Budget 2009

[Ringo]

So far the word on the street is as i see it at the moment



No increase in taxes
Childrens allowence to be reduced/taxed
Job seekers allowence to be halfed for those up 24
They will still pay Childrens allowence to children living outside the state whose parent works in the state.
No christmas bonus return.
Petrol to be taxed further.
Public servants pay to be reduced by 7.5%
TD's & higher public servants to take substantial pay cut

[dahamsta]

I'd be very surprised if there wasn't another addition to the "levy", or a "normalisation" of the "levy" that results in higher taxes anyway.

[Macy]

No increase in taxes
There will be tax increases - narrowing of bands, reduced allowances etc. "No new taxes" doesn't mean no tax increases, but there will be non-ringfenced carbon taxes


Childrens allowence to be reduced/taxed
Job seekers allowence to be halfed for those up 24
They will still pay Childrens allowence to children living outside the state whose parent works in the state.
No christmas bonus return.
Social Welfare will be an across the board cut. Taxing/ means testing is too inefficient.
They have no choice on the Childrens allowance point, EU laws.



Petrol to be taxed further.

"Carbon Tax"


Public servants pay to be reduced by 7.5%

Given the sustained campaign this week by the Government, it's inevitable.



TD's & higher public servants to take substantial pay cut
[/LIST]
It won't be that substantial - just enough that they can try and portray it as being substantial. I'd actually expect it to be the same bull as the ministerial pensions and long service, where they'll claim they can't do it this Dáil!

There certainly won't be anything targetting the wealthy, tax exiles or closing avoidance loopholes.

[micls]

Public servants pay to be reduced by 7.5%
[/LIST]

Is this just to be an across the board cut?

If so it's ridiculous imo. Surely a sliding scale, protecting those on lower incomes and hitting those who can afford it more makes more sense?

[Ringo]

There certainly won't be anything targetting the wealthy, tax exiles or closing avoidance loopholes.

I always feel this is a Joe Duffy line. There aren't enough rich people to sort this problem out.Even if we taxed them 80 cent in the euro. Tax exiles are living abroad legally.

[noby]

That's where the 'closing avoidance loopholes' comes into it though.

[OneRedArmy]

I always feel this is a Joe Duffy line. There aren't enough rich people to sort this problem out.Even if we taxed them 80 cent in the euro. Tax exiles are living abroad legally.You're spot on. Its populism at its finest. Its now been admitted that the 50% super tax rate in the UK is actually going to be revenue negative, as the highest tax payers are those most able to readily leave the jurisdiction and re-domicile when things move against them.

Whilst the morality of increasing taxes as income rises is pretty clear (to me anyway), unfortunately it doesn't make financial sense.

As an aside, iirc as it is currently, circa 50% of tax is paid by the top 5% of earners.


That's where the 'closing avoidance loopholes' comes into it though.Are you going to shut the borders? Stop people visiting?

There will always be lower tax destinations willing to take them.

[John83]

As an aside, iirc as it is currently, circa 50% of tax is paid by the top 5% of earners.
Something like that.

I'm irritated by people who think there's a simple solution, some reserve of injustice that could be tapped to balance the budget. I saw a guy in the audience of Questions and Answers recently, arguing that we should seize money from developers who made so much during the boom. An economist on the panel rephrased what he'd said as an emergency tax on the wealthy. The man insisted that this wasn't a tax, that he wanted no more taxes. He wouldn't let this go. If you've sympathy for him, look up what the word "tax" means. He'd lost me even before I bothered to consider the implications of doing what he was suggesting - clearly, he had no idea what he was talking about.

[dahamsta]

Are you going to shut the borders? Stop people visiting?It's not an answer to our financial problems, but aside from that, we should absolutely cancel their Irish passports. If they don't want to pay taxes here that's their lookout, but if they're not willing to accept the responsibility of being Irish, then they don't deserve to call themselves Irish.

[John83]

It's not an answer to our financial problems, but aside from that, we should absolutely cancel their Irish passports. If they don't want to pay taxes here that's their lookout, but they can use the passport of the haven they've decided to live in.
Given our status as a corporate tax haven, that might make the list of the top, oh, five or ten thousand most hypocritical things we'd have ever done as a nation.

[dahamsta]

Ireland prospers on hypocrisy, and corruption of course. You couldn't have picked a better example than our corporate tax regime, which made us - well, some people anyway, certainly not me - incredibly rich and incredibly vulnerable in one foul swoop.

[OneRedArmy]

It's not an answer to our financial problems, but aside from that, we should absolutely cancel their Irish passports. If they don't want to pay taxes here that's their lookout, but if they're not willing to accept the responsibility of being Irish, then they don't deserve to call themselves Irish.Agree.

The Revenue made one good move (only in the last year?) where they redefined their definition of what a day constitutes for tax residency purposes. Previously, if you were out of the country on the stroke of midnight, you were not resident in Ireland on that day, allowing you to exclude it from the 169 (something like that anyway?) day residency requirement. Apparently for a period you had a queue of private jets on the runway at Dublin Airport every night at 11.45, which took off, took a spin into international airspace, and returned at 12.05.

Now I believe the definition has been changed to count it as a tax day if you are in the country at any point during the day.

A bit like the drink driving stuff, its a combination of poor rules and I would argue, worse enforcement, that leads to situations like this.

[Macy]

Taxing the wealthy, hitting tax exiles for some of their just deserts and closing loopholes may not bring in a hell of a lot of revenue. However, if you're going to hit social welfare recipients with cuts, cut pay of workers, and increase the tax burden on lower income tax payers, the wealthy have to be seen to also take their fair share of the hit. Afterall, they're the ones that were on the pigs back during the boom and bubble (where the pay gap widened).

For all the garbage that lenihan, and the media (who just happen to be controlled by tax exiles) come out with about the amount the wealthy contribute, there marginal rate doesn't compare with the PAYE worker. The x number of tax payers who don't pay any tax includes millionaires and billionaires who (legitimately) avoid tax.

Or are the usual suspects on this thread suggesting that only social welfare recipients, PAYE workers, and public servants should pay the price, whilst the wealthy walk away as they were?

[Dodge]

You're spot on. Its populism at its finest.

As opposed to the attack on the public service?

[OneRedArmy]

Or are the usual suspects on this thread suggesting that only social welfare recipients, PAYE workers, and public servants should pay the price, whilst the wealthy walk away as they were?
You take action that, through the least amount of pain, balances the budget.

If introducing a punitive tax rate on higher earnings is revenue negative, then whilst it might make us feel better from a moral standpoint, the actual effect would be to increase the size of the cuts made elsewhere. Unless it can be proved taxing the ultrawealthy more would be effective for revenue, then its simply a smokescreen (or as someone said last week "Joe Duffy politics").

It then comes down to how much of the burden the public vs private sector PAYE worker respectively shares. It has been stated that we need to roll back our standard of living to 2003 levels in order to reduce the budget deficit. If we look at the change in earnings since then, it is clear as day that the public sector has significantly more than the private sector in that time period, mostly because many of the advances made by the private sector have been eroded in the last 18 months. In comparison, public sector pay, despite a hiring ban and the pensions levy, continues to rise. This might be unfair, but its totally unsustainable.

So in rolling back standards of living to 2003 levels, its the public sector that has to bear the brunt of the cuts, as the private sector has already undergone huge adjustments.

The unions have recognised this, as they have changed tack in the last fortnight and are now attacking the timeframe for reducing the budget deficit, which is completely self-serving and reckless IMO.

The duplicity is staggering. When selective use of the ESRI data was driving benchmarking awards a few years ago the unions weren't complaining about its accuracy, now the ESRI are a puppet of special business interests and the output completely unreliable :rolleyes:

Its also conveniently forgotten that one of the key reasons that cuts in public sector spending automatically becomes a wage cutting issue is that the public sector is significantly more resistant to changes in working practice than most of the private sector. This is also the reason that the good, honest workers in the public sector, of which there are a huge amount, get tarred with the "jobsworth" label, which is completely unfair. The tolerance of completely outdated and anachronistic working practices, sidebar agreements and generally inefficient working processes reduces productivity and provides both a hiding place and a safety blanket for poor performers, at the expense of honest, hard working staff (of whatever rank).

And here's the clincher, its the unions protection of these outdated working practices and by extension, the protection of the lazy jobsworths that result in across the board paycuts which by their nature will always be unfair.

These are my own views, formed through over 10 years experience working with various state, semi-state and public departments and bodies.

[dahamsta]

In a decent society, you do both.

You're in a forum ORA, not the Dail. The hardline stance doesn't really achieve anything in here. :)

[OneRedArmy]

In a decent society, you do both.

You're in a forum ORA, not the Dail. The hardline stance doesn't really achieve anything in here. :)The quality of discussion on here is much better than the Dail.

Less people get thrown out of foot.ie for poor behaviour for a start :D

[John83]

And no one's pandering to the media or their constituents.

[dahamsta]

In Ireland, we have people that want to be Irish, but don't want to pay any taxes.

In Germany, some wealthy citizens want to pay more (http://news.bbc.co.uk/2/hi/europe/8321967.stm).

adam

[John83]

In Ireland, we have people that want to be Irish, but don't want to pay any taxes.

In Germany, some wealthy citizens want to pay more (http://news.bbc.co.uk/2/hi/europe/8321967.stm).

adam
http://www.irishtimes.com/newspaper/frontpage/2009/0929/1224255444270.html

[dahamsta]

They shouldn't have been excluded in the first place. Renumeration wasn't being reduced, they were being taxed more, just like everyone else. Gov.ie just didn't have the balls (or interest) to implement it.

[John83]

They shouldn't have been excluded in the first place. Renumeration wasn't being reduced, they were being taxed more, just like everyone else. Gov.ie just didn't have the balls (or interest) to implement it.
Irrelevant. They didn't have to pay it (rightly or wrongly). They did anyway. That counts as rich people offering to pay more tax in my book.

[dahamsta]

I don't think I'd be able to read your book John83, it sounds awful. :)

By my reading, half of them were shamed into it, and the rest are just shameless.

[John83]

By my reading, half of them were shamed into it, and the rest are just shameless.
That's fair. I don't know that I'd have been too eager to hand over money I didn't have to in their place though.

[dahamsta]

I think I would if I could afford it, and if I couldn't afford it then I'd need to look at how I was living. Judges earn plenty.

However it should never have cropped up in the first place, as I said earlier.

[Ringo]

TAOISEACH Brian Cowen will next week call the bluff of Enda Kenny and Eamon Gilmore by directly challenging them to detail how they would cut €4bn to salvage the public finances.

The Fine Gael and Labour leaders have so far refused to say where they would find the money to stave off the social welfare cuts being planned by the Government.
http://www.independent.ie/national-news/cowen-to-call-budget-bluff-of-kenny-gilmore-1940232.html

The mantra seems to be yes we need cuts , but someone else has to take the hit. More taxes seems to be the oppositions solution.:mad:

[Macy]

If they've any sense they'll come back with "let us see all the books and projections", which the Government won't do (and haven't in the past when they've been asked). Same as Lenihan earlier in the year, FF want it as a one sided act of good faith - party interest ahead of national interest.

Labour and FG normally publish alternative proposals anyway - Labour certainly did in April. Nice to see INM still see which side their bread is buttered on if they deem that worthy of the main headline.

[passinginterest]

Fergus Finlay has an excellent article on Public Service pay cuts in the Examiner:

THINK if I were a public servant today, I’d be mad as hell.

With a few well documented political exceptions, I’ve never known anyone who went into the public service to make money.

In fact if you wanted to make money, the last place you’d go for a career is into the public service.

Some people choose a public service career for security and many choose it because it offers the chance to do something or to be something they’ve always wanted to be. A nurse, a doctor, a teacher, a fireman. To work at healing the sick, catching the baddies, teaching the kids — I’ve known people who grew up from childhood wanting to do just that, and who have found tremendous fulfilment from following a chosen career as a public servant.

Read more: http://www.examiner.ie/opinion/columnists/fergus-finlay/public-sector-pay-cuts-unfair-and-counter-productive-on-the-tax-front-105725.html

[OneRedArmy]

Surely if people didn't go into the public sector for the money the cuts shouldn't bother them?

I'm still trying to get my head around striking at the mere concept of cuts even before the details are announced. To me, that shows a fairly clear statement that its about the money.

[John83]

I don't agree with what you've quoted there. The public sector spent the last decade with their hands out, even striking for pay increases (teachers, nurses, junior doctors (or was that only for better hours - though with their hours cut, they now want compensation for lost overtime pay), gardaí (technically 11 years ago)), and pushing hard to have their pay benchmarked against the private sector. Now, when the private sector is seeing massive pay reductions and layoffs, they're fighting to hold what they have. They want it both ways, and a 'they just want to heal the sick and teach children' soft focus doesn't ring true any more, if it ever did.

[dahamsta]

I don't think I know anyone that wouldn't be bothered by a pay cut, at any level of society.

[osarusan]

Surely if people didn't go into the public sector for the money the cuts shouldn't bother them?Just because you are doing a job you know, and have always known, will never make you really rich, you are not entitled to be worried about salary cuts?

[OneRedArmy]

If the Gardai are so eager to serve, why are an unprecedented number taking early retirement this year? Anything to do with the fear that their ridiculous "best three years earnings" pensions calculation is on the chopping board?

People don't like getting things taken away from them. Clearly the solution was not to pay unaffordable increases over the last decade to a cohort where the increases can't easily be taken back.

I believe Adam's prediction of widespread unrest/winter of discontent is at least 50-50 at this stage. The unions can't back down, they'll be signing their death warrant.


Just because you are doing a job you know, and have always known, will never make you really rich, you are not entitled to be worried about salary cuts?I'm not sure what "rich" means? The average public sector worker is richer than the private sector worker in many cases, as demonstrated by lots of studies.

[dahamsta]

I've deleted the personal stuff from osarusan's comment, and ORA's reply.

osarusan, if you can't comment without the personal stuff, don't comment. ORA, you're entitled to your opinion but at this stage your cynicism is bordering on trolling. Knock it on the head please, or find somewhere else to post it.

Back on topic.

[John83]

I don't think I know anyone that wouldn't be bothered by a pay cut, at any level of society.
Is this aimed at me, Adam? I'm assuming so because of it immediately following my post.

I'm not saying that they are or should be happy to cut their pay. I'm just saying that I dislike happy clappy newspaper comment columns portraying them as poor, underprivileged, saintly victims being picked on by the government.

[dahamsta]

Is this aimed at me, Adam? I'm assuming so because of it immediately following my post.No. Read the post before yours.

[NeilMcD]

Is this aimed at me, Adam? I'm assuming so because of it immediately following my post.

I'm not saying that they are or should be happy to cut their pay. I'm just saying that I dislike happy clappy newspaper comment columns portraying them as poor, underprivileged, saintly victims being picked on by the government.

You would have to agree that these articles are drowned out in the media by far more anti public service than pro public service. Regardless of your view on these issues, the media coverage has been very biased against the unions and public service and to be honest, the media in general are nearly always anti union. Finlay and O Toole are the only 2 articles I have read that are in support of the public sectory unions. Obviosly this is disgarding, any socialist papers or sinn fein papers etc.

[Dodge]

Spot on Neil. Indo being particularly agressive in thier "reporting"

[John83]

I can't say I pay enough attention to 'news' commentary these days to establish whether there's a bias Neil. Most of them are unbalanced dreck.

[Macy]

Morning Ireland this morning discredited a survey on private sector pay rises because it was based on averages, after leading on every survey on Private v Public sector pay based on averages. Average pay comparisons aren't valid, but it was an amazing turnaround of opinion from previous reports now it didn't suit their agenda. Lawlor point blank refused to let the IMPACT guy make his point on it and come back after her discrediting it.

There's very little balance in the media - RTE tows the Government line, Newstalk and Today FM controlled by O'Brien, and the Indo controlled by O'Reilly (even if you ignore that organisations history). The best of a bias lot is the Times print wise, Brawn on TV3 isn't bad (when he doesn't get distracted by the minutia, and it's more his opinion driven rather than balanced)

[dahamsta]

The Independent group is essentially controlled by O'Brien now, although it's been suggested - by The Phoenix, so pinch of salt - that O'Brien and O'Reilly have declared a truce.

[Macy]

The Independent group is essentially controlled by O'Brien now, although it's been suggested - by The Phoenix, so pinch of salt - that O'Brien and O'Reilly have declared a truce.
Cut from the same anti union (and by extension worker) cloth anyway, so the point still stands. The Indo's anti union history goes back a lot further than the pair of them anyway.

[twoenz]

A bit like the drink driving stuff, its a combination of poor rules and I would argue, worse enforcement, that leads to situations like this.


A friend of mine who works in a financial institution has always pointed out that however much someone in government is paid to come up with a law there's 4 or 5 people who are paid much more working on ways to get around that law for themselves/their company.

[Ringo]

The most leaked budget ever is here, not going to be too many surprises.

http://www.irishtimes.com/newspaper/frontpage/2009/1209/1224260356458.html


The biggest item in the budget will be €1.3 billion in pay cuts for the public service, ranging from 5 per cent for those on average pay to 15 per cent for those at the most senior level in the public service. Ministers will also take a 15 per cent pay cut while the Taoiseach’s pay will be reduced by 20 per cent.

The cuts in social welfare rates will range from about 4 per cent for those claiming jobseekers’ allowance to 10 per cent in child benefit.

Cuts in disability benefit and carers’ allowances are expected to cause most political difficulty for the Government but all of the welfare cuts are expected to generate controversy.

One group who will be exempt from cuts are pensioners. Government sources have made it clear that the old-age pension will not be touched by the welfare cuts.

The pensions of retired public servants and politicians will be exempt from cuts in line with pay, although they were tied to pay increases on the way up. It means that public service pensioners on full entitlements will now have close to 70 per cent of the salaries paid in their former grades.

The capital budget will also suffer a cut of close to €1 billion although the Minister will point to declining tendering prices as an indication that the impact on planned projects will not be as severe as might be feared

This will involve an increase of about five cent in a litre of petrol, €54 in 1,000 litres of home heating oil, 48 cent on a bale of briquettes and €56 on a tonne of coal.

Income tax rates are not expected to change and there is also expected to be minimal change in tax bands or credits, although Mr Lenihan has been pointing to the fact that leaving bands and credits alone will mean that about 50 per cent of the workforce will be entirely out of the income tax net.

[saint dog]

The pensions of retired public servants and politicians will be exempt from cuts in line with pay, although they were tied to pay increases on the way up. It means that public service pensioners on full entitlements will now have close to 70 per cent of the salaries paid in their former grades.


think this part of it is a bit unfair , pensions went up in the good times but now wont be touched , 70% of your finishing salary is a fair wack alright , i know people will says its unfair to hit the pensioners but what goes up must come down
everything else i think is fair in the climate were in today .

[twoenz]

think this part of it is a bit unfair , pensions went up in the good times but now wont be touched , 70% of your finishing salary is a fair wack alright , i know people will says its unfair to hit the pensioners but what goes up must come down
everything else i think is fair in the climate were in today .

70% of a salary in this day and age from the state is far too high a figure to be sustainable in the longer term.

[Dodge]

think this part of it is a bit unfair , pensions went up in the good times but now wont be touched , 70% of your finishing salary is a fair wack alright , i know people will says its unfair to hit the pensioners but what goes up must come down


Its a maximum of 50% of their finishing salary. The above article opines that the pension would be 70% of the equivalent new pay scale. For that to happen we're talking about only the very high earners. For someone to finish on 60k a year, their pension would be 30k per year now. For it to reach 70% the pay sclae would have to drop to 43k.

Fairly annoying how papers use the high earners as standard, even when they all agree that 15,000 of the 315,000 public servants earn over 100k

Not to mention that the state pension contributes to a public servants pension

[NeilMcD]

http://www.independent.ie/national-news/budget/comment-reaction/david-begg-if-todays-cuts-go-too-far-economy-will-get-the-snip-1968036.html

[dahamsta]

An article by David Begg expounding the opinions of a Credit Suisse boss, in the Independent. I'm not sure people should be allowed to read it.

[NeilMcD]

That is why I I think David Begg is credible and should be taken seriously. As he is not some guy who hangs on to old cliches or ideologys. He comes across as very practical and reasonable in my view.