Recession Part 2

Dempo1

So, its been a grim two weeks all round. The government seem to be hell bent on ruining any chance of recovery. Seems to me that before these Draconian cuts were considered, the country was already in a mess.

I am curious to know (Mindful savings had to be achieved) what is it the government are seeking to do by making an already difficult position for tens of thousands of Households an impossible position.

A.We know many are struggling with Mortgage Payments so the answer is introduce Water rates and Property tax?

B.We know many Households are struggling with day to day expenditure so they increase V.A.T?

C.We know further Education is already a difficult thing to achieve let alone consider so they increase fees?

D.We know many households are struggling with Utility Bills so they double carbon tax and introduce levies?

E.We know unemployment is at record highs (with little or no prospects of this situation improving) and they offer no stimulus and instead threaten does unemployed through no fault of their own. In the mean time reduce the minimum wage under the delusional notion this will suddenly increase massive employment?

F.We know its apparently impossible to touch generous and outrageous pensions belonging to certain former Bankers but yet easy picking for public sector & social welfare pensions?

G.We know that despite the rhetoric, the cost of living is actually increasing so the answer is increasing VAT?

H.We know the pension situation is critical so the answer is decrease tax relief?

I. We are told we need to start spending? I would love to know how this even remotely possible with even a small portion of examples used above?

The List could be endless.

I for one am extremely confused as to how a single solution offered by the government is going to help an already dreadful situation. Perhaps i am wrong but are we in for an even bigger crisis if this Budget is passed?

Dont be at yourself

Any alternative suggestions?

Cookie_Monster

Its just another spineless plan attacking only those who are easy targets, while eschewing any real meaningful changes to pay or tax or benefits that would actually work towards reducing costs in this country and making it even vaguely competitive with the rest of Europe

Padkir

NekkidBibleMan wrote: »

Any alternative suggestions?

That's the thing, everyone can just jump in and start pointin fingers and say we cant cut this, this and this!! But what can they do?? And I hope no-one starts jumpin in givin out about government salaries and rich people, cos that wud only be a drop in the ocean! We need to save billions, so cuts to almost everything are necessary! What went in the past is done, can't change it by complaining, so we mit as well get used to the fact that the next few years will be tough, and get on with it, because thats the only attitude that will get us anywhere!!

Cookie_Monster

NekkidBibleMan wrote: »

Any alternative suggestions?

Lower VAT to 12.5% and 20%
Reduce min wage to 7
abolish all tax bands and credits and replace with a flat rate on all earnings, say 15% - huge reduction in admin and implementation costs, easy to understand and much fairer to all.
Reduce welfare payments by X% - as needed to bring in line with EU rates
Reduce employer PRSI
Reverse carbon tax
remove PSO from elec and gas bills
reduce senior PS pay grades by 25% min
reduce/increase lower PS grades to EU averages
take up MOL on his offer to run Healthcare for free for 5 years
diesel fuel duty credits for transport industries & public transport

Dempo1

NekkidBibleMan wrote: »

Any alternative suggestions?

Yep

• Stimulus plan to actually increase employment, even community based employment.
• Stop bailing out the Banks IMMEDIATELY
• Audit and Cut governmental waste, salaries, Perks, Pensions
• Restructure Residential Mortgages (Not debt forgiveness), extensions, Interest freezing like personal loans etc

I could go one, but Jesus, I'm not economics expert but what is being proposed is complete madness. If there is one thing all economic experts agree on is the fact WE CAN NOT AFFORD MORE DEBT and we need Growth. What is being proposed will completely stop our economy moving, let alone grow.

Padkir

Cookie_Monster wrote: »

Lower VAT to 12.5% and 20%
Reduce min wage to 7
abolish all tax bands and credits and replace with a flat rate on all earnings, say 15% - huge reduction in admin and implementation costs, easy to understand and much fairer to all.
Reduce welfare payments by X% - as needed to bring in line with EU rates
Reduce employer PRSI
Reverse carbon tax
remove PSO from elec and gas bills
reduce senior PS pay grades by 25% min
reduce/increase lower PS grades to EU averages
take up MOL on his offer to run Healthcare for free for 5 years
diesel fuel duty credits for transport industries & public transport

While its all good and well saying this, and it would be great if it were possible, how wud this save billions in a few years?? It wouldn't, it just wouldn't, the figures can't add up!! It might save as much as a billion or 2, but thats not enough!!

Dont be at yourself

Lower VAT to 12.5% and 20%
Reduce min wage to 7
abolish all tax bands and credits and replace with a flat rate on all earnings, say 15% - huge reduction in admin and implementation costs, easy to understand and much fairer to all.
Reduce welfare payments by X% - as needed to bring in line with EU rates
Reduce employer PRSI
Reverse carbon tax
remove PSO from elec and gas bills
reduce senior PS pay grades by 25% min
reduce/increase lower PS grades to EU averages
take up MOL on his offer to run Healthcare for free for 5 years
diesel fuel duty credits for transport industries & public transport

We wouldn't even be able to do half of that if we were rolling in cash. You aren't living in the real world!

Dempo1

Cookie_Monster wrote: »

Lower VAT to 12.5% and 20%
Reduce min wage to 7
abolish all tax bands and credits and replace with a flat rate on all earnings, say 15% - huge reduction in admin and implementation costs, easy to understand and much fairer to all.
Reduce welfare payments by X% - as needed to bring in line with EU rates
Reduce employer PRSI
Reverse carbon tax
remove PSO from elec and gas bills
reduce senior PS pay grades by 25% min
reduce/increase lower PS grades to EU averages
take up MOL on his offer to run Healthcare for free for 5 years
diesel fuel duty credits for transport industries & public transport

Now your talking!

Do gooders seem to forget we are in the mess because of the Banks and their developer buddies. The average Irish Citizen had absolutely nothing to do with this mess and i would suggest would be quite content with a Job, any Job, pay their fair share and get on with their lives.

This BS about we must Cut back, why do we have to cut back if only to pay the bankers debts. Its a disgrace.

Cookie_Monster

Padkir wrote: »

While its all good and well saying this, and it would be great if it were possible, how wud this save billions in a few years?? It wouldn't, it just wouldn't, the figures can't add up!! It might save as much as a billion or 2, but thats not enough!!

NekkidBibleMan wrote: »

We wouldn't even be able to do half of that if we were rolling in cash. You aren't living in the real world!

reducing PS pay and benefits and welfare to EU levels will knock at least 30% off both I reckon, if not more. There's 12bn right there.
Sure the dole alone is 2.54 times the UK

danbohan

Dempo1 wrote: »

Now your talking!

Do gooders seem to forget we are in the mess because of the Banks and their developer buddies. The average Irish Citizen had absolutely nothing to do with this mess and i would suggest would be quite content with a Job, any Job, pay their fair share and get on with their lives.

This BS about we must Cut back, why do we have to cut back if only to pay the bankers debts. Its a disgrace.

its not just bankers , we have a 19 billion shortfall as well. the average irish citzen took all the credit offered to him by the mad banks so he has some responsibility as well

ardmacha

A.We know many are struggling with Mortgage Payments so the answer is introduce Water rates and Property tax?

Water costs money. Lots of people have no mortgages whosoever.

B.We know many Households are struggling with day to day expenditure so they increase V.A.T?

They say they will increase VAT in two years time, who knows what will happen.

C.We know further Education is already a difficult thing to achieve let alone consider so they increase fees?

The government does not have money to spend. So it can either ask people to contribute to third level education or resctrict the numbers going there. Which do you prefer?

D.We know many households are struggling with Utility Bills so they double carbon tax and introduce levies?

You might have a point here. But they also have grants for insulation.

E.We know unemployment is at record highs (with little or no prospects of this situation improving) and they offer no stimulus and instead threaten does unemployed through no fault of their own. In the mean time reduce the minimum wage under the delusional notion this will suddenly increase massive employment?

A stimulus costs money. The general level of wages and prices has declined, why not the minimum wage?

F.We know its apparently impossible to touch generous and outrageous pensions belonging to certain former Bankers but yet easy picking for public sector & social welfare pensions?

I agree about the injustice of this. But what legal mechanism exactly can do this?

G.We know that despite the rhetoric, the cost of living is actually increasing so the answer is increasing VAT?

The cost of living is not increasing. See B above.

H.We know the pension situation is critical so the answer is decrease tax relief?

This is short-sighted.

I. We are told we need to start spending? I would love to know how this even remotely possible with even a small portion of examples used above?

Many people who are less seriously affected will start spending when they see that this have stabilised in some way.

Padkir

Cookie_Monster wrote: »

reducing PS pay and benefits and welfare to EU levels will knock at least 30% off both I reckon, if not more. There's 12bn right there.
Sure the dole alone is 2.54 times the UK

One question, and try to answer honestly, if you were working in the public sector, on €40,000 a year, wud you accept a pay cut, or thin it was fair, to bring this down to €28,000???

Cookie_Monster

ardmacha wrote: »

The cost of living is not increasing. See B above.

while I broadly agree with much of your post that statement is completely wrong.
Food, fuel, taxes are all going up. Clothing will rise a lot shortly due to the woeful cotton harvests this year, it happening elsewhere already.
interests rates will go up soon, they cannot keep them as low as they are for much longer.

Gas and Elec have gone up. etc etc
the cost of living is most definitely rising

Liam Byrne

danbohan wrote: »

its not just bankers , we have a 19 billion shortfall as well. the average irish citzen took all the credit offered to him by the mad banks so he has some responsibility as well

Who is this "average citizen" ?

Cookie_Monster

Padkir wrote: »

One question, and try to answer honestly, if you were working in the public sector, on €40,000 a year, wud you accept a pay cut, or thin it was fair, to bring this down to €28,000???

of course I'd be pissed and try to block it but I'd also be laughing about how much I have been on for the last 7-10 years.
When you look at how out of kilter wages are here, there is no choice but to accept it. 28k + pension + security is better than no job.

but I'm not, I'm private sector and If my business was losing money I'd have a paycut without choice, or simply booted out. we don't have the money to keep PS pay at the levels its at, plain and simple. benchmarking it against EU averages is the fairest way to sort it out.

Dempo1

danbohan wrote: »

its not just bankers , we have a 19 billion shortfall as well. the average Irish citzen took all the credit offered to him by the mad banks so he has some responsibility as well

This kind of madness certainly does not help the shortfall

http://www.thejournal.ie/hse-administrators-to-receive-e240000-golden-handshakes-2010-11/

I accept there is a Budget Deficit but surely examining our own resources is the Key. Looking at ways of stimulating OUR economy. Take the Social welfare bill. We are told it costs €20,000 per person claiming annually, firstly that person certainly does not get anywhere near this amount but thats another story. Surely a simple or perhaps radical plan would be to put those people to constructive employment, even a minimum rate. OK it may seem simplistic but community based schemes can and do work. Getting something constructive out of those unemployed would be one step let alone giving back some dignity to those affected by unemployment.

My primary concern is the fact that what is being proposed will in fact kill any prospect of growth, Consumer spending is already at an all time low, the measures being proposed will i believe further diminish any prospect of economic growth.

I am unclear about your assertion about the Irish citizen taking credit from the mad bank, whatever credit they took did not cause this mess, I suspect a few defaulted car & personal loans did not get us into this mess. The Mort age situation is different but not helped by speculators. I for one purchased a HOME, not an investment status piece of architecture.

Padkir

Cookie_Monster wrote: »

of course I'd be pissed and try to block it but I'd also be laughing about how much I have been on for the last 7-10 years.
When you look at how out of kilter wages are here, there is no choice but to accept it. 28k + pension + security is better than no job.

While I agree that 28k + pension is better than no job, and a lot better at that, this is sometimes providing solely for a family with mortgage, etc. which was got on the basis that it cud be repaid due to the wages they were getting? how can you say there is security, with over 25,000 PS workers to be cut over the next few years? The average PS worker on the wage im talking about is not safe!

ardmacha

Quote:
Originally Posted by ardmacha View Post
The cost of living is not increasing. See B above.

while I broadly agree with much of your post that statement is completely wrong.

I'll take the CSO stats rather than your opinion on this one. Your point that prices will increase may be true.

Liam Byrne

Padkir wrote: »

One question, and try to answer honestly, if you were working in the public sector, on €40,000 a year, wud you accept a pay cut, or thin it was fair, to bring this down to €28,000???

If you were working in the private sector and the 2 options were (a) accept the pay cut or (b) have the company go bankrupt, would you accept the pay cut ?

Cookie_Monster

Padkir wrote: »

how can you say there is security, with over 25,000 PS workers to be cut over the next few years? The average PS worker on the wage im talking about is not safe!

but if pay was reduced there would not be a need to cut so many as long as they were flexible to move as the savings would be achieved.

also that 25k is based on 2008 numbers with 13k gone already (according to Newstalk), so only another 12k to go.

Padkir

Liam Byrne wrote: »

If you were working in the private sector and the 2 options were (a) accept the pay cut or (b) have the company go bankrupt, would you accept the pay cut ?

I would accept the pay cut, but if i had a mortgage, i would probably soon default on it, leading to more trouble! What I am saying is, this is too high of a cut, I certainly agree PS cuts are needed, but the 30% is unrealistic, perhaps in the region of 10% would be more like it!

Padkir

Cookie_Monster wrote: »

but if pay was reduced there would not be a need to cut so many as long as they were flexible to move as the savings would be achieved.

also that 25k is based on 2008 numbers with 13k gone already (according to Newstalk), so only another 12k to go.

I agree with a lot of what you're saying, but you can't take 30% of a middle-income earners wages off them in one go, you just can't! Maybe 10%, with a view to a further decrease in 2 years, depending on how things go from here?

Cookie_Monster

ardmacha wrote: »

I'll take the CSO stats rather than your opinion on this one. Your point that prices will increase may be true.

CSO back me up here...
.7% rise year on year to Oct

Cookie_Monster

Padkir wrote: »

I agree with a lot of what you're saying, but you can't take 30% of a middle-income earners wages off them in one go, you just can't! Maybe 10%, with a view to a further decrease in 2 years, depending on how things go from here?

I would imagine al lot of the lower and middle PS grades would in fact be a lot lower than this for many areas.
I'm not going to run off to check it though.

Why can you give out 7,8,9% benchmarking rises year on year without issue but not take it back when needed?

Padkir

Cookie_Monster wrote: »

I would imagine al lot of the lower and middle PS grades would in fact be a lot lower than this for many areas.
I'm not going to run off to check it though.

Why can you give out 7,8,9% benchmarking rises year on year without issue but not take it back when needed?

But thats exactly what I'm saying, they increased them by 8/9% per year, so if they wanted to decrease them, do it the same way! You cant just take off 30% in one go!
It would give them time to adjust to bringing in less oney, besides having €750 a week one month, the suddenly dropped to just over €500!

whysomoody

Cookie_Monster wrote: »

Lower VAT to 12.5% and 20%
Reduce min wage to 7
abolish all tax bands and credits and replace with a flat rate on all earnings, say 15% - huge reduction in admin and implementation costs, easy to understand and much fairer to all.
Reduce welfare payments by X% - as needed to bring in line with EU rates
Reduce employer PRSI
Reverse carbon tax
remove PSO from elec and gas bills
reduce senior PS pay grades by 25% min
reduce/increase lower PS grades to EU averages
take up MOL on his offer to run Healthcare for free for 5 years
diesel fuel duty credits for transport industries & public transport

Cookie_Monster wrote: »

while I broadly agree with much of your post that statement is completely wrong.
Food, fuel, taxes are all going up. Clothing will rise a lot shortly due to the woeful cotton harvests this year, it happening elsewhere already.
interests rates will go up soon, they cannot keep them as low as they are for much longer.

Gas and Elec have gone up. etc etc
the cost of living is most definitely rising

Depends what this is relative to, there is no way they are more expensive since 2007.

Dempo1 wrote: »

This kind of madness certainly does not help the shortfall

http://www.thejournal.ie/hse-administrators-to-receive-e240000-golden-handshakes-2010-11/

I accept there is a Budget Deficit but surely examining our own resources is the Key. Looking at ways of stimulating OUR economy. Take the Social welfare bill. We are told it costs €20,000 per person claiming annually, firstly that person certainly does not get anywhere near this amount but thats another story. Surely a simple or perhaps radical plan would be to put those people to constructive employment, even a minimum rate. OK it may seem simplistic but community based schemes can and do work. Getting something constructive out of those unemployed would be one step let alone giving back some dignity to those affected by unemployment.

Completely agree with this, people on the dole should have to work for it. That way the opportunity cost to them of accepting a lower paid job might be more appealing, as if you are gettin 800 p/m on the dole why would you work for 1200 p/m, as you are effectively only 50e a week better off and have to work for it. It would also save lots of money in terms of labour for community projects etc and give people a purpose to get up in the morning and hopefully have them buy into the community a bit more.

ardmacha

CSO back me up here...
.7% rise year on year to Oct

The CSO back me up too, the EU Harmonised Index of Consumer Prices (HICP) were 0.8% lower in October than in October 2009.

sarumite

Dempo1 wrote: »

Now your talking!

Do gooders seem to forget we are in the mess because of the Banks and their developer buddies. The average Irish Citizen had absolutely nothing to do with this mess and i would suggest would be quite content with a Job, any Job, pay their fair share and get on with their lives.

This BS about we must Cut back, why do we have to cut back if only to pay the bankers debts. Its a disgrace.

We are in a mess because of banks, yes. But ignoring the banking crisis, we still spend €20,000,000,000 more a yea than we earn. So even without the bankers debt, we would still be cutting back.

Dempo1

sarumite wrote: »

We are in a mess because of banks, yes. But ignoring the banking crisis, we still spend €20,000,000,000 more a yea than we earn. So even without the bankers debt, we would still be cutting back.

Yes i do agree that Cuts are necessary, i just get a sense that looking at what is proposed is actually going make a bad situation worse. All the experts say we need growth in the economy but what is being proposed will i believe stifle growth through very penal cuts. As it is there is extremely low disposable income in our economy, this plan will mean no disposable income. In addition, the facts are clear that people are struggling as it is, these measures seem to me to only make their situations worse if not perilous, me included!

In particular i sincerely believe the mortgage crisis is going to implode and if it does, how does these measures help this chronic situation.

sarumite

Dempo1 wrote: »

Yes i do agree that Cuts are necessary, i just get a sense that looking at what is proposed is actually going make a bad situation worse. All the experts say we need growth in the economy but what is being proposed will i believe stifle growth through very penal cuts. As it is there is extremely low disposable income in our economy, this plan will mean no disposable income. In addition, the facts are clear that people are struggling as it is, these measures seem to me to only make their situations worse if not perilous, me included!

In particular i sincerely believe the mortgage crisis is going to implode and if it does, how does these measures help this chronic situation.

I agree. I lost my job and and had to emigrate so I know all to well effect of the bad economy. I managed to get a one year contract, after that I don't know what I will do. However, we can't borrow money to make up the deficit (bond yields are too high), so it has to be cuts. They are unsavory but inevitable. Its either we do them now or we wait till we run out of money and do it later.

sarumite

Padkir wrote: »

While I agree that 28k + pension is better than no job, and a lot better at that, this is sometimes providing solely for a family with mortgage, etc. which was got on the basis that it cud be repaid due to the wages they were getting? how can you say there is security, with over 25,000 PS workers to be cut over the next few years? The average PS worker on the wage im talking about is not safe!

28k+pension+job security+mortgage is still better than no Job +mortgage. They may not be safe, but they are far better off than many Irish people.

Bullseye1

It appears the EU had some say in the lowering of the minimum wage "in order to become more competitive" yet they agree to an increase in the carbon tax. Madness. So buy increasing the cost of electricity and heating we will become more competitive:rolleyes:.

Tim Robbins

One thing I think media have missed out on is the pension cuts.
If you are in the private sector you generally have a defined contribution pension which you put some of your salary into. There were good tax incentives here - these are being slashed, so you'll have to put a lot more money into your pension now than you did before.

However, if you are in the public sector you still have your defined benefit pension. Surely they should have got another pension levy to make things equitable?

BengaLover

I like the way these guys explain it..
http://www.youtube.com/watch?v=NOzR3UAyXao

Dempo1

BengaLover wrote: »

I like the way these guys explain it..
http://www.youtube.com/watch?v=NOzR3UAyXao

Classic and pretty much sums the situation up!

I see Portugal have commenced the denial game!, where did we hear that before?

Liam Byrne

Padkir wrote: »

I would accept the pay cut, but if i had a mortgage, i would probably soon default on it, leading to more trouble! What I am saying is, this is too high of a cut, I certainly agree PS cuts are needed, but the 30% is unrealistic, perhaps in the region of 10% would be more like it!

Well, I'm down almost 30% on last year, and I don't have the job security & pensions that public sector has.

BTW, I'm not going to ****stir or make this a "public vs private" debate; I'm only pointing out the reality.

dan_d

Liam Byrne wrote: »

Well, I'm down almost 30% on last year, and I don't have the job security & pensions that public sector has.

BTW, I'm not going to ****stir or make this a "public vs private" debate; I'm only pointing out the reality.

To be fair, a lot of my friends are too - up to 50% less......one doesn't know when he'll get paid from month to month as his company pay when they have money. Several are on 3 day weeks, and one is now earning just under what he got when he graduated. Prior to being laid off I also took a 5% paycut.
It's not right but it's what's happening out here.

Agree with lByrne - not a public vs private debate.

Dempo1

dan_d wrote: »

To be fair, a lot of my friends are too - up to 50% less......one doesn't know when he'll get paid from month to month as his company pay when they have money. Several are on 3 day weeks, and one is now earning just under what he got when he graduated. Prior to being laid off I also took a 5% paycut.
It's not right but it's what's happening out here.

Agree with lByrne - not a public vs private debate.

I agree dan_d

The difficulties already faced in numerous industries regarding not just reductions in Pay but in fact non or delayed payments appears not to be recognized generally, not just this proposed budget. Not sure what sector your in but i was in the Hotel/Catering sector but made redundant a year ago. Prior to this I an numerous colleagues throughout the sector had and continue to have difficulty just getting paid let alone dealing with hours and salary reductions. I also would have a vested interest in the minimum wage cut because sadly my sector will undoubtedly witness enormous abuses of what is being proposed. I also get infuriated when i hear politicians going on about this so called industry wage agreements such as Sunday premium. Take it from me, its a fairy tale and is rarely either paid or recognized. I also know many people in the construction sector (whats left of it), many have been forced to self contract as opposed to remain on salary and have and continue to be left weeks if not months to be paid.

I guess my point would be there is an underlying issue around the entire matter about wages already being cut, widespread abuses because of the down turn and whilst accepting there are genuine hardships for small business out there, it appears to me it the employee's yet again that will take the brunt of what is being proposed.

I do have sympathy with Public Sector employees but its worth pointing out that there is not just some security but more importantly a gaurentee they will get their weekly pay cheque.