Croke Park II preliminary Talks started today

Godge · 28-01-2013 06:01PM

mfitzy wrote: »

That's nice....

Still not gona reduce our massive fiscal deficit though and daily spending over run on public expenditure.

What massive fiscal deficit? We need to find at most €5 bn in cuts as I have clearly illusrated. If the public service delivers its share of €1 bn, it is only €4 bn for the rest.

Eddie Hobbs doesn't have a clue, only an agenda. He is the epitome of the Celtic Tiger speculator who believed the hype and like the hare in the fable of old cannot believe he is losing out to the tortoises of those who avoided the hype like the people who saved instead of getting on the mortgage gravy-train or the people like me who looked at moving house but decided the whole thing was madness.

Godge · 28-01-2013 06:07PM

mfitzy wrote: »

. The tax side is now almost exhausted so apart from continuing to borrow billions and kicking the can further down the road there is nothing we can do but trim the expenditure side. If you cannot except that reality well there's frankly just no point in debating the matter with you.

.

"The tax side is now almost exhausted". Is it? Have a look at this:

http://economic-incentives.blogspot.ie/2013/01/is-ireland-low-tax-again.html

The following quote might shock you:

"For average earners Ireland is a low-taxed, low-social-insured economy. A chart ranked by total deductions is here. Ireland is at the bottom."

There is a huge argument that reducing the personal tax credit is the way to go. The preferable option would be to freeze it for ten years and let inflation eat away at the real value of it but a cut of 20% in the personal tax credit would do a lot to bring us in line with the rest of Europe when it comes to income tax. A rise in PRSI would also help. Both measures would also bring in a lot of revenue. Whether they are politically acceptable and realistic is the other side of that debate which leads me to conclude that we are unlikely to see such changes.

K-9 · 28-01-2013 06:19PM

MagicSean wrote: »

Who are "they"? I didn't pay bubble prices for my house yet I would struggle a great deal with any more paycut. The only debt I have is a car loan. Can you be more specific with your "they"?

The context of the posts was me replying to a posters saying cuts will result in more people struggling with mortgages which I presume is pretty obvious, what your car loan has to do with the CP2 talks, I don't really know.

It seems your definition of "realistic" is basically to cut a percentage of the wage of people in the public sector across the board. That's not the only realistic option, it's just the lazy one. There are plenty of "realisitc" and much fairer options.

That really is a strange reply to my posts because I never mentioned cutting pay.

K-9 · 28-01-2013 06:39PM

Godge wrote: »

"The tax side is now almost exhausted". Is it? Have a look at this:

http://economic-incentives.blogspot.ie/2013/01/is-ireland-low-tax-again.html

The following quote might shock you:

"For average earners Ireland is a low-taxed, low-social-insured economy. A chart ranked by total deductions is here. Ireland is at the bottom."

There is a huge argument that reducing the personal tax credit is the way to go. The preferable option would be to freeze it for ten years and let inflation eat away at the real value of it but a cut of 20% in the personal tax credit would do a lot to bring us in line with the rest of Europe when it comes to income tax. A rise in PRSI would also help. Both measures would also bring in a lot of revenue. Whether they are politically acceptable and realistic is the other side of that debate which leads me to conclude that we are unlikely to see such changes.

In fairness if you looked at those charts from a few years ago our rates would have been a good deal lower, for income tax anyway. Our PRSI is very low but the Government in their wisdom introduced the USC and puts it into the tax pool, not the social insurance fund, we've had VAT increases, property tax and water rates to come. We've had year on year tax increases with more to come this year.

MagicSean · 28-01-2013 07:45PM

mfitzy wrote: »

This is like going around in circles....look I don't want to see anybodies wages cut but what I "want" and "reality" are very different things.
You can blame who you like but fact remains we are still running a very large deficit. i.e. we are taking in less than we are spending. The tax side is now almost exhausted so apart from continuing to borrow billions and kicking the can further down the road there is nothing we can do but trim the expenditure side. If you cannot except that reality well there's frankly just no point in debating the matter with you.

As for leaving the EU I won't even comment on how disasterous and ridiculous a prospect that is for Ireland. Only show in town and they are lending us billions to keep the show on the road basically.

There's that word again. "Reality". The reality is that cutting wages across the board is not the only way to reduce the public sector bill. At best it is a short term micro solution with terrible long term macro implications.

And the tax side is not nearly exhausted. Sure, your average compliant PAYE worker pays his way but what about the rest? What about the ones with all the property set aside in different peoples names? What about the tax evaders? Why not focus in on them some more. Even putting aside tax, the social welfare situation is beyond a joke. I'd be surprised if even half the money paid out goes to where it is needed or deserved.

As to your white knight EU? The EU lend money because if they didn't then Ireland would default and put European banks in jeopardy.

Godge wrote: »

What massive fiscal deficit? We need to find at most €5 bn in cuts as I have clearly illusrated. If the public service delivers its share of €1 bn, it is only €4 bn for the rest.

Eddie Hobbs doesn't have a clue, only an agenda. He is the epitome of the Celtic Tiger speculator who believed the hype and like the hare in the fable of old cannot believe he is losing out to the tortoises of those who avoided the hype like the people who saved instead of getting on the mortgage gravy-train or the people like me who looked at moving house but decided the whole thing was madness.

If Eddie had taken even half the advice he gave out on that show he'd be living in a cardboard box now.

K-9 wrote: »

The context of the posts was me replying to a posters saying cuts will result in more people struggling with mortgages which I presume is pretty obvious, what your car loan has to do with the CP2 talks, I don't really know.

Yes but I'm asking who you mean when you say "they". Are you talking about public or private or both? And as the banks are nationalised now would it not be in the governments interest to ensure payments aren't defaulted on as a direct result of them cutting wages? Cut wages, watch mortgage payments reduce, pump more money into banks to compensate. Back to where you started.

K-9 wrote: »

That really is a strange reply to my posts because I never mentioned cutting pay.

Right, you just dismiss other options as "unrealistic".

What most people seem to be oblivious to is the circular nature of money. The majority of money paid to the public sector is simply returned in the form of taxes or investment in the economy. Same goes for most other expenditure that's been cut.

noodler · 28-01-2013 07:47PM

Godge wrote: »

On the other hand, as pointed out in this thread many pages back, private sector employers are now awarding 2% pay increases so that should have some effect on the domestic economy. However, the forecasts for growth from the DoF or anyone else do not rely on growth in domestic consumption. Any boost from there would be a bonus.

A couple of supermarkets giving 2% salary increase when inflation has been positive for the last two years will only do so much for growth in the real sense.

Godge wrote: »

Again, my understanding is that it is the GGB that matters for the Troika and Maastricht which is why I started from there.

In terms of our 3% 2015 target it is, but the GGB is not the actual amount we need to borrow every year.

Godge wrote: »

there are a number of other changes in there when added together get to the figure mentioned.

In terms of 2014 measures mentioned in the 2013 Budget Announcement? I didn't see them. Just the PRSI on deposits, full year property tax and pensions ceiling like I outlined.

Godge wrote: »

I was making the point illustratively that the problem isn't as difficult as one might think. Even if you leave out my two examples the figure of €2.9 bn to be found over two years means we are most of the way there with the measures already announced and/or in place.

We are already 85% of the way there in terms of the overall adjustment - I think the next two adjustments will be the toughest. 3.1bn in 2014 and 2.0bn in 2015. Troika are already suggesting that the projected Nominal GDP growth may not bring in the required revenues to make the 2015 target - not that I'm particularly bother if it comes in as 3.1% now.

Godge wrote: »

The number of unemployment claimants is beginning to shrink whether as a result of more employment or emigration or people losing benefits. Either way, and while we would all prefer it to be as a result of more jobs, any cut in the numbers claiming will be a saving.

Between Jan 2012 and December 2012 it fell by 8,000 to 432,300. It is fairly minimal in the scheme of things. Here is hoping anyway.

Godge wrote: »

The overall point of my post is that it is pointless to have people on here rabbiting on about €15bn being borrowed every year to pay the public service when the gap in public finances is somewhere in the region of €3-5 bn depending on which assumptions you use about future savings from the public service, future growth in nominal GDP etc.

Assuming you are happy enough that there won't be another 500m gap in the HSE budget this year and that all the 2013 measures will be implemented in full then we still have planned adjustments of 3.1bn + 2bn for 2014 and 2015.

It is certainly hoped that that this will be enough to get us below the 3% target but it still relies on revenues coming in as forecasted (VAT target for 2012 wasn't met - they had to move the goalposts during the year, nor Household charge target etc).

Mortgage arrears are still the biggest worry for me personally. The sheer scale compared to some of our international partners is enormous.
http://namawinelake.files.wordpress.com/2013/01/fitchjan13.jpg

carpejugulum · 28-01-2013 09:05PM

Godge wrote: »

Growth in nominal GDP in 2011 and 2012 will be close to 3%, remember that is economic growth plus inflation

Don't look at GDP. Too much of it is made by foreign companies, which repatriate the profits. Look at GNI.
That's around 0.

K-9 · 28-01-2013 10:09PM

MagicSean wrote: »

Yes but I'm asking who you mean when you say "they". Are you talking about public or private or both? And as the banks are nationalised now would it not be in the governments interest to ensure payments aren't defaulted on as a direct result of them cutting wages? Cut wages, watch mortgage payments reduce, pump more money into banks to compensate. Back to where you started.

Considering I specifically put in a mention of public service workers, because unfortunately that needs to be done on threads like this, yes I am referring to both. How you seem to have skimmed beyond my mention of the PS and frankly seemed to have dreamt up responses, i really don't know. I do recognise that PS workers have taken significant cuts to pay, that might clear whatever bone you have, up.

Right, you just dismiss other options as "unrealistic".

I actually think you are incorrectly quoting me and are replying to some other poster, it's the only rational explanation I can think of, because you seem to be imagining what I've posted. Nowhere have I mentioned pay cuts, all I said was mortgage payments are a matter between the banks and the payee and debt relief for those struggling, a wider issue than pay. The HSE is hardly responsible for a nurse getting into mortage difficulty.

In future deal with points contained in my posts, not what what you think I mean by realistic. I'm actually in agreement with you that the paybill can be cut without across the board cuts, but I'm at a loss as to why I have to outline that, seeing as none of my posts even touched on that particular subject.

Godge · 28-01-2013 10:11PM

K-9 wrote: »

In fairness if you looked at those charts from a few years ago our rates would have been a good deal lower, for income tax anyway. Our PRSI is very low but the Government in their wisdom introduced the USC and puts it into the tax pool, not the social insurance fund, we've had VAT increases, property tax and water rates to come. We've had year on year tax increases with more to come this year.

As far as I know USC was included in the calculations.

As for the other taxes, other countries have bigger property taxes, bigger water rates although our VAT rates are slightly higher.

Net point is despite the increases, our taxes remain low.

Godge · 28-01-2013 10:14PM

carpejugulum wrote: »

Don't look at GDP. Too much of it is made by foreign companies, which repatriate the profits. Look at GNI.
That's around 0.

The only obligation on us is to meet targets set by the Troika. If those targets are set in relation to GDP and we meet them, what is the point of looking at GNI or GNP or anything else?

K-9 · 28-01-2013 10:16PM

MagicSean wrote: »

Right, you just dismiss other options as "unrealistic".

Ok, just to clear this up, I was responding to a poster that suggested the Revenue reviewing P60's and implementing pay cuts based on that. That isn't going to happen under CP2, it's totally off topic.

We've already had numerous mod actions on this thread and that included soap boxing about irrelevant stuff, this isn't a thread to put forward your personal manifesto on the public or private sector.

The thread will not get closed down for posters going off topic or soapboxing, inappropiate posts will get actioned, problem posters removed and those interested in genuine discussion will carry on with that debate.

Godge · 28-01-2013 10:18PM

noodler wrote: »

A couple of supermarkets giving 2% salary increase when inflation has been positive for the last two years will only do so much for growth in the real sense.

In terms of our 3% 2015 target it is, but the GGB is not the actual amount we need to borrow every year.

In terms of 2014 measures mentioned in the 2013 Budget Announcement? I didn't see them. Just the PRSI on deposits, full year property tax and pensions ceiling like I outlined.

We are already 85% of the way there in terms of the overall adjustment - I think the next two adjustments will be the toughest. 3.1bn in 2014 and 2.0bn in 2015. Troika are already suggesting that the projected Nominal GDP growth may not bring in the required revenues to make the 2015 target - not that I'm particularly bother if it comes in as 3.1% now.

Between Jan 2012 and December 2012 it fell by 8,000 to 432,300. It is fairly minimal in the scheme of things. Here is hoping anyway.

Assuming you are happy enough that there won't be another 500m gap in the HSE budget this year and that all the 2013 measures will be implemented in full then we still have planned adjustments of 3.1bn + 2bn for 2014 and 2015.

It is certainly hoped that that this will be enough to get us below the 3% target but it still relies on revenues coming in as forecasted (VAT target for 2012 wasn't met - they had to move the goalposts during the year, nor Household charge target etc).

Mortgage arrears are still the biggest worry for me personally. The sheer scale compared to some of our international partners is enormous.
http://namawinelake.files.wordpress.com/2013/01/fitchjan13.jpg

Don't think there is that much difference between us, just me being a glass half-full kind of view and you the opposite.

MagicSean · 28-01-2013 10:26PM

K-9 wrote: »

Ok, just to clear this up, I was responding to a poster that suggested the Revenue reviewing P60's and implementing pay cuts based on that. That isn't going to happen under CP2, it's totally off topic

Why would that not happen in CP2?

K-9 · 28-01-2013 10:28PM

Godge wrote: »

As far as I know USC was included in the calculations.

As for the other taxes, other countries have bigger property taxes, bigger water rates although our VAT rates are slightly higher.

Net point is despite the increases, our taxes remain low.

As somebody who advocated not cutting taxes for a few years during the bubble, and has been amazed at our low rates of PRSI, I'm generally in agreement with you, I just think the stats ignore that increases we've had year on year since 08/09, plus the indirect taxes.

To give a practical example, people will be down the fiver a week on PRSI, that will give a small rise to the stats you quoted, but we'll also be introducing our first ever true property tax and also water rates, probably €500 minimum a year for the average household. I just think we need to be careful with the tax rises, that will be €15/20 a week for most households as many will have 2 working.

I've no moral or political problem with tax increases, it needs to be balanced though. I think welfare payments could take a small cut next time as the main spending cut as barring rent supplement, which many don't get, they haven't been touched in a couple of years.

barneystinson · 28-01-2013 10:30PM

MagicSean wrote: »

Why would that not happen in CP2?

Seriously??

Because Revenue administer the tax system, they don't unilaterally decide who gets a "paycut" and who doesn't...

K-9 · 28-01-2013 10:33PM

MagicSean wrote: »

Why would that not happen in CP2?

About as much chance as a 50% cut to pay I'd say, you think that will come up in the talks.

Can you point me to a Union wanting that, some credible evidence that this has been suggested?

Godge · 28-01-2013 10:39PM

K-9 wrote: »

As somebody who advocated not cutting taxes for a few years during the bubble, and has been amazed at our low rates of PRSI, I'm generally in agreement with you, I just think the stats ignore that increases we've had year on year since 08/09, plus the indirect taxes.

To give a practical example, people will be down the fiver a week on PRSI, that will give a small rise to the stats you quoted, but we'll also be introducing our first ever true property tax and also water rates, probably €500 minimum a year for the average household. I just think we need to be careful with the tax rises, that will be €15/20 a week for most households as many will have 2 working.

I've no moral or political problem with tax increases, it needs to be balanced though. I think welfare payments could take a small cut next time as the main spending cut as barring rent supplement, which many don't get, they haven't been touched in a couple of years.

Rather than cutting social welfare payments, taxing them would be a start. You know all of the ones such as disability and single-parent where you can earn a certain amount before losing your payment. Also if someone on social welfare has 10 kids making a lot of money on child benefit, they should pay tax. Similarly, people on three-day weeks claiming unemployment benefit for the rest of the week would be hit. All of these categories should be in the tax net, not begrudging them their payments, just saying those payments should be taxed like everyone's income.

MagicSean · 28-01-2013 10:43PM

K-9 wrote: »

About as much chance as a 50% cut to pay I'd say, you think that will come up in the talks.

Can you point me to a Union wanting that, some credible evidence that this has been suggested?

Unfortunately the negotiations are being kept under wraps. I do know that there have been some crazy demands been made on both sides though so I wouldn't rule anything out.

I don't see why an assessment based on the previous years P60 would be so unreasonable though, even if just to place someone in a bracket. It would help in tackling so called tax avoiders who adapt quickly to budget announcements and restructure things before the measures kick in.

kippy · 28-01-2013 10:45PM

MagicSean wrote: »

Unfortunately the negotiations are being kept under wraps. I do know that there have been some crazy demands been made on both sides though so I wouldn't rule anything out.

I don't see why an assessment based on the previous years P60 would be so unreasonable though, even if just to place someone in a bracket. It would help in tackling so called tax avoiders who adapt quickly to budget announcements and restructure things before the measures kick in.

I dont get the relevance of P60's or Revenue for that matter, in the context of CP2

K-9 · 28-01-2013 10:46PM

Godge wrote: »

Rather than cutting social welfare payments, taxing them would be a start. You know all of the ones such as disability and single-parent where you can earn a certain amount before losing your payment.

We already tax Unemployment and Illness benefit, taxing the dole would be a pointless exercise given our high tax credits. Cutting tax credits would solve that issue and increase the tax base in one go, and bring us into line with the UK as an example on your stats. As somebody who worked in N.I., tax and NIC kicks in much quicker than here, some change from 20 years ago. If we want free services like the UK we need to pay taxes and social insurance like they do.

Also if someone on social welfare has 10 kids making a lot of money on child benefit, they should pay tax. Similarly, people on three-day weeks claiming unemployment benefit for the rest of the week would be hit. All of these categories should be in the tax net, not begrudging them their payments, just saying those payments should be taxed like everyone's income.

Fair enough points, would help both the private and public sectors.

MagicSean · 28-01-2013 10:47PM

Godge wrote: »

Rather than cutting social welfare payments, taxing them would be a start. You know all of the ones such as disability and single-parent where you can earn a certain amount before losing your payment. Also if someone on social welfare has 10 kids making a lot of money on child benefit, they should pay tax. Similarly, people on three-day weeks claiming unemployment benefit for the rest of the week would be hit. All of these categories should be in the tax net, not begrudging them their payments, just saying those payments should be taxed like everyone's income.

Means testing and cutting down on fraud would be all that would be required imho. means testing would obviously reduce payments to some but I doubt it would have a dramatic effect. What i would do is take a bunch of workers from other departments, assign a few Gardaí and someone from the dpps office to them and dedicate them to identifying and prosecuting fraudsters. The money they save would very likely make up for the money that would have been saved by cutting their wage or their job.

barneystinson · 28-01-2013 10:47PM

MagicSean wrote: »

Unfortunately the negotiations are being kept under wraps. I do know that there have been some crazy demands been made on both sides though so I wouldn't rule anything out.

I don't see why an assessment based on the previous years P60 would be so unreasonable though, even if just to place someone in a bracket. It would help in tackling so called tax avoiders who adapt quickly to budget announcements and restructure things before the measures kick in.

kippy wrote: »

I dont get the relevance of P60's or Revenue for that matter, in the context of CP2

Me either, I'm intrigued! Can you explain what you mean Sean, and how in the name of God it would work...?!

road_high · 28-01-2013 10:49PM

Godge wrote: »

Rather than cutting social welfare payments, taxing them would be a start. You know all of the ones such as disability and single-parent where you can earn a certain amount before losing your payment. Also if someone on social welfare has 10 kids making a lot of money on child benefit, they should pay tax. Similarly, people on three-day weeks claiming unemployment benefit for the rest of the week would be hit. All of these categories should be in the tax net, not begrudging them their payments, just saying those payments should be taxed like everyone's income.

I agree. The gap between working and social welfare is too narrow at present and in many cases just not worth it. Especially when you factor in medical card, rent allowance etc taking a lower paid job (or even a half decent one) vs welfare is a no brainer. Not to mention the cost of getting to work thanks to now extortionate taxes on fuel and public transport increases.
I know this is about CP2 but still relevant in my view as this is public money too and needs to discussed. And I'm sure it's discussed to death on other threads here.

doc_17 · 28-01-2013 10:53PM

I work in the PS and I would prefer the pay cut option rather than negotiate with the government. They are going to get their reductions in payroll, whether it is negotiated or imposed.

If it is negotiated we will have to give up more and still have our pay reduced anyway.

MagicSean · 28-01-2013 10:53PM

kippy wrote: »

I dont get the relevance of P60's or Revenue for that matter, in the context of CP2

The big issue in the PS is net pay. People harp on about the gross pay figures all the time without realising the number of mandatory deductions and taxes that actually come out of that. Then you have allowances as well. Lots of allowances out there but how many are taxed and not?

If the pay bill stays the same but the taxes increase shoudl that not be considered a saving? I can't really see how you cando CP2 without discussing the revenue or P60s.

MagicSean · 28-01-2013 10:55PM

barneystinson wrote: »

Me either, I'm intrigued! Can you explain what you mean Sean, and how in the name of God it would work...?!

I'm not saying it would work effectively. I'm suggesting it's not a completely ridiculous method that should be dismissed outright.

K-9 · 28-01-2013 10:56PM

MagicSean wrote: »

Unfortunately the negotiations are being kept under wraps. I do know that there have been some crazy demands been made on both sides though so I wouldn't rule anything out.

I don't see why an assessment based on the previous years P60 would be so unreasonable though, even if just to place someone in a bracket. It would help in tackling so called tax avoiders who adapt quickly to budget announcements and restructure things before the measures kick in.

They already have Revenue Audit staff who do a pretty good job.

And nobody needs to bring in a P60 seeing as Revenue have that information available at the touch of a button, shows how much thought was put into that idea. All I expect is a little bit of thought into responses, anybody interested in tit for tat responses isn't welcome on this forum.

It could be time to declare a tax amnesty and then target areas of specific concern, no need to go through everybody's P60 or tax return.

MagicSean · 28-01-2013 10:56PM

barneystinson wrote: »

Seriously??

Because Revenue administer the tax system, they don't unilaterally decide who gets a "paycut" and who doesn't...

Nobody is suggesting they do.

barneystinson · 28-01-2013 11:02PM

MagicSean wrote: »

The big issue in the PS is net pay. People harp on about the gross pay figures all the time without realising the number of mandatory deductions and taxes that actually come out of that. Then you have allowances as well. Lots of allowances out there but how many are taxed and not?

If the pay bill stays the same but the taxes increase shoudl that not be considered a saving? I can't really see how you cando CP2 without discussing the revenue or P60s.

Nope, still making absolutely no sense whatsoever I'm afraid Sean.

Now it looks like you want to look at people's Net pay - a figure which is arrived at only after looking at all the other circumstances of the individual (or couple, or family) in question.

What if they have a self-employed source of income, or a portfolio of properties or are independently wealthy from an inheritance etc...

Your suggestion just shows you haven't really thought this through.

Unless I'm misunderstanding what you're suggesting (because you haven't been very clear)?

MagicSean · 28-01-2013 11:03PM

K-9 wrote: »

They already have Revenue Audit staff who do a pretty good job.

And nobody needs to bring in a P60 seeing as Revenue have that information available at the touch of a button, shows how much thought was put into that idea. All I expect is a little bit of thought into responses, anybody interested in tit for tat responses isn't welcome on this forum.

It could be time to declare a tax amnesty and then target areas of specific concern, no need to go through everybody's P60 or tax return.

Are you suggesting I am not welcome or is that aimed at someone else?

The revenue audit staff cant do anything because tax avoidance is not illegal. A person sees a proposed system announced in december for january. They rearrange their affairs before it is introduced so that they dont get hit by this new system. They have done nothing wrong or illegal. But if they are assessed on the previous years then their avoidance doesn't work.

Croke Park II preliminary Talks started today

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