So then, to which year's living standards are we about to roll back?

hatrickpatrick

And no sensationalism doom and gloom or anything like that please, I'm wondering if anyone actually has facts about where our public expenditure is going to go, and if they could cite the most recent year that it has indeed been that low while taxes have been quite high.

In other words, what era are we going back to in terms of living standards?
I keep hearing 2002 being bandied around (spending is still at 2007 levels while revenue is at 2002 levels) which I can't help thinking wasn't exactly a horrible year in terms of living in Ireland, right?

oppenheimer1

05/06. We will be going back to 2006 income tax levels for sure.

bhovaspack

Very subjective, I suppose, since it depends on whether you keep your job or not. Or get one in the first place. A graduate in a particular discipline emerging from university in 2012 might have only a 20 per cent chance of securing employment in chosen field, compared to a graduate in the same discipline having an 80 per cent chance in 2006. Whatever about the relative drop in standard of living for the lucky 20 per cent, the 80 per cent that don't get the jobs they are qualified for will almost definitely be a lot worse off.

Dannyboy83

Impossible to say, but we are going to deflate by 25-50% over the next 4 years.
No matter how we do it, through cuts or tax increases, we need to close a 20 billion gap.
All you can say is that it's going to be horrific.
Can't be more specific cause there are too many unknown variables.

Noffles

As was said on the BBC news a few days ago, "there was a time that when you travelled to Ireland you would turn your watch back 200 years when you got off the boat...."

At least when all this has kicked off and you're in the middle of it, when visitors arrive they can simply turn the clock back 30 years.... progress..no?

Leiva

Hopefully 1998 when we had sense ...

Scary accurate video from 1998 .

https://www.youtube.com/watch?v=a37sRjkLtWw

keithclancy

IMO its all relative.

Irish Person:
Have to buy a house.
Have to get a new car, or at least a car less than 4 years old.
Shop in tesco.
Holiday in a hot country every 6 months.
I don't have enough money for that - I'll get a loan

German Person:
Will not even consider buying a house until they have 20% saved up even then thats not the norm, most people rent.
If they need a car for work they lease it and write it off in tax, other than that a car is a luxury, buy a 10 year old car and keep it well maintained.
Shop in Netto, Aldi, Lidl, Penny Markt etc.
Holiday somewhere 30 miles away i.e. camping, hiking trip etc.
I don't have enough money for that - I cannot afford it.


In short, you do not need to spend more to have a good quality of life, you don't need to buy 'stuff' like Android phones, flat screen tvs, sky HD, designer clothes, go to the pub 3 nights a week etc.

I think the mentality needs to change.

I moved away from Ireland over 3 years ago and because we had no safety net we couldn't afford to risk any debt. So besides a mortgage, I have no debt whatsoever, no Credit card bill, no Car loan, no personal home improvement loans, no Hire purchase agreement.

Debt is a killer I think.

I have Freesat (which is free) I bought a new TV when my old one broke, bought my car when I had the money in the bank and we furnished our house mostly from IKEA.

I mean we were living in Holland for 3 months on an Airbed our first place we rented had no furniture, which is normal. We had to buy what we could afford when we could, but never bought anything on credit.

Today I think we have a good quality of life, even though my Net pay is much lower than it would have been in Ireland.

Fat_Fingers

Keithclancy i’m going to shock you now but large numbers of us who stayed in Ireland contrary to your belief did not buy expensive houses, expensive cars, luxury items and gone to holidays every 6 months. Yes, we too have Freesat instead of Sky and for Irish TV we use free DTT or analogue.

dan_d

At worst, I think 2000.

Let's face it, we're not heading back for famine times.I've said it before here - bit of perspective wouldn't go amiss.

As someone who's unemployed, I can safely say my living standards are now around 1999 ish anyway. When I was 16 and had no money at all. I'm right back there, but with a rather large loan to a bank to pay for where I live, and not worrying about my leaving cert.:D

So.....all in all, anything's got to be better than this.

keithclancy

Fat_Fingers wrote: »

Keithclancy i’m going to shock you now but large numbers of us who stayed in Ireland contrary to your belief did not buy expensive houses, expensive cars, luxury items and gone to holidays every 6 months. Yes, we too have Freesat instead of Sky and for Irish TV we use free DTT or analogue.

I never said everyone did Fat Finger, however the majority do.
Thats why its called a property bubble, the houses people were buying over the past 5 - 6 years were incredibly expensive. I looked at purchasing a house even in crappy areas of Cork and they just were not worth it, nor where they even affordable for myself

People were getting deposits from their Parents or via a Credit Union loan in alot of cases. And in alot of those cases, they were hoping to flip the house in a few years for a few thousand euros.

However if you do not have debt then I do not think that a cut in your monthly net income will be that hard to adjust too. The spending power of everyone will be reduced hence the price of day to day goods will be reduced.

Its the people with high interest debt that will feel it the most.

I'm not calling anyone a fool here and I really do feel sorry for the people who have fallen on hard times, but in alot of cases I see, its money disappearing out of the account every month on stuff they do not need, coffee in the Petrol station, lunches in town, not having a tolltag, not shopping around for diesel, setting a timer on the thermostat in their house etc.

In short, do not spend money which you do not have, to avoid the former, have savings.

Fat_Fingers

Keith i do agree with everything you said exept

The spending power of everyone will be reduced hence the price of day to day goods will be reduced.

We import everything except the butter and milk so i don’t see price of goods going down. When comes to services due to increased taxation and levies cost of services provided by the State will only go up rather than down.

lmimmfn

Fat_Fingers wrote: »

Keith i do agree with everything you said exept We import everything except the butter and milk so i don’t see price of goods going down. When comes to services due to increased taxation and levies cost of services provided by the State will only go up rather than down.

exactly, its really the Euro that sets the lowest price possible on imported products though. Anything locally produced will get cheaper but the price of anything imported will not change or if it does will only be a slight reduction

harsea8

Surely the bulk of the goods imported here are from the UK, no? If so, won't they simply have to (eventually) reduce the euro price on these UK goods in order for anyone to buy them? For example, if we all end up with a 30% reduction in disposable income, and hordes of shoppers move from Tesco to Lidl/Aldi, Tesco will have to either leave Ireland or reduce it's margins by reducing costs...or am I living in fairytale land?

keithclancy

Fat_Fingers wrote: »

Keith i do agree with everything you said exept We import everything except the butter and milk so i don’t see price of goods going down. When comes to services due to increased taxation and levies cost of services provided by the State will only go up rather than down.

I'm sure we still grow potatoes ?

Items sold into regions are priced based on purchasing power also. At the end of the day a company will sell items at a lower price because they simply wouldn't sell otherwise. Cars for example in Ireland are cheaper than in other countries (Netherlands/Germany)

Another example would be clothes, they usually have a price variation based on the region sold.

Alot of fruit and veg comes from the mediterranean anyway and the Northern European countries have to import from there anyway.

If you look in the Rip off Ireland forum, the price differences between the North and South of Ireland for products, it has been consistantly brought up that Irish Retailers cost more then their northern counterparts because they have to factor in employee wages, insurance, rent etc into the cost. This will also change when the minimum wage is reduced and rents + property value drops

End of the day its not about the manufacturing price of a product, its the margin thats made by each part of the chain and how much it costs for that part of the chain to operate at a profit.

WalterMitty

PRivate sector-> back to mid to late 90s.
Public sector back to mid 2000s (because becnhmarking only goes one way.)
The mountain of debt on the country will slow growth for decades.

Rabble Rabble

WalterMitty wrote: »

PRivate sector-> back to mid to late 90s.
Public sector back to mid 2000s (because becnhmarking only goes one way.)
The mountain of debt on the country will slow growth for decades.

I wouldnt be so sure about that. In terms of going back to 1998, private sector salaries of people who are employed in the tradable export sector wont go back that far - the pain will be spread more amongst people who depend on the Irish consumer.

Rabble Rabble

keithclancy wrote: »

IMO its all relative.

Irish Person:
Have to buy a house.
Have to get a new car, or at least a car less than 4 years old.
Shop in tesco.
Holiday in a hot country every 6 months.
I don't have enough money for that - I'll get a loan

German Person:
Will not even consider buying a house until they have 20% saved up even then thats not the norm, most people rent.
If they need a car for work they lease it and write it off in tax, other than that a car is a luxury, buy a 10 year old car and keep it well maintained.
Shop in Netto, Aldi, Lidl, Penny Markt etc.
Holiday somewhere 30 miles away i.e. camping, hiking trip etc.
I don't have enough money for that - I cannot afford it.


In short, you do not need to spend more to have a good quality of life, you don't need to buy 'stuff' like Android phones, flat screen tvs, sky HD, designer clothes, go to the pub 3 nights a week etc.

I think the mentality needs to change.

I moved away from Ireland over 3 years ago and because we had no safety net we couldn't afford to risk any debt. So besides a mortgage, I have no debt whatsoever, no Credit card bill, no Car loan, no personal home improvement loans, no Hire purchase agreement.

Debt is a killer I think.

I have Freesat (which is free) I bought a new TV when my old one broke, bought my car when I had the money in the bank and we furnished our house mostly from IKEA.

I mean we were living in Holland for 3 months on an Airbed our first place we rented had no furniture, which is normal. We had to buy what we could afford when we could, but never bought anything on credit.

Today I think we have a good quality of life, even though my Net pay is much lower than it would have been in Ireland.

Your credit rating is - despite all this prudence - probably in the gutter. It depends on the country, in most countries you have to earn the ratings ( i.e. paying off a credit card).

You can either handle these things or you cant. I never spend more than I earn in any month - bar possibly december - but I use credit cards online, and elsewhere where I can. I pay them off monthly.

keithclancy

Rabble Rabble wrote: »

Your credit rating is - despite all this prudence - probably in the gutter. It depends on the country, in most countries you have to earn the ratings ( i.e. paying off a credit card).

You can either handle these things or you cant. I never spend more than I earn in any month - bar possibly december - but I use credit cards online, and elsewhere where I can. I pay them off monthly.

I have a credit card .. I just never have an outstanding amount on it.
Mainly for buying flights and renting cars.

In Germany a Credit card functions like a Debit card with a 100% deduction from your account at the end of the month.

ardmacha

PRivate sector-> back to mid to late 90s.
Public sector back to mid 2000s (because becnhmarking only goes one way.)

PRivate sector-> back to 2006 or so on average, huge variation in around this average. Many will have pay cuts less than the inflation drop and others not much more, but some more taxes to be paid. Some will lose all private income.

Public sector back to mid 2004 as they will have cuts as well as the taxes paid by the private sector.