Four-year plan document

Permabear

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RedXIV

Just had a quick scan and some parts are very vague, like income tax.

VAT to rise to 23% by 2014 though.

Will have a better read later

wiseguy

Yep 530 million in new local charges

back of envelope thats 550 euro per year for the million or so households

CiaranC

140 pages to detail a handful of minor changes. Horse-s hit.

Scofflaw

I'm already disturbed:

From the late 1990s, the benefits of our booming economy were felt across every section of the population. Working-age social welfare rates are now more than twice their rate in 2000. Over the same period, the State pension almost doubled. These increases were well ahead of the cost of living.

Public service pay also increased well ahead of inflation. From 2000 to 2009 average public service salaries increased by 59%. At the same time, taxation was reduced. During the period after 2000, the entry point to income tax increased from €7,238 to €18,300 for PAYE earners and since 2000, bands have widened by 105% for the single person and married two earners. Credits have increased by 92% since their introduction in 2001. The standard and higher tax rates fell from 26% and 48% in 1997/98 to 20% and 41% by 2007.

As a result of these changes, the proportion of income earners exempt from income tax increased from 34% in 2004 to an estimated 45% in 2010. It is now estimated that for the current year, 42% of income earners will pay tax at the standard rate and just 13% will be liable at the top rate.

The substantial reductions in tax and increases in welfare were made possible by the very high level of property-related tax receipts taken in by the Exchequer during the boom years. The property boom also swelled VAT and other receipts. In 2007, capital taxes and stamp duty yielded €6.7 billion. This year, that figure is expected to fall to as low as €1.6 billion. In these dramatically changed circumstances, it is clear the State can no longer afford the current levels of social provision and personal taxation.

Ladies and gentlemen, this is how we wrecked the State's finances, and this is what the electorate voted for, because - look at the money, ladies and gentlemen - nearly everybody got some. We are not ashamed, we are Fianna Fáil.

What a party it was, eh?

disturbed,
Scofflaw

Einhard

Show me the detail Brians!!!

Seriously, I knew they weren't going to give a line for line rundown of cuts and tax increases, but if this document was any more vague it's be opaque. If I'm not impressed, how the bloody hell are the markets going to respond positively?

Welease

Einhard wrote: »

Show me the detail Brians!!!

Seriously, I knew they weren't going to give a line for line rundown of cuts and tax increases, but if this document was any more vague it's be opaque. If I'm not impressed, how the bloody hell are the markets going to respond positively?

But.. this is supposed to be a plan.. I'm not surprised it doesn't have any more detail..

The first part of the detail should be coming with the Dec 7th budget..

Permabear

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Einhard

Scofflaw wrote: »

I'm already disturbed:



Ladies and gentlemen, this is how we wrecked the State's finances, and this is what the electorate voted for, because - look at the money, ladies and gentlemen - nearly everybody got some. We are not ashamed, we are Fianna Fáil.

What a party it was, eh?

disturbed,
Scofflaw

Cowen is just after stating how right and proper and progressive it was to pay unsustainable increases to pensioners and those on the dole etc. It's scary that he still doesn't seem to get it. Those increases are a major part of our current problems.

lightspeed

Einhard wrote: »

Cowen is just after stating how right and proper and progressive it was to pay unsustainable increases to pensioners and those on the dole etc. It's scary that he still doesn't seem to get it. Those increases are a major part of our current problems.

i know i listened to that shoutng at the telly why???
why were these increases made?????

Einhard

Welease wrote: »

But.. this is supposed to be a plan.. I'm not surprised it doesn't have any more detail..

The first part of the detail should be coming with the Dec 7th budget..

Yes, but I expected that, say, we'd get details on how much the various SW payments are going to be reduced by 2014. But there's nothing as far as I can see. There's mention of reductions per deprtment but nothing of individual departmental programmes. I don't really undertand how such a vague plan could have taken such a prolonged period of time to produce.

Ha,ha the RnaG fella has all the foreign and most of the Irish reporters looking confused!!

Scofflaw

donegalfella wrote: »

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That's exactly how I took it. My view on Fianna Fáil has always been that they can wreck any prosperity they get their hands on, but seeing it set out starkly in black and white that the colossal mess they made was actually the greatest thing since sliced bread...even I find it that hard to believe. I guess they've decided their narrative - and given the level of sense that's being applied to the current situation by large numbers of people, I won't say it won't work for them, too. Maybe not in the new year, but next time, when people are tired of Fine Gael telling them they have to tighten their belts, Fianna Fáil will be round the houses with a smile, saying "remember the good times you had with us, eh?".

cordially,
Scofflaw

Permabear

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Maj Malfunction

Reading that "document" is enough to make me sick... I won't comment any further on it as what I would like to say would probably get me banned by the Mods.

BlaasForRafa

Einhard wrote: »

Show me the detail Brians!!!

Seriously, I knew they weren't going to give a line for line rundown of cuts and tax increases, but if this document was any more vague it's be opaque. If I'm not impressed, how the bloody hell are the markets going to respond positively?

This plan is going to drive the domestic economy through the floor. I wouldn't like to be owning or working in a retail business as even those that are still working will have no spare money to spend on anything that isn't absolutely essential.

I realise that everyone has to take some pain (although I'm sure the rich will use crafty accounting to get away with it) but holy **** this is going to be savage.

dan_d

To be honest, going back to 2006 anything is ridiculous. Wasn't that just about at the height of the craziness??Why would we go back there???

As for why people got these increases.....because why not!!I mean, like....duh...!!:p

maxwell smart

10% reduction for new entrants to the PS. So there will be a 2 tier pay system for doing the same job?
Surely it should have been an across the board 10% cut?

Permabear

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BlaasForRafa

maxwell smart wrote: »

10% reduction for new entrants to the PS. So there will be a 2 tier pay system for doing the same job?
Surely it should have been an across the board 10% cut?

it should be... but the craven government we have is scared of the PS unions. (Labour is no better as it will be beholden to the unions).

As it stands there was inequality in the PS between permanent employees and contract employees, this plan will cement a two-tier system in the PS but the existing PS workers don't give a flying crap about anything except maintaining their own (relatively) privileged positions.

channelsurfer2

for all new entrants??? what new entrants are there gonna be in the next 4 years? i bet they have a plan b ready for next year when they tear up croke park and take 10% off anyways with the savings having been made..

maxwell smart

donegalfella wrote: »

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I understand that principle, but now is the time to take the unions on. There is the public will for it. Pity there is no political will.
People resent doing the same job for less money than someone else, regardless of length of service. Pay should be on performance.

Buford T Justice

donegalfella wrote: »

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Astonishing that in the situation that we're in, the gov't are still pandering to those bullyboys who hold the state to ransom if their pockets are threatened. Unions need to stand up and take the pain with the rest of us.

LittleBook

No person, group or sector can be absolved from making a fair contribution to the resolution of our economic difficulties. The measures contained in the Plan are proportionate. We must all accept our share of the burden so that we can collectively share in the fruits that will undoubtedly flow from solving our current problems.

2006? I've just been transported back to 1980 and a certain speech about tightening "our" belts!!

dlofnep

Thanks DF, I'll give it a read now.

Permabear

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the groutch

donegalfella wrote: »

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I'd prefer to go back to 1997

maxwell smart

donegalfella wrote: »

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59%.....incredible.

RedXIV

Stabshauptmann wrote: »

Yup vague, but reading between the lines and table a.10.3 at the back, its possible to infer whats happening with income tax

For someone like myself, who likes computers, not finance, could you give me a brief outline please

bbob02

I,m confused

social welfare any changes there

i am working and going to get 1 euro less an hour:eek:

Jinxi

White rage is the only way I can describe the way I feel.
I understand that the cuts are necessary, but it woud make it a whole lot easier to bear if BC accepted the role he has played in stripping HOPE from our country, as 1st Minister of Finance, and then Taoiseach.
The despair is palpable.

Permabear

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ArtSmart

200 euro fee for VEC students

Student grants to be cut - but i assume for new entrants

Capitation grants for schools to be cut 5%

RedXIV

bbob02 wrote: »

I,m confused

social welfare any changes there

i am working and going to get 1 euro less an hour:eek:

I assume your wages won't drop, instead new people being hired can be paid this new minimum wage.

the groutch

bbob02 wrote: »

I,m confused

social welfare any changes there

i am working and going to get 1 euro less an hour:eek:

not necessarily, if depends on the phrasing on your employment contact, and whether it specifies that you be paid minimum wage, or paid €8.65

ArtSmart

it seems to be a middle ground between FG and Lab proposals, except the min wages reduction and no stimulus package.

BlaasForRafa

LittleBook wrote: »

2006? I've just been transported back to 1980 and a certain speech about tightening "our" belts!!

I thought this was from 1987 but you're right, its back to 1980 and we're still ruled by fianna fail incompetents and crooks

https://www.youtube.com/watch?v=4-bSKsVDr_M

MagicSean

maxwell smart wrote: »

I understand that principle, but now is the time to take the unions on. There is the public will for it. Pity there is no political will.
People resent doing the same job for less money than someone else, regardless of length of service. Pay should be on performance.

If there aren't significant savings brought about in the public sector I think the CP agreement will be gone by the middle of next year.

harsea8

errr, what does this mean? "Over the 2010-14 period of the Plan, the top marginal rates would remain the same at 52% for PAYE workers and 55% for self-employed. " Does this mean top rate of tax will remain unchanged for whole 4-year period?

Also, this is strange, as it seem they want a bigger hit for a family on a single wage vs. 1 person on the same wage, surely the family need more disposable income??..."By 2014, net pay for a single person on €55,000 will be reduced by €1,860 per annum (€36 per week) or 4.8%. The net pay for a married one-income family on €55,000 will be reduced by €2,310 per annum (€44 per week) or 5.4%. "

jonnyfingers

harsea8 wrote: »

errr, what does this mean? "Over the 2010-14 period of the Plan, the top marginal rates would remain the same at 52% for PAYE workers and 55% for self-employed. " Does this mean top rate of tax will remain unchanged for whole 4-year period?

Also, this is strange, as it seem they want a bigger hit for a family on a single wage vs. 1 person on the same wage, surely the family need more disposable income??..."By 2014, net pay for a single person on €55,000 will be reduced by €1,860 per annum (€36 per week) or 4.8%. The net pay for a married one-income family on €55,000 will be reduced by €2,310 per annum (€44 per week) or 5.4%. "

What's strange about that? Fianna Fáil only care for the wealthy, this is no secret. :mad:

danbohan

Jinxi wrote: »

White rage is the only way I can describe the way I feel.
I understand that the cuts are necessary, but it woud make it a whole lot easier to bear if BC accepted the role he has played in stripping HOPE from our country, as 1st Minister of Finance, and then Taoiseach.
The despair is palpable.

bond markets are rising sharply , they see this for what it is a load of fianna fail bs

MisterAnarchy

jonnyfingers wrote: »

What's strange about that? Fianna Fáil only care for the wealthy, this is no secret. :mad:

Thats right,the wealthy 0.5% of people in this country that paid almost 18% of all income tax, over €2bn in total. Their average tax rate was 27.5%.

Almost 770,000 people earned less than €17,000. Understandably, given tax credits, these workers paid a tiny amount of tax, €20m in total. Their average tax rate was about 0.5%.

It’s in the middle, though, where things seem to go all screwy. The median earner, earning about €25,000, paid just 4% in income tax!

Its time to dispel the fallacy that Irish people pay high income tax because that is rubbish.
The wealthy people are paying more than their fair share of tax .

Buford T Justice

They are basically enforcing an 11% pay cut to the lowest paid people in society, and then making them pay income tax on that, (on a 40hr week, it comes to just under 16K, and the threshold for tax will be 15,3 I think).

What happens to the higher paid.............. income tax increase that everyone else gets................ nothing else.

Taxing the most vulnerable again. No change for this Government. Let not forget that the unions are all happy with their croke park agreement.

Manach

Well instead of tightening our belts we get to eat them.

MisterAnarchy

Fingers McGee wrote: »

They are basically enforcing an 11% pay cut to the lowest paid people in society, and then making them pay income tax on that, (on a 40hr week, it comes to just under 16K, and the threshold for tax will be 15,3 I think).

Our tax system is completely screwed up.
The threshold for tax in the UK is £6,500,you have to pay income tax over that level .
It is 15,300 euro here,it was 18,300 .
The threshold for income tax in Ireland in 2000 was €7,238 !
The median earner was paying 4% tax up to 2 years ago,compared to an OECD average of 20%.That is unsustainable .
The problem with cutting the minimum wage and not cutting welfare means that it wont be worthwhile for certain people to work.They will be better off on social welfare.

ardmacha

The document openly acknowledges that the average public servant's wages went up 59 percent between 2000 and 2009

Which needs to be viewed in the light of pretty much every sector's wages going up by 50%+ in this period.

I predict that the €100 flat property tax will raise hackles among social progressives.

Quite rightly. They could at least have 3 or 4 bands based on the size of the house, < 60sq m 60-100sq m 100-150sq m and mansion.

Taxing the most vulnerable again

Taxing those who have not paid income tax in recent years, but who did in the past and who do in every other nation.

Buford T Justice

MisterAnarchy wrote: »

Our tax system is completely screwed up.
The threshold for tax in the UK is £6,500,you have to pay income tax over that level .
It is 15,300 euro here,it was 18,300 .
The threshold for income tax in Ireland in 2000 was €7,238 !
The median earner was paying 4% tax up to 2 years ago,compared to an OECD average of 20%.That is unsustainable .
The problem with cutting the minimum wage and not cutting welfare means that it wont be worthwhile for certain people to work.They will be better off on social welfare.

I agree, a lot of people will be better off on welfare, especially considering the cost of childcare, which will no doubt be increased as a result

Isn't the threshold currently €18300, to be reduced to €15300 in the future?

death1234567

MisterAnarchy wrote: »

The problem with cutting the minimum wage and not cutting welfare means that it wont be worthwhile for certain people to work.They will be better off on social welfare.

They are cutting welfare too. By €2.8 billion over the 4 years IIRC. The pension is not being cut so the majority of that will come from child benefit and dole cuts. They are estimating a 15%* cut in the dole on the radio.

*Not enough IMO.

amacachi

Cutting the minimum wage but not the dole is by far and away the most retarded thing I've ever heard. I was expecting perhaps a cut to 8 quid an hour and 30ish being taken off the dole, which would've left single people about the same amount better off working than on the dole as they are now, instead they've lopped a Euro off the minimum wage and not touched the dole, I really can't believe it.

More half-measures in the education sector and general public sector. This was a chance to make a difference for the future of this country and point it towards a better future but the didn't take it.

amacachi

death1234567 wrote: »

They are cutting welfare too. By 15%* over the 4 years IIRC.

*Not enough IMO.

Completely ridiculous. It should have been down by that much since around 2007 til this year's budget, 3-4% per year would've done it.

westtip

amacachi wrote: »

Cutting the minimum wage but not the dole is by far and away the most retarded thing I've ever heard. I was expecting perhaps a cut to 8 quid an hour and 30ish being taken off the dole, which would've left single people about the same amount better off working than on the dole as they are now, instead they've lopped a Euro off the minimum wage and not touched the dole, I really can't believe it.

More half-measures in the education sector and general public sector. This was a chance to make a difference for the future of this country and point it towards a better future but the didn't take it.

Mate its like this government the document is a dogs breakfast.

Flex

Great reaction to the 4 year plans announcement so far, interest rates over 9.2%...

Glad to see corporation tax remained untouched, but I dont think the VAT changes will do good.

Reducing new PS entrants pay by 10% was what I was expecting; a two tier system of pay for post-Celtic Tiger. Also allows for sooner savings if more people on the Celtic Tiger rates of pay are incentivised to leave and be replaced with people on new post-Celtic Tiger rates of pay.

I have very little confidence in the plan though, unfortunately...

ardmacha wrote: »

Which needs to be viewed in the light of pretty much every sector's wages going up by 50%+ in this period.

The PS premium was 8% in 2003, became 23% in 2006 and 26% in 2009 (ESRI report). It outstripped its counterparts by a significant amount.