IMF: social welfare benefits 'too high'

Heads the ball wrote: »

Im not getting involved in that discussion because its extraordinarily ridiculous in my opinion because that same flawed methodology could be applied to every department/area of spending and that certainly would stifle what another poster is calling for, which is the ability to have an economic debate without "pulling certain cards"

I am asking you a perfectly rational economic question – are there people in Ireland, currently in receipt of welfare, who could survive a cut to their benefits?

Heads the ball wrote: »

This thread is primarily about th IMF suggestion that welfare is too high. It is not an argument about "is it too low"
plus i dont see how it is unbelievable/coincidental that the welfare rate is broadly appropriate at the moment.

If it’s “broadly appropriate”, then surely welfare could be cut by a small amount and it would still be “broadly appropriate”?

You’re insisting that welfare should not be cut at all, you’re not advocating any increase in welfare rates, so the obvious conclusion is that you feel welfare payments as they currently stand are absolutely spot on. That being the case, I would ask on what metric is your conclusion based?

Heads the ball wrote: »

Answer to q1 is: "no" and do you not see how your example is an anomaly?

Answer to q2 is: lots really. Like perhaps not being on that pay rate forever and i think you are legally required to be searching for work to claim dole.

A. I'm not alone who doesn't see it as anomaly. IMF, OECD, ESRI and many others came to the same conclusion
B. The only requirement is to provide evidence, but not really search for job. Just apply for position s with guaranteed failure, that's all.

Count Dooku wrote: »

Heads the ball wrote: »

Answer to q1 is: "no" and do you not see how your example is an anomaly?

Answer to q2 is: lots really. Like perhaps not being on that pay rate forever and i think you are legally required to be searching for work to claim dole.

A. I'm not alone who doesn't see it as anomaly. IMF, OECD, ESRI and many others came to the same conclusion
B. The only requirement is to provide evidence, but not really search for job. Just apply for position s with guaranteed failure, that's all.

But it is an anomaly as the average middle class is better than the average dole person

your second point is an enforcement issue its not a rationale to cut welfare

Farmer Pudsey wrote: »

The big question is that as we need 3.5 billion of cuts at a minimum in the next budget shoild social welfare be excluded, should CS pay be excluded. If both of these are excluded then most of the pain will fall on working people.

Social Welfare makes up between 30&40% of the budget.At present it is the biggest budget in the government. If means test Child Benifit as we do not have either Tax credits for childern or for Creshe fees then the incentive to continue working or to look for a job is reduced. We already have this anomaly where earning people between 20-50K are no better off if they have a couple of childern in college

So if we have to make cuts do we protect workers or Social Welfare recipents. It is not possible to get much more tax out of the system as Tax evasion/ avoidance will be more profitable. Taxes on fuel is a tax on work and property and water rates will effect workers as there will be waivers for the unsmployed etc.

Leave welfare alone

Cut exec pay in banks,
Force the banks to pay a mandatory dividend of 500m each per annum,
Cut down on NAMA legal fees
Cut down on bank legal fees
Cut down on foreign aid
Reform Health Service and do away with the layer upon layer upon layer of costly administration and reform consultants pay

Heads the ball wrote: »

But thats not the point.

Of course it’s the point! If you accept that there are welfare recipients who could easily survive on lower payments, then you must accept that there is scope to reduce welfare.

Heads the ball wrote: »

Do you agree that there are people in that bracket who could not survive a cut?

Probably, yes. But I never said that cuts should be applied to everyone equally, did I?

Heads the ball wrote: »

I could point to any area of spending or section of society (or indeed a bank) and say is there anyone in this bracket who is getting more than they could otherwise survive on. And if the answer was "yes" that wouldnt be a rationale to go cutting it for everyone in that group.

That’s a false dichotomy - it’s not a simple choice of “cuts for all” versus “cuts for nobody”.

Heads the ball wrote: »

If someone has 20euro left at the end of the week Im afraid thats not something that upsets me given bank exec pay, bondholders and bank guarantees.

You know what? There are always going to be people in the world who make obscene amounts of money (or at least there will be for the foreseeable future). Using this fact as an excuse not to balance the national books isn’t what I would call sound fiscal policy.

Heads the ball wrote: »

But I dont think that can be justified as it would be inequitable in the current context (open-cheque-book guarantees to the banks) and I think a 10euro cut to welfare would save a disproportionately small amount of spending compared to the hardship it would cause.

I don’t think you’re really aware of the scale of Ireland’s welfare spending? Ireland currently spends about €20 billion on welfare every year (and that doesn’t include public sector pensions – another €3 billion). Cutting welfare by a very modest 5% (the cost of living in Ireland is currently about 4% lower than it was at the beginning of 2009) would save €1 billion per annum. That is a very significant saving for a very small cut in welfare – the basic rate of jobseekers’ benefit would still be a very generous €179 per week.

Heads the ball wrote: »

Thats not an obvious conclusion as I have not answered your question (for reason that it is a flawed approach to the argument) about increasing welfare rates.

No, you haven’t answered the question. In fact, you’ve gone to great lengths to avoid the question. Which leads me to conclude that you are not in favour of increasing welfare because that would be ridiculous under current circumstances.

Heads the ball wrote: »

Leave welfare alone

Cut exec pay in banks,
Force the banks to pay a mandatory dividend of 500m each per annum,
Cut down on NAMA legal fees
Cut down on bank legal fees
Cut down on foreign aid
Reform Health Service and do away with the layer upon layer upon layer of costly administration and reform consultants pay

I agree about Bank exec pay, legal fees however it will not benifit the exchequer, 500 million from the banks we might have to replace it with funding from the exchequer. Nama Legal fees, foreign Aid and reform of the health service will it save 5-600 million next year.

So best case senario is that we are still short 2.5 billion.

not yet wrote: »

Sorry..come again. working people ?
So the PS are not working people then, that's the kind of attitude that makes me want to puke.

Yeah in certain areas SW is to high, when did we cross over to rent allowance, this little beauty is costing the state 1 billion + a year. Whats with people coming into the state and receiving rent allowance after 3 months.

The reality is that in Ieland average private sector workers wage is below 28k while average PS workers wage is around 45k I think. In GB the difference is about 5K sterling. This is not sustainable. My own believe is that bench marking should be reversed and PS sector pensions should be reduced accordling. the workers in the PS who benfited from Benchmarking during the boom got a disportional pay rise compared to other PS workers also higher paid PS workers got massive pay rises and these should also be reversed. Pay in some semi-stae bodies is excessive such as Bord Gais and The ESB and the level od divident they pay the exchequer is miniscule.

The max pension that any PS worker should be entitles to is around 40K

Heads the ball wrote: »

Charity starts at home. I would rather see foreign aid cut than I would social welfare. Simple.

The fact that you are comparing welfare recipients in Ireland with those who benefit from Ireland’s foreign aid spending overseas really just serves to emphasise how utterly devoid of rationale your arguments are.

Cheerio.

djpbarry wrote: »

The fact that you are comparing welfare recipients in Ireland with those who benefit from Ireland’s foreign aid spending overseas really just serves to emphasise how utterly devoid of rationale your arguments are.

Cheerio.

Eh ok - if cutting foreign aid upsets you (which is not an unreasonable position) I am happy to retract that suggestion.

I feel it weakens the argument of the pro-cut-social-welfare argument who say "but we have no money left" when Gilmore announces 3m for Somalia.

EchoO wrote: »

Enda Kenny has said they are sticking to the programme for Government and there will be no cuts the the basic welfare rates. So where exactly the 500 million euro cut in the welfare budget is coming from is unclear.

How many pensioners are expected to die in the next 12 months?

Farmer Pudsey wrote: »

This is what I mean by the government tying it hands by FG not wanting to raise taxes and LAB not wanting to touch Croke Park and Social welafre benifits.

Taxing welfare might be a useful compromise - headline welfare rates wouldn't actually be reduced and tax revenue would be increased. Win win.