October... 3 Year Budget Plan Coming

highgiant1985

source - http://breakingnews.ie/ireland/government-to-reveal-budget-plans-in-october-517345.html

It has reported today the Government will reveal within the coming weeks plans to increase taxes and cut spending over the next three years.

According to the Sunday Business Post, Finance Minister Michael Noonan will give the details of a pre-Budget assessment in October.

The move is intended to give certainty to the markets, as well as consumers, as the Government seeks to encourage confidence in its recovery.

The Government is planning cuts of at least €3.6bn for next year, though there have been warnings that this figure could rise to €4bn.

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So any one want to predict what will be in the October announcement? Do you think this will give confidence to consumers to go out and spend a bit more or will people see cuts 2/3 years down the line that might effect them and start saving even more?

From a personal viewpoint I was thinking of buying a house in next 6-12 months so the details of this sort of announcement would be gladly welcomed as it would allow me to better budget for a house purchase (plus hopefully it'll drive prices down again from my own personal point of view).

drunkmonkey

Until Nama is finished and there's a fire sale of all unused property your better to rent.
Not sure if it'll happen this time around but social welfare is going to get hammered.
Single person unemployed in Germany gets €359pm + housing and pension. It's over double that here.

doc_17

Didn't they promise not to cut social welfare and not to raise taxes? Wonder what they're gonna annonce then?

Probably cuts to social welfare and increases to taxes as well as whole new taxes.

jackbetal

drunkmonkey wrote: »

Until Nama is finished and there's a fire sale of all unused property your better to rent.
Not sure if it'll happen this time around but social welfare is going to get hammered.
Single person unemployed in Germany gets €359pm + housing and pension. It's over double that here.

It is disingenuous to give figures like that out of context. Maybe if you also mentioned that Irelands percent spend of GDP on Social Protection is in and around 32% whilst Germanys is 45%. We are one of the most unequal societies in Europe.

Count Dooku

drunkmonkey wrote: »

Until Nama is finished and there's a fire sale of all unused property your better to rent.
Not sure if it'll happen this time around but social welfare is going to get hammered.
Single person unemployed in Germany gets €359pm + housing and pension. It's over double that here.

PS pay and welfare benefits are sacred cows for labour. because it allows them to buy votes the same way as FF
Moan Burton would everything to preserve benefits

And she warned "my intention to preserve basic welfare rates means schemes like these must be reformed if we are to secure that objective".

http://www.independent.ie/opinion/columnists/john-drennan/john-drennan-elite-dolebusters-squad-to-tackle-welfare-cheats-2853864.html

murphaph

jackbetal wrote: »

It is disingenuous to give figures like that out of context. Maybe if you also mentioned that Irelands percent spend of GDP on Social Protection is in and around 32% whilst Germanys is 45%. We are one of the most unequal societies in Europe.

Tell that to someone on Hartz IV (the above mentioned €359 a month figure) who gets half what an Irish person gets. Hartz IV is tough to live on. This is what you get in Germany after 12 months unemployment and no matter what way you want to paint the picture: in Germany it's not made in the slightest bit attractive to be unemployed.

In Ireland people have to do sums before they decide if they'll come off the dole and take a job offer ffs. Enough said.

Germany presumably spends its social protection budget on the genuinely needy, not the terminally lazy.

Ireland should totally reform welfare so that people who have worked and paid their PRSI contributions should get a %age of final salary (say 60%, capped at €60k) on unemployment for a period of 1 year. After that you should step down (possibly gradually) to a subsistence level of payment, with a refusal to work on CE schemes leading to a reduction in benefits even further (as happens in Germany-you can be completely cut off from even Hartz IV payments in Germany if you refuse to cooperate with the system. This is how people end up homeless here and why few Germans have any sympathy for the homeless-they see them as having opted out of society and see no moral obligation for society to look after them.

Could you imagine the ructions in Ireland if the government proposed a change to the system that would allow someone to receive absolutely no benefits from the state whatsoever? :eek:

ardmacha

jackbetal wrote:

Maybe if you also mentioned that Irelands percent spend of GDP on Social Protection is in and around 32% whilst Germanys is 45%. We are one of the most unequal societies in Europe.

I doubt if this figure is correct. As Germany must also spend public money on law enforcement, education, infrastructure etc, then the percentage of government expenditure would far exceed its real proportion of GDP.

murphaph wrote:

Ireland should totally reform welfare so that people who have worked and paid their PRSI contributions should get a %age of final salary (say 60%, capped at €60k) on unemployment for a period of 1 year.

There is a lot of merit in this. But this should have been done when times were better. Currently, there are a lot of employable people having difficulty finding jobs, long term unemployed would not be much in demand. Such a change may have to await an uptake, the danger being that the savings are less needed then.

This is why every effort must be made to moderate boom and bust cycles in the economy in future.

AlekSmart

murphaph wrote: »

In Ireland people have to do sums before they decide if they'll come off the dole and take a job offer ffs. Enough said.

Could you imagine the ructions in Ireland if the government proposed a change to the system that would allow someone to receive absolutely no benefits from the state whatsoever? :eek:

Both of the above elements taken together underline just why we won't see much innovation in whatever Budgetary proposals emerge.

It appears that Irelands economic policies still revolve around a fairy arriving along with a bag of magic beans....

http://www.nama.ie/Publications/2009/Business_Plan_13OCT09.pdf

Official Irish Financial Policy is to hang on in the hope of an upturn.......:rolleyes:

sollar

murphaph wrote: »

Ireland should totally reform welfare so that people who have worked and paid their PRSI contributions should get a %age of final salary (say 60%, capped at €60k) on unemployment for a period of 1 year. After that you should step down (possibly gradually) to a subsistence level of payment, with a refusal to work on CE schemes leading to a reduction in benefits even further (as happens in Germany-you can be completely cut off from even Hartz IV payments in Germany if you refuse to cooperate with the system.

I agree with this. It should get progressively lower after the year, down to a level of absolute basics.

tenchi-fan

doc_17 wrote: »

Didn't they promise not to cut social welfare and not to raise taxes? Wonder what they're gonna annonce then?

"We're not going to increase income tax"
Aren't Irish people the thickest c***s in the world to believe FG wouldn't increase taxes. Our reputation abroad is well deserved.

"We're not going to increase income tax" means they're not going to raise the tax rate.
However they will cut the tax bands and tax allowances.

VAT will probably increase. Levies on insurance (car, health, house) and life assurance products will increase. Pension tax allowances will be reduced substantially and they'll probably abolish the remaining measly tax deductions PAYE workers can make. Motor tax and excise duties will all increase.

I quite like Michael O'Leary's idea of the following tax bands:
15% <50k
25% 50-100k
50% >100k
Combined with lower social welfare it would really kick-start the economy.

WalterMitty

jackbetal wrote: »

It is disingenuous to give figures like that out of context. Maybe if you also mentioned that Irelands percent spend of GDP on Social Protection is in and around 32% whilst Germanys is 45%. We are one of the most unequal societies in Europe.

You are being disingenuous using GDP figure for IReland rather than GNP which all independent experts agree is a better measure of Irish economic activity with regard to tax raising ability.

thebman

tenchi-fan wrote: »

"We're not going to increase income tax"
Aren't Irish people the thickest c***s in the world to believe FG wouldn't increase taxes. Our reputation abroad is well deserved.

"We're not going to increase income tax" means they're not going to raise the tax rate.
However they will cut the tax bands and tax allowances.

I don't think that shows the Irish are thick. I think everyone knew that they would have to get the money somehow and that those things were on the cards but the alternatives were either being just as or more unrealistic.

I do hope the recent vat reduction will be added back on to show businesses that if they aren't going to pass on the lower vat rate then they aren't going to be allowed to pocket the difference.

The government had good reasons to lower vat if businesses passed it on but they haven't in most cases so lets show them what happens if you don't pass on lower vat rates.

hatrickpatrick

thebman wrote: »

I think everyone knew that they would have to get the money somehow

Call me naive but I was rather hoping they would get it by getting bank investors to pay for their own f*cking mess and leave the rest of us taxpayers out of it.

What the hell is even HAPPENING with the whole senior bondholders bollocks? Are they going to take a haircut or are we going to end up paying to other people's gambles despite what was said before the election?

WalterMitty

hatrickpatrick wrote: »

Call me naive but I was rather hoping they would get it by getting bank investors to pay for their own f*cking mess and leave the rest of us taxpayers out of it.

What the hell is even HAPPENING with the whole senior bondholders bollocks? Are they going to take a haircut or are we going to end up paying to other people's gambles despite what was said before the election?

Even without the bank debt we still have a massive deficit. Most of the bank bondholders have been repaid anyway. The savings in funding costs of money the EU and ECB have given us at ECB rate for bank liquidity and 4% for bail out will more than cover the amount we could have saved on burning bondholders, that is the quid pro quo. Back to our main problem then , budget must be balanced.

thebman

hatrickpatrick wrote: »

Call me naive but I was rather hoping they would get it by getting bank investors to pay for their own f*cking mess and leave the rest of us taxpayers out of it.

What the hell is even HAPPENING with the whole senior bondholders bollocks? Are they going to take a haircut or are we going to end up paying to other people's gambles despite what was said before the election?

Except the state has a massive deficit ignoring the bailing out of the banks. And it is not feasible to refund the banks and then demand a year later, they repay the money because they don't have the money to repay the state.

Scofflaw

WalterMitty wrote: »

You are being disingenuous using GDP figure for IReland rather than GNP which all independent experts agree is a better measure of Irish economic activity with regard to tax raising ability.

That's hardly the case, surely? I appreciate that GNP has become the de rigeur figure to use for anything Irish, but to use it for tax-raising is to leave out the tax contribution of the MNCs, which is very far from negligible. Last time I looked, the tax contribution of just the US multinationals here was €4.7bn of a total tax take of €41bn, or 11.5% (2008 figures).

US multinationals are the largest foreign MNC contingent here, but they're not the only one, so the total contribution of MNCs to taxes is going to be a good deal more than the c.14% gap between Irish GDP and GNP, particularly once you factor in the jobs they're supporting.

More generally, there's a tendency to use GNP when calculating tax burden, without using only the domestic tax burden. That's also wrong.

cordially,
Scofflaw

thebman

Scofflaw wrote: »

That's hardly the case, surely? I appreciate that GNP has become the de rigeur figure to use for anything Irish, but to use it for tax-raising is to leave out the tax contribution of the MNCs, which is very far from negligible. Last time I looked, the tax contribution of just the US multinationals here was €4.7bn of a total tax take of €41bn, or 11.5% (2008 figures).

US multinationals are the largest foreign MNC contingent here, but they're not the only one, so the total contribution of MNCs to taxes is going to be a good deal more than the c.14% gap between Irish GDP and GNP, particularly once you factor in the jobs they're supporting.

More generally, there's a tendency to use GNP when calculating tax burden, without using only the domestic tax burden. That's also wrong.

cordially,
Scofflaw

Well corporation tax is off the table for obvious reasons. I think if the EU came up with a proper frame work for countries like Ireland to be allowed offset our location disadvantage then people probably wouldn't have a problem with increasing corporation tax.

The extra cost of getting the product to consumers from Ireland is an expense that doesn't exist in many other countries that needs to be factored into our ability to tax. That and our relatively small population means companies have a much smaller domestic market for their products too.

Or in other words, it is silly to look at tax levels on a GDP/GNP level as these aren't the only significant variables at play.

fliball123

I hope mr kenny does not forget about the 2:1 taxes to cuts ratio he promised and this promise was what got him elected....

dvpower

fliball123 wrote: »

I hope mr kenny does not forget about the 2:1 taxes to cuts ratio he promised and this promise was what got him elected....

2:1 tax rises to cuts?
The other way around, no?

Count Dooku

dvpower wrote: »

2:1 tax rises to cuts?
The other way around, no?

Probably with cuts to services only

WalterMitty

Scofflaw wrote: »

That's hardly the case, surely? I appreciate that GNP has become the de rigeur figure to use for anything Irish, but to use it for tax-raising is to leave out the tax contribution of the MNCs, which is very far from negligible. Last time I looked, the tax contribution of just the US multinationals here was €4.7bn of a total tax take of €41bn, or 11.5% (2008 figures).

US multinationals are the largest foreign MNC contingent here, but they're not the only one, so the total contribution of MNCs to taxes is going to be a good deal more than the c.14% gap between Irish GDP and GNP, particularly once you factor in the jobs they're supporting.

More generally, there's a tendency to use GNP when calculating tax burden, without using only the domestic tax burden. That's also wrong.

cordially,
Scofflaw

Yeah so use gnp + foreign mnc corporation tax instead of GDP then. The difference between this figure( gnp + corp tax) and GDP is not open to being taxed without losing investment and economic activity. I presume gross incomes of those working in foreign mncs is included in GNP? ~Even during boom Public sector unions used GDP figures to call for greater public spending as % of GDP health/education etc even though nominal amounts per capita spend on those areas were amongst highest in world.

ardmacha

call for greater public spending as % of GDP health/education etc even though nominal amounts per capita spend on those areas were amongst highest in world

.

Even if you adjust proportions for GNP rather than GDP, education expenditure was never high in relation to other prosperous countries. And whatever about amounts per capita, amounts per student never exceeded that of our neighbours even when we had a "boom".
Health may well be a different situation.

But this GDP/GNP thing does confuse statistics as everyone uses the stat that suits them and ignores the other ones.

thebman

dvpower wrote: »

2:1 tax rises to cuts?
The other way around, no?

No, that is not what FG promised as far as I remember. They promised the ratio to be more cuts than tax increases. 33% tax increases.

Then they went into power with Labour and all bets were off though.

average_runner

What i can see happening is the following over three years:

Carbon tax go up by 10%
Water rates will hit 200
Lower tax rate go up by 2 %
Upper tax rate by 5%

Tora Bora

average_runner wrote: »

What i can see happening is the following over three years:

Carbon tax go up by 10%
Water rates will hit 200
Lower tax rate go up by 2 %
Upper tax rate by 5%

Black economy up by 25%;)

spank_inferno

average_runner wrote: »

What i can see happening is the following over three years:

Carbon tax go up by 10%
Water rates will hit 200
Lower tax rate go up by 2 %
Upper tax rate by 5%

And the cost/benefit of working in the first place will go down several points too

fliball123

dvpower wrote: »

2:1 tax rises to cuts?
The other way around, no?

Yeah sorry meant it that way as in for every Euro taxed 2 euros are cut..The problem I see for the gov is the CPA when you see them closing A&Es and increasing class sizes it doesnt bode well for the cutting side...Kenny will lose support if he doesnt carry true on his 2:1 ratio that was probably what got him elected

leonidas83

fliball123 wrote: »

Yeah sorry meant it that way as in for every Euro taxed 2 euros are cut..The problem I see for the gov is the CPA when you see them closing A&Es and increasing class sizes it doesnt bode well for the cutting side...Kenny will lose support if he doesnt carry true on his 2:1 ratio that was probably what got him elected

Well in all fairness, he has just about lied about everything to get into power and u turned on most of his election promises already, no surprises if he does break another one.

I think the average worker wouldnt have a problem with slight income tax increases if they could see genuine reform and proper change in other areas. Governance in this country is a joke, the political structure is outdated and has taken us to the point of ruin. We need to change it.

We need a government with enough back bone to stand up to the public sector unions and bring social welfare in line with most other European countries.

Business ventures and business in general needs to be encouraged and given incentives to grow. They are being targeted continually by regressive goverment policies,who are more interested in saving their own skin.

I knew when Labour got into power with this government, it left a really bad taste in my mouth. We need a more right wing looking government interesting in getting us out of this mess, not further deepening it.

fliball123

leonidas83 wrote: »

Well in all fairness, he has just about lied about everything to get into power and u turned on most of his election promises already, no surprises if he does break another one.

I think the average worker wouldnt have a problem with slight income tax increases if they could see genuine reform and proper change in other areas. Governance in this country is a joke, the political structure is outdated and has taken us to the point of ruin. We need to change it.

We need a government with enough back bone to stand up to the public sector unions and bring social welfare in line with most other European countries.

Business ventures and business in general needs to be encouraged and given incentives to grow. They are being targeted continually by regressive goverment policies,who are more interested in saving their own skin.

I knew when Labour got into power with this government, it left a really bad taste in my mouth. We need a more right wing looking government interesting in getting us out of this mess, not further deepening it.

I would aggree with that...there needs to be some serious reforms in all areas..as you say I wouldnt mind paying a bit more in income tax along with the up and coming stealth tax as long as the pay and penions of ps and the welfare side of things are tackled

Count Dooku

fliball123 wrote: »

Kenny will lose support if he doesnt carry true on his 2:1 ratio that was probably what got him elected

Do we have alternative for him?

fliball123

Count Dooku wrote: »

Do we have alternative for him?

I dont know but judgeing by the fact that they are cutting sh1te like A&E services and increasing class sizes to cut costs...does this not show that on the service side all the low hanging fruit are gone and the gov are going after things which will end in an uproar...Or are there other services that can be cut

Finnbar01

We need a bombfire of the quango's.

fliball123

Finnbar01 wrote: »

We need a bombfire of the quango's.

aggreed the Quangos need a bit of a shredding

Inverse to the power of one!

fliball123 wrote: »

aggreed the Quangos need a bit of a shredding

Good luck with that.

Let's be a pessimist dick and see if I'm on target in a few months:

• PS/CS - Slight trimmings of pensions and holidays with the juniors getting another kick in the balls, but nothing substantial - Business as usual.
• Cost's of govt, TD's pay, perks, etc....SFA done if anything.
• Senior Civil Servants, Quangos - Untouched
• Fags/Booze/Petrol/Anything even remotely fun Tax - UP
• Income Tax - UP
• Benefits - Down
• Education - Down
• Health - Services reduced, Salaries intact, Middle managers stay on.
• Student fee's - UP
• Stealth Taxes - Increased in number(This should be fun, who's on for a window tax?)
• Stimulus funding - Ya wha now?
• Traditional tax breaks open for abuse - left open
• Dail bar tab - UP

So there you go, austerity budgeting by the numbers, simple really, you kick the majority of low-middle income earners where it hurts, deny the young the chances your own generation were more then greedy to have, don't bother any of the sleeping dogs who might bite ya, and keep your own plush lifestyle intact....because you're worth it.

Damn....I might have a go at the next election, can't be too hard at this rate, no original thought required......

Dannyboy83

Inverse to the power of one! wrote: »

Stealth Taxes - Increased in number(This should be fun, who's on for a window tax?)

The new drink-driving stealth tax is a perfect example.

http://www.herald.ie/news/courts/drinkdriving-limit-is-cut-to-less-than-pint-2855016.html
For the average person, the new limit of 50mg of alcohol per 100ml of blood is equivalent to drinking less than a pint. It is down from the current level of 80mg.

As part of the changes being introduced in September, culprits will not automatically lose their licence for breaching the new lower limit.

Instead, an on-the-spot fine of €200 will be issued by gardai along with three penalty points.

So if you're caught with 50mg now - no bother, you're not a threat.
From September, @50mg - you must pay €200....but you're still not a threat?
:rolleyes:

Tora Bora

Heard Joan Burton interviewed by Ivan Yates this morning.
He asked a straight question "given that Enda Kenny and Eamon Gilmore have pledged no reductions, in SW rates, can you give a categorical confirmation that, this position still stands"?
After ten minutes of tooing and froing, Joan of Arc, practically said straight up, that headline SW rates will be cut as well as a whole raft of other SW entitlements. She reckons, there are between 50 and 60 different SW schemes / entitlements in operation:eek:
I guess, Michael Noonan, is getting the upper hand (backed by the troika big stick) when it comes to deciding where the cuts will fall:P

WalterMitty

Tora Bora wrote: »

Heard Joan Burton interviewed by Ivan Yates this morning.
He asked a straight question "given that Enda Kenny and Eamon Gilmore have pledged no reductions, in SW rates, can you give a categorical confirmation that, this position still stands"?
After ten minutes of tooing and froing, Joan of Arc, practically said straight up, that headline SW rates will be cut as well as a whole raft of other SW entitlements. She reckons, there are between 50 and 60 different SW schemes / entitlements in operation:eek:
I guess, Michael Noonan, is getting the upper hand (backed by the troika big stick) when it comes to deciding where the cuts will fall:P

FG and LAbour people are effectively public servants too. Their families and friends and coworkers in departments are also paid from state much of the time. They will do everything in their power to look after themselves, their friends and backers and their families above the wider community. The likes of the croke park agreement keeping consultants, judges, senior civil servants on 6 figure salaries while the likes of special needs assistants, and services to most vulnerable are cut tells you all you need to know about solidarity from this government.

murphaph

WalterMitty wrote: »

FG and LAbour people are effectively public servants too. Their families and friends and coworkers in departments are also paid from state much of the time. They will do everything in their power to look after themselves, their friends and backers and their families above the wider community. The likes of the croke park agreement keeping consultants, judges, senior civil servants on 6 figure salaries while the likes of special needs assistants, and services to most vulnerable are cut tells you all you need to know about solidarity from this government.

I would say Labour especially couldn't really give a toss about the unemployed. The best hope for the unemployed is a fiscally conservative party that will stimulate employment.

Labour, given the choice, would sooner cut SW than PS pay, no doubt about it.

Inverse to the power of one!

Tora Bora wrote: »

After ten minutes of tooing and froing, Joan of Arc, practically said straight up, that headline SW rates will be cut as well as a whole raft of other SW entitlements. She reckons, there are between 50 and 60 different SW schemes / entitlements in operation:eek:

• Benefits - Down

Dannyboy83 wrote:

So if you're caught with 50mg now - no bother, you're not a threat.
From September, @50mg - you must pay €200....but you're still not a threat?

• Stealth Taxes - Increased in number(This should be fun, who's on for a window tax?)

2 down, 11 to go. Perhaps I should take a trip down to Paddy Power and lay a bet minus the bar tab

Fish meet barrel meet chaingun....

thebman

A window tax would be great for the rich. HD cameras on the outside, HDTV's on the inside and a few real windows for where the best views are and your done. Tax mostly avoided and you get to show off your tax dodging and ingenuity at your next wine and cheese party.

the groutch

it shouldnt be just about welfare rate cuts, it should be about reform to reduce the amount of red tape, and a serious campaign to stamp out welfare fraud

ART6

"I contend that for a nation to try to tax itself into prosperity is like a man, standing in a bucket and trying to lift himself up by the handle".

-Winston Churchill

Godge

WalterMitty wrote: »

FG and LAbour people are effectively public servants too. Their families and friends and coworkers in departments are also paid from state much of the time. They will do everything in their power to look after themselves, their friends and backers and their families above the wider community. The likes of the croke park agreement keeping consultants, judges, senior civil servants on 6 figure salaries while the likes of special needs assistants, and services to most vulnerable are cut tells you all you need to know about solidarity from this government.

Special Needs Assistants are among the most overpaid staff anywhere in the public sector. Firstly, the qualifications required are extremely low, a Level 3 qualification on the NFQ as per link below.

http://www.education.ie/servlet/blobservlet/cl0021_2011.pdf?language=EN

So even though they only need the equivalent of a Junior Cert, what are they paid?

http://www.education.ie/admin/servlet/blobservlet/cl0041_2011.pdf


Yes, that is right even after all of the pay cuts, including the 10% for new entrants, the pay scale goes up to €33,605. Incredible, that means those recruited before 1 January 2011 get up to €36,965.

Don't forget they mostly work the primary school day and year (with a few days at the start and end of term thrown in). Adjust for that 30 hour week and 40 week year and you could argue that their pay (if they were working 40 hours a week and 47 weeks a year) would be €58,000.

Bonkers, and I am not known as someone who overly criticises public service pay.

johnnyskeleton

ART6 wrote: »

"I contend that for a nation to try to tax itself into prosperity is like a man, standing in a bucket and trying to lift himself up by the handle".

-Winston Churchill

But prosperity is not the purpose of tax increases. Closing the deficit is the purpose.

ei.sdraob

johnnyskeleton wrote: »

But prosperity is not the purpose of tax increases. Closing the deficit is the purpose.

Wait till they decide to spend 6 billion or so on "mortgage forgiveness" that's when things would get really fun