matters is a bit of a mystery to me...

That's just not good enough; lets stop accepting this kind of thing as satisfactory

- The fact is that a Transition Student from any school in the Country could be our Finance Minister if all they were required to do was:

Firstly:

Make mistakes borne of innocence, stupidity and being totally unsuited for and incapable of holding the position.

Then later on in a state of wild-eyed panic and utter desperation:

Hire a "respected Economist" at enormous expense so they could do their job for them.

Why not just give the "respected Economist" the job in the first place - then we'd be €700 million + Brian "Gobdaw" Lenihans annual wage better off and we wouldn't have to listen to him parrot back to us basic economic advice that every other Country has a qualified person taking care of.

Again; only in fcuking Ireland - can we not get anything right? Ever?

- And again - why does nobody ever have to resign? Why? Hows bad is too bad? How much is enough?

P. Breathnach

Mathew Reilly wrote: »

no citation
that's what google is for :P

It is customary, and useful, that when somebody here makes a claim about something, that they back it up with citations. This might be done on their own initiative, or in response to a request.

I am happy that Darsad recognises this convention.

ejmaztec

So, which economic adviser is he using since he sacked Robert Mugabe?

Sleepy

Raiser, I don't disagree. We shouldn't have someone in charge of the public finances who's not a respected economist.

Unfortunately, we're not in a position to restructure our government because turkeys don't vote for christmas.

CJhaughey

Sleepy wrote: »

Raiser, I don't disagree. We shouldn't have someone in charge of the public finances who's not a respected economist.

Unfortunately, we're not in a position to restructure our government because turkeys don't vote for christmas.

AFAIK the only person qualified for the job is Richard Bruton. I believe that he is an Economist by profession.
I am not saying that FG should rule, merely that out of all the politicians he is the only economist.
The others seem to be lawyers, barristers and other parasites professionals.

dave-higgz

Raiser wrote: »

The fact is that a Transition Student from any school in the Country could be our Finance Minister

I'm a transition year student!!!! :rolleyes: :pac: :cool:


€200k+ sounds about right!



No seriously though, Maybe I'm being overconfident but hell I don't think I'd do a worse job than Lenihan. I am the most respected politically minded person / economist in my year. I'd be happy earning less than 50k a year to serve my country and I wouldn't need no state car. Dublin Bus works fine for me!

P. Breathnach

P. Breathnach wrote: »

...If he uttered those sentences consecutively, then it might suggest that he sees the VAT increase as triggering cross-border shopping (I am wary of quotations from unscripted speeches at private events)...

Jimmy Guerin is on Liveline now: he says that he did not take notes at the dinner.

Without stronger evidence, I do not think that it is established that Lenihan links the increase in VAT with the level of cross-border shopping.

JonathanAnon

ejmaztec wrote: »

So, which economic adviser is he using since he sacked Robert Mugabe?

LOL, even Mugabe would have told him that raising the VAT rate was a bad idea.

ejmaztec

JonathanAnon wrote: »

LOL, even Mugabe would have told him that raising the VAT rate was a bad idea.

I think that their association came to an end when Robert advised him to get rid of all the white farmers.

sceptre

Mathew Reilly wrote: »

no citation
that's what google is for :P

Worth reading the forum charter with regard to citations or basic referencing. It's also (in general) best practice, polite and fair to other people. Completely reasonable to ask for them.

</side comment>

turgon

dave-higgz wrote: »

No seriously though, Maybe I'm being overconfident but hell I don't think I'd do a worse job than Lenihan. I am the most respected politically minded person / economist in my year.

Well Mr Lenihin might also be able to claim he is the most able economist among his peers, but considering his peers are FF'ers that would probably giving himself a lot less credit than you give yourself

Dannyboy83

http://www.rte.ie/news/2009/0315/brutonr.html

Ireland in economic grave


[URL="javascript:showPlayer('brutonr_av.html')"] [/URL] Sunday, 15 March 2009
Fine Gael's finance spokesperson has warned Ireland is in a very grave financial situation.
Speaking on RTÉ's This Week, Richard Bruton said the Government has to face up to reality.
He said while the world-wide economic recession is the main force behind the current situation here, the Government was totally unprepared for it and the impact has been far greater on Ireland than on any other European country.
Advertisement

However, Mr Bruton said it should be used as an opportunity to push through reforms and to totally reinvent Ireland.

Mr.Bruton reckons we are all knackered.
I'm not sure why I even read these reports anymore.

We'll have the rename the provences to Jones, Bonham, Plant & Paige and start a bit of devil worshipping.

Johnboy Mac

RobFowl wrote: »

At least he admits his mistakes. I'll grudgingly give him some respect for that

Not good enough, paying you respects for the 350,000 + umployed would be more like it!

nesf

Sleepy wrote: »

Sorry, don't have time to dig out the article. Seems like a step in the right direction though why the Department of Finance don't have people capable of advising the minister on economic matters is a bit of a mystery to me...

It's essentially a union problem. They oppose specialist grades, someone with a PhD in macroeconomics who would obviously be useful in the Department would be paid the same as anyone else which is problematic because why go to the trouble and expense of a PhD when they'd get the same pay as someone with only a degree? There are similar problems for IT people if I recall correctly.

Gareth Fitzgerald wrote an opinion piece on it a few months back in the Irish Times. The Department apparently has to borrow economists from the Central Bank and elsewhere to run models for them. Which is a terrible way to do things if you ask me.

stepbar

As far as I can see the increase in VAT was an easy mechanism on the Govs part to increase Tax. The opposite happened as people just went up the north to buy goods. More and more as the days go by, I think we should opt out of the euro and join the Sterling currency. Our economies are so intertwined that it would make sence on one level but perhaps on another level not so much (thinking about Iceland here).

Johnboy Mac

stepbar wrote: »

As far as I can see the increase in VAT was an easy mechanism on the Govs part to increase Tax. The opposite happened as people just went up the north to buy goods. More and more as the days go by, I think we should opt out of the euro and join the Sterling currency. Our economies are so intertwined that it would make sence on one level but perhaps on another level not so much (thinking about Iceland here).

So, why did we have the Punt and next the Euro?

nesf

stepbar wrote: »

As far as I can see the increase in VAT was an easy mechanism on the Govs part to increase Tax. The opposite happened as people just went up the north to buy goods. More and more as the days go by, I think we should opt out of the euro and join the Sterling currency. Our economies are so intertwined that it would make sence on one level but perhaps on another level not so much (thinking about Iceland here).

Honestly, people going North to shop had a lot more to do with the Euro/Sterling exchange rate than a 0.5% increase in VAT.

stepbar

Johnboy Mac wrote: »

So, why did have the Punt and next the Euro?

Because we were part of the EU

nesf wrote: »

Honestly, people going North to shop had a lot more to do with the Euro/Sterling exchange rate than a 0.5% increase in VAT.

Yep I agree, but the increase in ROI VAT (and decrease in Uk VAT levels) did not help TBH.

nesf

stepbar wrote: »

Yep I agree, but the increase in ROI VAT (and decrease in Uk VAT levels) did not help TBH.

Yes, but relatively few people will travel for a 5% discount. The present discount on buying Sterling goods up North is far in excess of this. Not that I agreed with a 0.5% increase in VAT or anything, in a recession they're better off targeting income with taxation in order to capture more money. That said, it was hard to see the depth and severity of this recession back when he made this VAT decision. 20/20 hindsight and all that.

Johnboy Mac

nesf wrote: »

Honestly, people going North to shop had a lot more to do with the Euro/Sterling exchange rate than a 0.5% increase in VAT.

+1

Going North to shop is a bit of a red herring, we've been shopping in the North for years when it was advantageous to do so and vise versa.

There is nothing incorrect politically or otherwise in doing so. We're in the E.C. for starters and it's good and proper to trade with our fellow Irishmen.

I noticed nobody mentioned this when millions of holidays are take abroad each year or when all the holiday homes were being purchased abroad.

The subject of shopping in North should be dropped no matter what lightweight Coughlan says - silly woman.

stepbar

nesf wrote: »

Yes, but relatively few people will travel for a 5% discount. The present discount on buying Sterling goods up North is far in excess of this. Not that I agreed with a 0.5% increase in VAT or anything, in a recession they're better off targeting income with taxation in order to capture more money. That said, it was hard to see the depth and severity of this recession back when he made this VAT decision. 20/20 hindsight and all that.

But in reality the discount was 3% as VAT rates went up by 0.5% here and down by 2.5% in the north. Coupled with the swing in exchange rates meant that there was a sale to be had in most northern towns.

nesf

stepbar wrote: »

But in reality the discount was 3% as VAT rates went up by 0.5% here and down by 2.5% in the north. Coupled with the swing in exchange rates meant that there was a sale to be had in most northern towns.

Yeah but you pay a fee on converting Euro to Sterling and there's the extra cost of driving to the North involved which was why I was saying you'd need more than a 5% discount before most people would shop in the North. If you're in a border county that's not a big deal but to draw large numbers of people you're talking about (ballpark) 10-15% at least of a discount before enough people will start doing it to severely effect things.

As is, as far as I know it's bigger than a 10% discount for people going North but being as far to the South as I am I obviously haven't gone up do my grocery shopping.

Johnboy Mac

Actually what should be discussed is why 'brains' Lenihan increased VAT and the UK decreased VAT. Talk about complete opposing management decisions. It really makes one wonder.

Johnboy Mac

stepbar wrote: »

Because we were part of the EU

Strange answer for somebody suggesting we should join Sterling. Why did we have the Punt?

dresden8

Johnboy Mac wrote: »

Actually what should be discussed is why 'brains' Lenihan increased VAT and the UK decreased VAT. Talk about complete opposing management decisions. It really makes one wonder.

They didn't want to be the party to raise income taxes, they wanted to hold onto the "low tax economy" thing.

The only problem is they were blinded by their political interests and failed at every step of the way to see what was blindingly obvious to the rest of us, and now they, and unfortunately us are backed into a corner. They're going to have to cut expenditure, services, social welfare and raise taxes all in one go.

Thoroughly incompetent.

ardmacha

The 0.5% on VAT made little impact on cross border trade. It was dwarfed by the 2.5% reduction in the North. Sterling changes meant that prices changed even if the VAT was the same, banks give you the new Sterling rate the next day, shops take months to reflect it in their prices, if they ever do. The problem is that people are buying cheaper groceries etc in the North which have zero VAT, because of uncompetitive pricing in the South. Now a 0.5% VAT increase wasn't going to help, some initiative is needed to promote competition. In fact Lenihan probably thought that the 0.5% would largely be absorbed by shops etc with the way things were going, and he may have been largely right, but the UK cut banjaxed things.

John_C

He should find an excuse to cut the speed limit on the M1 to 100kph. That would have a much bigger effect that the half a percent VAT increase.

Johnboy Mac

John_C wrote: »

He should find an excuse to cut the speed limit on the M1 to 100kph. That would have a much bigger effect that the half a percent VAT increase.

Not good thinking as our mpg would increase, thus less fuel purchased

zootroid

Johnboy Mac wrote: »

Actually what should be discussed is why 'brains' Lenihan increased VAT and the UK decreased VAT. Talk about complete opposing management decisions. It really makes one wonder.

I seem to recall a German minister rubbishing the UK's decision to reduce VAT, saying it would not stimulate demand. The point he made was that any reduction in VAT will not have a large enough effect. So while I think the government made a mess of the economy, I don't think increasing VAT by half a per cent made the slightest difference. The fall in sterling is the problem.

Butterbox

Regardless of the impact of the VAT differential, the UK drop in VAT was well flagged and the Irish government still went ahead with an increase. Incompetence is never more clearly demonstrated than when doing nothing would have been better.

P. Breathnach

Butterbox wrote: »

Regardless of the impact of the VAT differential, the UK drop in VAT was well flagged and the Irish government still went ahead with an increase. Incompetence is never more clearly demonstrated than when doing nothing would have been better.

So even if it made no difference, it was wrong?

This should be a non-story. The impact of the VAT change on cross-border shopping is infinitesimal. The loss of revenue is real, but would have happened anyway.

But it was written up by a journalist who left FF after failing to get a nomination to stand for them, and who now plans to run as an independent. He did not make notes of what Lenihan said, but represented certain words as being quotations. As journalism, it stinks.

The worrying thing is how many people believe this rubbish.

Darsad

P. Breathnach wrote: »

But it was written up by a journalist who left FF after failing to get a nomination to stand for them, and who now plans to run as an independent. He did not make notes of what Lenihan said, but represented certain words as being quotations. As journalism, it stinks.

The worrying thing is how many people believe this rubbish.

Thats maybe but it clearly sent out the wrong message and pushed people Northwards . We can have no confidence in Lenihan to deliver anything other than insular ill thought out and very poorly delivered floundering speeches ( both devised and written for him by his dept officials ) Leadership comes from the top and our trio are not leadership material by any stretch of the imagination.

P. Breathnach

Darsad wrote: »

Thats maybe but it clearly sent out the wrong message and pushed people Northwards ...

Frankly, I think that is rubbish. I have read and heard a great deal about people's motivations for shopping in NI. I have yet to hear anybody suggest that a margin of about 0.4% in prices was decisive -- except in discussions like this one, where people are seeking to make political points rather than economic, business, or consumer ones.

Darsad

P. Breathnach wrote: »

Frankly, I think that is rubbish. I have read and heard a great deal about people's motivations for shopping in NI. I have yet to hear anybody suggest that a margin of about 0.4% in prices was decisive -- except in discussions like this one, where people are seeking to make political points rather than economic, business, or consumer ones.

Im sorry but from what i have seen and heard on the ground the Vat rate was a very big factor in peoples decision to head North. Not everybody sits down and analysis or crunches the figures they just see one vat rate reducing and the other increasing and when you read and hear 6.5 percentage points difference in Vat rates you will automatically head for the cheaper region which admittedly is helped considerably by the curriency differential and the higher costs in the South.
They got it wrong as with many other things and they have as is their way fudged around an admittance of the fact. Will the others do any better I doubt it but perhaps a change at the top from within FF would make a difference.

Dannyboy83

I'm on the fence here.

I agree with P.Breathnach's point that Vat wouldn't be a be all/end all issue, but on the other hand I think this is just more of the same blatant hypocrisy from Fianna Fail, and the main reasons that people are going North to shop is as a result of this very same hypocrisy and failure to act/acting to fail.