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What cuts will be needed to balance public spending?

  • 16-04-2012 06:50PM
    #1
    Tigerandahalf
    Registered Users, Registered Users 2 Posts: 7,835 ✭✭✭


    What more needs to be done and how far will things have to go before the country is considered to be in control of the budget?
    How much will pensions and the dole have to be cut by?
    What will water/house rates and septic tank rates finally be?
    Will public pay have to be cut further?
    Can people in the private/public sector get away without any tax increases??


«134567…14

Comments

  • #2
    The_Honeybadger
    Registered Users, Registered Users 2 Posts: 4,264 ✭✭✭The_Honeybadger


    Tigerandahalf wrote: »
    What more needs to be done and far will things have to go before the country is considered to be in control of the budget?
    How much will pensions and the dole have to be cut by?
    What will water/house rates and septic tank rates finally be?
    Will public pay have to be cut further?
    Can people in the private sector get away without any tax increases??
    The structural deficit (our annual deficit excluding the banks) is well over € 10bn. Problem is when you cut things like the dole economic activity also decreases because recipients have less money in their pockets, and this brings about a proportional decrease in tax revenue. So to close a gap of €10 bn you probably need to cut closer to €20 bn. If the current administration even tried to do anything remotely close to this you'd have greek style riots on the streets and the government would fall. All the soft cuts have been made at this stage so the next few budget are going to be really tricky. Water and property taxes are on the way, and there will surely be cuts to all welfare payments including child benefit, jobseekers payments, and maybe even the OAP. Public sector pay is protected because of teh Croke Park deal, but there would be little sympathy for PS workers if this was revisited. The IMF commented recently about what an easy ride OAP's have had so far compared to the rest of the citizens so far, that is a really difficult one to tackle because OAP's vote in large numbers and will crucify any administration that takes them on. I wonder if some of the govt ministers are secretly looking back nostalgically at their days in opposition thinking how easy it was to hurl from the ditch. They have some tough times ahead.


  • #3
    Tigerandahalf
    Registered Users, Registered Users 2 Posts: 7,835 ✭✭✭Tigerandahalf


    Yes I'd agree about OAPs. They have been v well treated. Can they justify going out on the street now though when so many of perhaps their children or neighbours' children have emigrated or are out of work? Will the gov target things like the travel scheme. It may be easier politically though I know the few older people I talk to in rural areas are very protective of it.
    Public servants have taken an average 14% paycut. Can much more be squeezed out? When some people are getting pay increases in the private sector, like in the IT sector.
    I could see the dole being cut by €20 come a few years. Pensions by €10/15. What will the various charges reach? Property €300 -500. Water €250. Septic tank €100?? Should urban dwellers pay a septic waste charge of €100 too?

    BTW..I thought the deficit was €18 billion...no?


  • #4
    Reillyman
    Closed Accounts Posts: 833 ✭✭✭Reillyman


    Tigerandahalf wrote: »
    Public servants have taken an average 14% paycut. Can much more be squeezed out? When some people are getting pay increases in the private sector, like in the IT sector.

    I never understand this argument, what does it matter what certain people get paid if they're working for a private enterprise? It's not coming out of the states pocket, on the contrary higher private salaries means more taxable income.


  • #5
    The_Honeybadger
    Registered Users, Registered Users 2 Posts: 4,264 ✭✭✭The_Honeybadger


    Tigerandahalf wrote: »
    Yes I'd agree about OAPs. They have been v well treated. Can they justify going out on the street now though when so many of perhaps their children or neighbours' children have emigrated or are out of work? Will the gov target things like the travel scheme. It may be easier politically though I know the few older people I talk to in rural areas are very protective of it.
    Public servants have taken an average 14% paycut. Can much more be squeezed out? When some people are getting pay increases in the private sector, like in the IT sector.
    I could see the dole being cut by €20 come a few years. Pensions by €10/15. What will the various charges reach? Property €300 -500. Water €250. Septic tank €100?? Should urban dwellers pay a septic waste charge of €100 too?

    BTW..I thought the deficit was €18 billion...no?
    I'm pretty sure a good chunk of the 18bn was for the banks, the structural deficit (deficit in day to day spending) is somewhere between 10 and 15 billion. OAP's will be out howling en masse if there are any cuts made to the pension or any other entitlements they have, so the govt wouldn't dare make any meaningful cuts there unless they are specifically instructed to by the Troika. Public servants have been cut by 14% but many would argue that they are still very well compensated overall, and talk of scrapping the Croke Park deal just won't go away. The CP deal expires in 2014 and the pressure to make cuts will be huge at that point unless there is a miraculous recovery in the meantime. All SW rates will need to be cut over the coming years as difficult as that may be. The health service also consumes close to 20bn a year and will need to be trimmed, this has proven to be extremely difficult, and there seems to be little appetite from within the HSE to work with the Minister in getting costs down.

    As for the rates for water and property etc, one can only guess what they will be. Most likely as high as the government feel they can set them without getting turfed out of power.


  • #6
    Tigerandahalf
    Registered Users, Registered Users 2 Posts: 7,835 ✭✭✭Tigerandahalf


    Reillyman wrote: »
    I never understand this argument, what does it matter what certain people get paid if they're working for a private enterprise? It's not coming out of the states pocket, on the contrary higher private salaries means more taxable income.

    At the end of the day it is all about fairness. Why should a person in the private sector enjoy pay increases when everyone else is getting paycuts? People have to pay for those IT services. If the wages were lower the economy would be more competitive. Many people in the private sector have taken no cuts. So should doctors, nurses, teachers, cleaners, etc roll over and take more cuts even though they can't afford the mortgage. How many mortgages are being repaid because there is a public servant with a job in the house.
    Anyway we are getting off topic.

    I thought the deficit was €18 billion. Maybe you have the correct figures. If it was only €10 billion we would be laughing. 2 budgets would do that.


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  • #7
    Godge
    Closed Accounts Posts: 21,717 ✭✭✭✭Godge


    What cuts?

    Firstly, assume that social welfare rates and public service pay continue to be frozen for the next few years.
    Secondly, take note that private sector pay has begun to rise. in general private sector companies are awarding 2% pay increases this year according to Industrial Relations News (e.g. M&S have just done a deal for 2.5%)
    These two factors mean that there will be an increase in income tax received even if rates do not go up. Also jobs will be more attractive as the gap between social welfare and pay increases.

    Next, a proper property tax could raise €1 bn at an average rate of €600 per household. Allow for water charges bringing in another €200m. Standard-rating tax allowances for pension deductions will bring in another couple of hundred million. Between it all you could have up to €1.6 bn next year in tax measures.

    On expenditure cuts, about €600m will have been paid out in pension lump sums this year. About €200 - 300m of this will be non-recurring and there should also be a smaller saving on the pay and pensions bill through non-replacement. If more continue to leave as the Government target, another €200 - 300m could be saved with a conservative target of €500m in total on the pay-bill from all of that.

    On social welfare, continued emigration, better enforcement, some reduction as people start to go back to work in 2013, as well as some savings on the margins in areas such as supplementary welfare allowance, a further cut in child benefit and rent allowance could see another €500m being saved.

    €2.6 bn from all of that is not enough but it is a start.


  • #8
    bleg
    Registered Users, Registered Users 2 Posts: 5,847 ✭✭✭bleg


    Reillyman wrote: »
    I never understand this argument, what does it matter what certain people get paid if they're working for a private enterprise? It's not coming out of the states pocket, on the contrary higher private salaries means more taxable income.




    Public servants weren't comparing themselves to IT professionals after the dotcom bubble burst and they were getting laid off left, right and centre.


  • #9
    Manach
    Moderators, Society & Culture Moderators, Paid Member Posts: 9,864 Mod ✭✭✭✭Manach


    Given the cyclical nature of the IT industry (continously changing techs that need to be mastered usually training being paid for out of own pocket) and that the money earned is from outside the Irish state, hence badly needed foreign currency - having IT as an example of "unfairness" would be stretching it.


  • #10
    the groutch
    Closed Accounts Posts: 16,096 ✭✭✭✭the groutch


    mickeyk wrote: »
    OAP's will be out howling en masse if there are any cuts made to the pension or any other entitlements they have, so the govt wouldn't dare make any meaningful cuts there unless they are specifically instructed to by the Troika.

    this is still an inherent problem with Ireland's political system.
    political parties are afraid to do what they know is the right decision in the context of the Irish economy in order to avoid p***ing off the "grey vote".
    let them do their protesting if they want, everyone else has been hammered with cuts, and now it's the turn of OAPs to share the burden.


  • #11
    Tigerandahalf
    Registered Users, Registered Users 2 Posts: 7,835 ✭✭✭Tigerandahalf


    I agree. What would a €10 cut in pensions bring in?


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  • #12
    The_Honeybadger
    Registered Users, Registered Users 2 Posts: 4,264 ✭✭✭The_Honeybadger


    the groutch wrote: »
    this is still an inherent problem with Ireland's political system.
    political parties are afraid to do what they know is the right decision in the context of the Irish economy in order to avoid p***ing off the "grey vote".
    let them do their protesting if they want, everyone else has been hammered with cuts, and now it's the turn of OAPs to share the burden.
    Agree 100%, at the very least lets means test some of the extras available, a cut in the headline rate would lead to mayhem and it will take a very strong stance from Govt to implement it. It's only fair though, as they can't keep coming back to the unemployed and PS looking for money while leaving another sector untouched, same with PS pensioners who have gotten off pretty lightly so far (I think there was a small reduction last year?). It is hard to implement austerity fairly but lets at least pretend to be trying.


  • #13
    Tigerandahalf
    Registered Users, Registered Users 2 Posts: 7,835 ✭✭✭Tigerandahalf


    Why should there be mayhem? Things have changed radically since the pensioners protested. Pensions are very good in this country in general compared to other countries. I have nothing against them. We will be pensioners ourselves someday but there has to be fairness. They have made no contribution so far even though we are 5 years into a recession.


  • #14
    the groutch
    Closed Accounts Posts: 16,096 ✭✭✭✭the groutch


    Tigerandahalf wrote: »
    I agree. What would a €10 cut in pensions bring in?

    468,000 (2006 census) x 52 x €10 = 243m?


  • #15
    The_Honeybadger
    Registered Users, Registered Users 2 Posts: 4,264 ✭✭✭The_Honeybadger


    Tigerandahalf wrote: »
    Why should there be mayhem? Things have changed radically since the pensioners protested. Pensions are very good in this country in general compared to other countries. I have nothing against them. We will be pensioners ourselves someday but there has to be fairness. They have made no contribution so far even though we are 5 years into a recession.
    Do you not remember the medical card debacle, the govt decided (very reasonably IMO) to means test the medical card for over 70's. There was war and the govt had to back down. I have nothing against them either but believe me the protest over the medical card will be nothing compared to what they will do if the headline OAP is cut. Pensioners know the power they have as a voting bloc and are experts at using it. They will portray the usual examples of elderly people going cold in their homes because they are afraid to turn on the heating etc. The truth is they are one of the most comfortable sections of society as a whole and probably the best able to take a modest reduction in their income.


  • #16
    Geuze
    Registered Users, Registered Users 2 Posts: 14,970 ✭✭✭✭Geuze


    Please note that many over 65 do not receive a State Pension. I know plenty of them.

    See www.welfare.ie , and look up the stats report to know how many people receive a State Pension.


  • #17
    GetWithIt
    Registered Users, Registered Users 2 Posts: 2,081 ✭✭✭GetWithIt


    You don't necessarily needs cuts for the sake of it. There have been plenty of reports highlighting glaring inefficiencies, changes that would not just save a lot of money but fundamentally create fairer and better services.

    A good example would be the Hunt report from 2010 which made the rather obvious suggestion of putting the allocation of Higher Education grants into a single organization rather than dispersing it around the disparate Local Authorities.
    The reform of financing must also include a reform of the procedures for means testing for students’ maintenance grants. This should be more streamlined and timely, and should be delivered through a single agency.

    Now, anecdotally everyone knows why grants are allocated at the local level. One of the reasons given at the time (1993) for the abolition of University fees was the rampant abuse of the grants system. That system has never been reformed in the interim.

    Anywho, things can't be too bad. We're still minting 1/2c pieces when other countries stopped long ago.


  • #18
    Idbatterim
    Registered Users, Registered Users 2 Posts: 18,701 ✭✭✭✭Idbatterim


    I get the problem with touching the state pension but IF and assuming it isnt cut, it should be frozen for years to come...


  • #19
    golfwallah
    Registered Users, Registered Users 2 Posts: 1,511 ✭✭✭golfwallah


    Tigerandahalf wrote: »
    Yes I'd agree about OAPs. They have been v well treated. Can they justify going out on the street now though when so many of perhaps their children or neighbours' children have emigrated or are out of work? Will the gov target things like the travel scheme. It may be easier politically though I know the few older people I talk to in rural areas are very protective of it.
    Public servants have taken an average 14% paycut. Can much more be squeezed out? When some people are getting pay increases in the private sector, like in the IT sector.
    I could see the dole being cut by €20 come a few years. Pensions by €10/15. What will the various charges reach? Property €300 -500. Water €250. Septic tank €100?? Should urban dwellers pay a septic waste charge of €100 too?

    BTW..I thought the deficit was €18 billion...no?

    As regards cuts in public expenditure, OAPs should play their part like everyone else. There can be no exceptions or preferred sectional interest groups, IMO.

    Health Minister, James Reilly, says Health reforms are on track: http://www.irishtimes.com/newspaper/ireland/2012/0416/1224314763330.html.

    Education Minister, Ruairi Quinn, indicated on radio today that he was determined to press ahead with changes in Education, regardless of electoral consequences: http://www.boards.ie/vbulletin/showthread.php?t=2056603528&page=5.

    Pay in the private sector has nothing to do with government borrowings. Unlike government, private firms have to ensure income exceeds expenditure, can’t keep borrowing to prop up deficits and have to act quickly to remain profitable / stay in business. Moreover, competition forces private firms to control costs and sets market rates for pay.

    On Current Account, Government Expenditure for 2012 at €51 Billion is set to run at €13 Billion more than Income at €38 Billion. The total deficit, including Capital Account, is €21.6 Billion. The General Government Balance is -€16.2 Billion (or -10% of GDP). For more info, see: http://budget.gov.ie/Budgets/2012/Documents/Estimates%20of%20Receipts%20and%20Expenditure%20for%20the%20Year%20ending%2031%20December%202012.pdf.


  • #20
    [Deleted User]
    Posts: 2,352 ✭✭✭ [Deleted User]


    GetWithIt wrote: »
    A good example would be the Hunt report from 2010 which made the rather obvious suggestion of putting the allocation of Higher Education grants into a single organization rather than dispersing it around the disparate Local Authorities.



    Now, anecdotally everyone knows why grants are allocated at the local level. One of the reasons given at the time (1993) for the abolition of University fees was the rampant abuse of the grants system. That system has never been reformed in the interim.

    Yep, I wonder when they'll ever get around to fixing that?

    http://www.education.ie/home/home.jsp?maincat=&pcategory=10861&ecategory=10876§ionpage=12251&language=EN&link=link001&page=1&doc=52812


    http://www.citizensinformation.ie/en/education/third_level_education/fees_and_supports_for_third_level_education/maintenance_grant_schemes_for_students_on_third_level_courses.html#ld1a9a


  • #21
    Tigerandahalf
    Registered Users, Registered Users 2 Posts: 7,835 ✭✭✭Tigerandahalf


    golfwallah wrote: »
    On Current Account, Government Expenditure for 2012 at €51 Billion is set to run at €13 Billion more than Income at €38 Billion. The total deficit, including Capital Account, is €21.6 Billion. The General Government Balance is -€16.2 Billion (or -10% of GDP).

    Can you explain this in more detail?
    So to balance our yearly spending the gov has to find only €13 billion?
    Capital Account???
    General gov balance??


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  • #22
    Fallschirmjager
    Registered Users, Registered Users 2 Posts: 3,341 ✭✭✭Fallschirmjager


    there is a substantial difference between money in the private sector and public sector money, public money is recycled money, in other words, it is created only in one place...the private sector.

    private sector money is the only place where money is 'created', for want of a better word.

    all public money is second hand money. its taken via taxes and redistributed. convincing oneself that this is somehow new money is exactly what the government wants you to believe. the public sector do not create wealth , they consume it.

    also i work in a very large IT firm. for the last 6 years you can count on one hand the pay increases people have received and when they do come, its very small. all wage growth is assumed to come from your variable component of your wage, namely what you sell. if you dont sell you dont get paid and if you dont sell, you get fired. now please spare me the comparisons with the public sector, there isnt any. and before you ask, no they are not over paid. i would be far better working in the public sector.

    the illusion that public sector wages is 'created wealth' is just that...an illusion.as i read recently its akin to taking a bucket of water from the shallow end of a pool and pouring it into the deep end and expecting the level to rise.

    we have a spending issue. for example, we have the most lucrative pay in the health service. we have over 100,000 people working in it. 1 in 40 people you meet tomorrow on the street is directly involved in the health system and whats worse is it doesnt work. the public health system is not about public health its about votes. we are in the worst possible situation now. the receivers of wealth, public sector, unemployed far outnumber the private sector as a voting block and therefore dictate policy. that is why the unions have a strangle hold, its to do with ministerial pensions and jobs and they get it by promising to take from one and give to others for votes. that is not sustainable. we are loosing, what is it now, 20,000 a year (or is it a month) to emigration. that is the biggest disaster coming next. these are the wealth creators leaving creating a smaller pool to pay for everything else. it wont work, it can never work. we have to create an environment where it is worth for people to create new companies, at the moment it simply isnt. there is onerous taxes on it and therefore that stifles risk taking. we should be encouraging risk. there is a direct relation to risk and reward. the bigger the risk, the bigger the reward should be. there is limited risk in the public sector. currently we are pillaging the private sector so much people are simply leaving. once gone, they aint coming back.

    example 2. before i pay for my pension, i pay for the public sectors. before i pay for my childrens food, i pay for the public sectors. my taxes are going to pay a pension plan far more lucrative than any in the private sector (with the possible exception of the zombie banks). its not real, its not sustainable. there simply isnt enough wealth creators. we need to draw a line in the sand now. anyone in the public sector who has a pension at say 35, there is no govt pension, go get your own. we have to draw a line under it and say this is what we owe. from memory that costs currently over 1 billion and counting per year. there isnt the money. we are borrowing to pay for wages. that is not a viable business model.

    the bad news is there is no more to give. we have to cut. sorry to be so blunt , i am not trying to annoy anyone here or insult but there is now only a small number of solutions

    1. cut and i mean draconian cuts in the public sector. i would also put term limits on public sector jobs. we have to get these people out into the private sector at some point. there should be an arbitrary limit on the amount of time, say for example 12 years. that should be in place for 95 to 99% of the staff there. speaking of term limits, there should be the same for politicians. that is the only way to stop the ridiculous family roles in irish politics. you get 2 terms and you be gone. end of.

    2. drop out of the euro. trust me i dont want this but we need to discuss this. for example if this happens, my job is gone so i do not say this lightly. we need to let our money find a real level and the bad news is its anywhere from 50-70% of a drop. this will however cause a huge amount of pain in the short term and i do mean huge. everything imported will become unaffordable from anywhere from 3-5 years. however it will make us extremely competitive for exports. our cows for example will be 50-70% cheaper that say the german ones. trying to be german with a young population on the edge of europe is simply not possible. it suits andrea merkel but not us.

    3. drop the banks like we should have at the beginning. all the money loaned via the banks is or should have been private money. like all loans, there is 2 sides a lender and a borrower. just like you with a mortgage you cant pay, you goto the lenders (in the case of the banks) and say , sorry you get 10 cent on the euro. this is business. remember there is an onus on a borrower to tell the truth (the banks didnt) but also an onus on the lender to ensure they can pay (the lenders didnt). german, french, british banks loaned here with zero checks. they bear some of the responsibility. this is what caused our boom, cheap money from abroad. if we had our own currency it would not have happened because it would have caused severe inflation early on. that didnt happen because the euro was kept low to suit germany and france. there is the real issue with the euro and i do not say that as a hater of all things europe by the way..its simple economics.

    4. start selling our oil exploration rights. we have a lot of unexplored areas off the coast, its time to sell the time shares in these areas. and please dont for one minute think the public sector can own oil fields, thats a recipe for doom.

    5. sell off and privatise all businesses we can. this will turn public sector costs in wealth creation over night. yes i know there will be people fired.

    we need to accept that the socialist model has failed and the crony capitalism that supported it is fake. the real trioka in ireland is politicians, bankers and builders. that evil partnership and the gullible who believed that house prices would rise to the moon is where our problem lay. cut public sector, cut laws stopping business creation, get the government out of the face of people looking to create businesses. create an environment that encourages rather than the current zombie feeding frenzy on business. we need a small nimble business friendly government. we will boom if this happens and until it does, we are destined to slowly sink until we become greece or spain or more likely worse than both. we are now living on fake money, this is not real, it all borrowed, it is not possible to go on like this...it will fail.

    we need to take a page from the old austrian economists and get back to reality. the good news is that irish people are very energetic. its why they do so well abroad. the question we should be asking is why cant they make it in ireland? the answer to that question is the reason they are leaving, its simply not possible with the onerous taxes and ridiculous laws we have in place. we have to really sit down and have a serious conversation on what we want for our kids. do you want to borrow on your kids kids money as we are doing now, or do you want to give them a chance...i for one want the latter....but hey, thats just my opinion...


  • #23
    thebman
    Closed Accounts Posts: 10,001 ✭✭✭✭thebman


    Tigerandahalf wrote: »
    Public servants have taken an average 14% paycut. Can much more be squeezed out? When some people are getting pay increases in the private sector, like in the IT sector.

    Mary got a pay increase, I heard someone in the pub say it so John's wage shouldn't be cut despite Mary's job and company having nothing to do with John's wage and company.


  • #24
    Bullseye1
    Closed Accounts Posts: 5,730 ✭✭✭Bullseye1


    When you have perfectly healthy people retiring after 31 years work, some at the age of 50 with tax free lump sums varying between €70,000-€100,000 and very generous pensions no wonder we are in trouble.


  • #25
    EchoO
    Closed Accounts Posts: 353 ✭✭EchoO


    What is actually going to happen over the next couple of years is pretty much set out in the IMF's memorandum of understanding.

    http://www.imf.org/external/np/loi/2010/irl/120310.pdf


  • #26
    Tigerandahalf
    Registered Users, Registered Users 2 Posts: 7,835 ✭✭✭Tigerandahalf


    I agree that people should not be retiring in their 50s. To be honest nobody should be retiring until 65 or whatever. If guards, nurses etc can't do the job on the line move them to administration. Whatever, you can't have people drawing down pensions for possibly longer than they worked. It's madness. Politicians receiving pensions at 50?? Crazy.
    However there has to be a balance. I hate this idea that the public service doesn't generate wealth. Who do you think teaches the kids, cares for the sick, provide services in various areas, protects the citizens? We all pay taxes for that. Public servants pay taxes too and spend their money creating jobs in the private sector. Yes I'm stating the obvious but sometimes it seems you have to.

    Supply/demand in the IT sector is driving up wages but many are seeing a bubble there already. When you see Facebook buying an app for 1 billion something is not right.

    At the end of the day public servants have to have enough money to pay their bills and live to some extent. If they don't they have every right to strike.


  • #27
    Tigerandahalf
    Registered Users, Registered Users 2 Posts: 7,835 ✭✭✭Tigerandahalf


    Fallschirmjager wrote: »
    there is a substantial difference between money in the private sector and public sector money, public money is recycled money, in other words, it is created only in one place...the private sector.

    private sector money is the only place where money is 'created', for want of a better word.

    all public money is second hand money. its taken via taxes and redistributed. convincing oneself that this is somehow new money is exactly what the government wants you to believe. the public sector do not create wealth , they consume it.

    also i work in a very large IT firm. for the last 6 years you can count on one hand the pay increases people have received and when they do come, its very small. all wage growth is assumed to come from your variable component of your wage, namely what you sell. if you dont sell you dont get paid and if you dont sell, you get fired. now please spare me the comparisons with the public sector, there isnt any. and before you ask, no they are not over paid. i would be far better working in the public sector.

    the illusion that public sector wages is 'created wealth' is just that...an illusion.as i read recently its akin to taking a bucket of water from the shallow end of a pool and pouring it into the deep end and expecting the level to rise.

    we have a spending issue. for example, we have the most lucrative pay in the health service. we have over 100,000 people working in it. 1 in 40 people you meet tomorrow on the street is directly involved in the health system and whats worse is it doesnt work. the public health system is not about public health its about votes. we are in the worst possible situation now. the receivers of wealth, public sector, unemployed far outnumber the private sector as a voting block and therefore dictate policy. that is why the unions have a strangle hold, its to do with ministerial pensions and jobs and they get it by promising to take from one and give to others for votes. that is not sustainable. we are loosing, what is it now, 20,000 a year (or is it a month) to emigration. that is the biggest disaster coming next. these are the wealth creators leaving creating a smaller pool to pay for everything else. it wont work, it can never work. we have to create an environment where it is worth for people to create new companies, at the moment it simply isnt. there is onerous taxes on it and therefore that stifles risk taking. we should be encouraging risk. there is a direct relation to risk and reward. the bigger the risk, the bigger the reward should be. there is limited risk in the public sector. currently we are pillaging the private sector so much people are simply leaving. once gone, they aint coming back.

    example 2. before i pay for my pension, i pay for the public sectors. before i pay for my childrens food, i pay for the public sectors. my taxes are going to pay a pension plan far more lucrative than any in the private sector (with the possible exception of the zombie banks). its not real, its not sustainable. there simply isnt enough wealth creators. we need to draw a line in the sand now. anyone in the public sector who has a pension at say 35, there is no govt pension, go get your own. we have to draw a line under it and say this is what we owe. from memory that costs currently over 1 billion and counting per year. there isnt the money. we are borrowing to pay for wages. that is not a viable business model.

    the bad news is there is no more to give. we have to cut. sorry to be so blunt , i am not trying to annoy anyone here or insult but there is now only a small number of solutions

    1. cut and i mean draconian cuts in the public sector. i would also put term limits on public sector jobs. we have to get these people out into the private sector at some point. there should be an arbitrary limit on the amount of time, say for example 12 years. that should be in place for 95 to 99% of the staff there. speaking of term limits, there should be the same for politicians. that is the only way to stop the ridiculous family roles in irish politics. you get 2 terms and you be gone. end of.

    2. drop out of the euro. trust me i dont want this but we need to discuss this. for example if this happens, my job is gone so i do not say this lightly. we need to let our money find a real level and the bad news is its anywhere from 50-70% of a drop. this will however cause a huge amount of pain in the short term and i do mean huge. everything imported will become unaffordable from anywhere from 3-5 years. however it will make us extremely competitive for exports. our cows for example will be 50-70% cheaper that say the german ones. trying to be german with a young population on the edge of europe is simply not possible. it suits andrea merkel but not us.

    3. drop the banks like we should have at the beginning. all the money loaned via the banks is or should have been private money. like all loans, there is 2 sides a lender and a borrower. just like you with a mortgage you cant pay, you goto the lenders (in the case of the banks) and say , sorry you get 10 cent on the euro. this is business. remember there is an onus on a borrower to tell the truth (the banks didnt) but also an onus on the lender to ensure they can pay (the lenders didnt). german, french, british banks loaned here with zero checks. they bear some of the responsibility. this is what caused our boom, cheap money from abroad. if we had our own currency it would not have happened because it would have caused severe inflation early on. that didnt happen because the euro was kept low to suit germany and france. there is the real issue with the euro and i do not say that as a hater of all things europe by the way..its simple economics.

    4. start selling our oil exploration rights. we have a lot of unexplored areas off the coast, its time to sell the time shares in these areas. and please dont for one minute think the public sector can own oil fields, thats a recipe for doom.

    5. sell off and privatise all businesses we can. this will turn public sector costs in wealth creation over night. yes i know there will be people fired.

    we need to accept that the socialist model has failed and the crony capitalism that supported it is fake. the real trioka in ireland is politicians, bankers and builders. that evil partnership and the gullible who believed that house prices would rise to the moon is where our problem lay. cut public sector, cut laws stopping business creation, get the government out of the face of people looking to create businesses. create an environment that encourages rather than the current zombie feeding frenzy on business. we need a small nimble business friendly government. we will boom if this happens and until it does, we are destined to slowly sink until we become greece or spain or more likely worse than both. we are now living on fake money, this is not real, it all borrowed, it is not possible to go on like this...it will fail.

    we need to take a page from the old austrian economists and get back to reality. the good news is that irish people are very energetic. its why they do so well abroad. the question we should be asking is why cant they make it in ireland? the answer to that question is the reason they are leaving, its simply not possible with the onerous taxes and ridiculous laws we have in place. we have to really sit down and have a serious conversation on what we want for our kids. do you want to borrow on your kids kids money as we are doing now, or do you want to give them a chance...i for one want the latter....but hey, thats just my opinion...

    That bolded comment I wouldn't agree with. Look what happened to eircom. These would simply attract sharks who would sack workers to create profit and then sell on the company. Loss of workers' wages, dole payments and the loss of the initial service would do the country no good.


  • #28
    Manach
    Moderators, Society & Culture Moderators, Paid Member Posts: 9,864 Mod ✭✭✭✭Manach


    Re: Eircom. From my own IT experience, a majority of similar former state concerns have become private sector successes. Does that did not, were replaced by companies that did provide successful services for the consumers.


  • #29
    Tigerandahalf
    Registered Users, Registered Users 2 Posts: 7,835 ✭✭✭Tigerandahalf


    Maybe but it is critical that certain services remain. I fear that some day in the future people who live down a lane won't have their letters delivered or will have to pay an extra charge if they do so. We all can't live in cities/suburbs.


  • #30
    WalterMitty
    Registered Users, Registered Users 2 Posts: 1,582 ✭✭✭WalterMitty


    Tigerandahalf wrote: »
    Maybe but it is critical that certain services remain. I fear that some day in the future people who live down a lane won't have their letters delivered or will have to pay an extra charge if they do so. We all can't live in cities/suburbs.
    Would it be such a burden on them to collect their mail once or twice a week in the local post office/town? Post generally isnt for urgent matters these days with internet and mobile phones.


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  • #31
    maninasia
    Registered Users, Registered Users 2 Posts: 4,633 ✭✭✭maninasia


    The world is changing at a tremendous rate. Where I am based the post office (very efficient and cheap service) also supplies Fedex services. Best of both worlds.

    State supplied services need to be opened up to different operators. If they have continually failed their mandate and focused on their own compensation instead of service provision (CIE anyone), well it's time to break them up. The problem with Eircom was that the government did not mandate regulations on it's debt load and provision of sufficient service to the public. They also allowed one company too much control over the national infrastructure, perhaps it should have been broken up and 3 companies should have been created.

    Government and public supervision is still required of course, but after how many times repeating the same old 'reviews' does it take to create genuine change?


This discussion has been closed.
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