# Who speaks for the squeezed middle in the pre-budget submissions?



## gnf_ireland

*I am not sure if this is the right forum to post this, so mods please feel free to move it if you think there is a better one*

With pre-budget submissions coming thick and fast over the next few weeks, I am wondering who is speaking on behalf of the squeezed middle? Those on around the 55k mark (as defined by the Institute of Taxation), and pay more tax than Sweden, Switzerland, UK, USA or Spain, paying 49.5% of their income in taxes & levies. They take home around 6400 a month between them.

[broken link removed]

Those who can barely afford the average 3 bed semi house in Dublin (404k -10% deposit =3.3 times a couple earning 55k each salary), paying around 1800 euro a month in mortgage repayments - among the highest in Europe.

They do not qualify for the Affordable Childcare Scheme, so pay around 1000 a month for each child in creche. Despite not being eligible for the subsidy, they still have to pay the creche increases that appear to have coincided with the scheme. 

If they are out of the creche system, they are may be availing of 'free education' but probably need some sort of after school care for the kids. All costs money and little to no support there for them.

If they are lucky, they put in 5% of their salary into a pension fund, matched by their employer, providing them with 'eye watering' security in their old age. They look at the ongoing (small) increases in the state pension, wondering will there be such a thing by the time they reach that age.

Those in the 'squeezed middle' wonder how they have ended up in this situation. They try to play by the rules as best they can and get on with life, but feel they have nothing to show for the hard slog. 

So I am wondering is there any lobby group or political movement speaking on behalf of those who help keep the system ticking over? Who should I look out for over the next few weeks to hear their ideas/proposals?
There appears to be no shortage of those willing to speak on behalf of the 'non-working class' and those on lower incomes. The elitist group will always have some voice in government.

Leo says he wants to lead a government for those who "get up early in the morning", but I don't believe Fine Gael represents this demographic.... so who does?


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## Purple

€55,000 x 2 earners is a single tax case on €110,000 a year. That's not the middle by any count.
If you think you are being hit hard try being a single income earner on that salary. Now they really are hit hard.

The "Squeezed Middle"; a couple with a few kids on a combined income of €55,000 , will pay about €3,500 in total payroll taxes and will get €3,360 back in child Benefit. That's a net payment of around €140 a year or €2.70 a week. I don't think that can be called squeezed. I'd call it grossly under taxed.
The people who are earning more than that are hammered. If they are single and high earners they are totally screwed by the taxation system. A single earner who wants the same take home pay at the "Squeezed Middle" family (€54,860) has to have gross earnings of nearly €88,000.


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## dub_nerd

gnf_ireland said:


> Those on around the 55k mark (as defined by the Institute of Taxation), and pay more tax than Sweden, Switzerland, UK, USA or Spain, paying 49.5% of their income in taxes & levies. They take home around 6400 a month between them.



I don't understand the arithmetic here. 6,400/month x 12 = 76.8k which is 70% of 2 x 55k. Where does the 49.5% tax figure come from? -- it looks like only 30%.


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## gnf_ireland

dub_nerd said:


> I don't understand the arithmetic here. 6,400/month x 12 = 76.8k which is 70% of 2 x 55k. Where does the 49.5% tax figure come from? -- it looks like only 30%.



Apologies, I should have said marginal tax rate of 49.5% - I was quoting too quickly from the Institute of Taxation's summary findings.

I am guessing from your comment, you believe 30% is an acceptable amount of tax to pay in general on this sort of salary. I probably would agree with you on this


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## gnf_ireland

Purple said:


> €55,000 x 2 earners is a single tax case on €110,000 a year. That's not the middle by any count.


Maybe I read the Institute of Taxation report incorrectly. I read it as individuals/couples making 55k a year each. Maybe it just referred to an individual making 55k and excludes couples/families.

If a couple earning 110k is not middle by any count, can you help me in understanding who is able to purchase houses in Dublin in this climate? The average cost of a 3 bed semi is 400k odd, and assuming a 10% deposit and 3.5 times Loan to Income, they barely make the cut. Surely a couple who purchase an average sized house in Dublin are middle in some regard ??? 



Purple said:


> The "Squeezed Middle"; a couple with a few kids on a combined income of €55,000 , will pay about €3,500 in total payroll taxes and will get €3,360 back in child Benefit. That's a net payment of around €140 a year or €2.70 a week. I don't think that can be called squeezed. I'd call it grossly under taxed.


Ok, I can accept this regarding taxation - this is why I considered the squeezed middle from a taxation point of view to be double that




Purple said:


> If you think you are being hit hard try being a single income earner on that salary. Now they really are hit hard.


Without getting into details, I do not fall into either definition of the Squeezed Middle, so its not related to me personally.


Let me try and re-phrase what I was trying to ask - who speaks in the pre-budget submission on behalf of the hard working, reasonable income families who get taxed to the hint and get very little in return? Who are the voices that say no to increases in social welfare etc etc. Who is speaking on behalf of this group ?


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## Protocol

FG is meant to be speaking on their behalf.

Nobody in Ireland pays 49.5% effective tax rate.

But many people face a 50% marginal tax rate.

Don't confuse the *marginal *tax rate with the *average *tax rate.

It's MTR that are crazy high for ordinary workers in Ireland, not ATRs.


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## Protocol

My parents earn 49k approx, and pay under 10% direct taxes.

They get:

two medical cards
two free travel passes
free TV licence
35pm / 420 pa offf their elec bill

They are *undertaxed *compared to other countries, and compared to the benefits they get.


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## Protocol

The 50% approx top MTR is not too high, it's fairly normal to have 50% top MTRs.

It's just that it kicks in so early, at 33,800.

So what we need are more bands and rates to make the system smoother.

I propose 20% - 30% - 40% - 50%.

Let the 50% start at 100k, not 33,800.


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## Brendan Burgess

Hi gnf

You raise a very valid general point "Who speaks for the workers?"

First an overview of the tax position in Ireland

Low paid employees pay virtually no taxes on their income 

Middle earners who are married with kids pay extremely low taxes compared with other countries 

Middle earners who are single and who don't have kids pay about average taxes compared with other countries 

Higher paid employees pay about average taxes compared with other countries
All of the above refer to the proportion of their income that they spend in taxes.

We have very low levels of CAT and CGT.  The rate is high at 33%, but people can greatly reduce the effective rate  through reliefs.

But the big problem is the generosity of our social welfare system.  Someone who chooses never to work will get the same Old Age Pension as someone who has paid into the social welfare system all their life.

A person who has worked for thirty years, who loses their job, gets effectively the same Jobseekers as someone who has never worked a day in their life.

We also penalise people who try to provide for themselves. If you take out health insurance, you will be charged for a bed in a public hospital.   If you save hard to buy a new house, you will pay VAT at 13.5% and you will fund a social housing levy for those who rely on the state for housing. If you pay your car insurance, you will pay a levy  to fund the claims for those who don't bother to pay their car insurance.

Your insurance and costs generally are hugely inflated by the costs of personal injuries claims in Ireland which are much higher than in the UK.

Unless you have a cheap tracker, you are paying twice the mortgage rate than you would be paying in any other EU country.

The government has borrowed about €35 billion net to pay the wealthy depositors who should have lost the money they had on deposit in Irish Nationwide and Anglo Irish Bank. Workers will be paying for this for years to come.



And we continue to spend on ridiculous projects - High speed broadband for every house in the country so that they can watch Netflix, an underground from the City Centre to the airport despite the fact that the bus journey takes 20 minutes.  We have about 40 major hospitals in the country when we should have around 10.


*But the bad news is that it's going to get worse 
*
We are living in a golden period which can't continue. Corporation Tax rates are artificially high. Exports are booming. The government is paying virtually nothing for its borrowing.  This is the time when we should be generating tax surpluses to pay down our national debt, but in fact, we are borrowing to run the country.

When interest rates rise; when Corporation Tax receipts fall; when the next economic shock due to Brexit, Trumpenomics, Korea or whatever happens, we will be in deep, deep trouble.

*But not one of our political parties or TDs will shout stop. 
*
Brendan


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## Firefly

Brendan Burgess said:


> But the big problem is the generosity of our social welfare system.
> Brendan



Whilst I agree I think it's only part of the problem. The headline tax rates may seem ok however it's all the add on charges that are the killer. Car tax rates, TV license, School books, 23% VAT on purchases. Ask any parent and the phrase "there's something every month" comes to mind. I said this here a few years ago that the way things are going, people with good jobs will start the leave Ireland and it's starting to happen. One of my best friends is a GP and I was at the dentist last night and both said that younger doctors / dentists are emigrating. Years ago people emigrated if they found themselves out of work, now people are emigrating for a better life - higher wages, lower cost of living and being able to buy their own home. 

Of course, the fact that we have borrowed over 100bn (not including the bank bailout) since 2008 means we are in effect snookered.


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## gnf_ireland

Protocol said:


> Nobody in Ireland pays 49.5% effective tax rate.
> 
> But many people face a 50% marginal tax rate.


Apologies, this was taken from 2016 and the USC has dropped by 0.5% since that, so its 49%
 - 40% marginal income tax
 - 4% PRSI
 - 5% USC



Protocol said:


> It's MTR that are crazy high for ordinary workers in Ireland, not ATRs.


Fully accept this statement.



Protocol said:


> They are *undertaxed *compared to other countries, and compared to the benefits they get.


I think the key here (in my personal view) is compared to the benefits they get. There are those who are net contributors to the system and those who are net receivers from the system. I believe there are too many net receivers for the amount of contributors

I guess my question is who is speaking on behalf of the contributors, and I know in theory it is meant to be Fine Gael, but not in practice


Protocol said:


> FG is meant to be speaking on their behalf.






Protocol said:


> The 50% approx top MTR is not too high, it's fairly normal to have 50% top MTRs.
> It's just that it kicks in so early, at 33,800.


Absolutely. The average annual salary is around 38k to my knowledge. There is no way someone on an average salary should be paying the highest rate of tax (excluding USC).
There should always be an incentive to work and earn more money, especially at the lower income levels.


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## gnf_ireland

@Brendan Burgess  thanks - you articulated this much better than my original attempt last night

I am guessing the question still exists - who speaks on behalf of the workers. I am guessing I already know the answer - no one, as it would not be a populist position to take

Whatever about all of the items you list above, I look at the whole pension time bomb that no one appears to be willing to address at all and see this blowing up in the next 25 years - just before I am due to retire

The government appear to have no clue about the impact of robotics and automation and the impact this will have on jobs in the country. You just have to look at bank branches where the move to automation is pretty evident. Same if you check in luggage with Aer Lingus - you don't need to speak to an individual to do it. This is only starting, so can only imagine what it will be like in 10-15 years


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## Brendan Burgess

gnf_ireland said:


> The average annual salary is around 38k to my knowledge. There is no way someone on an average salary should be paying the highest rate of tax (excluding USC).



Hi gnf

If you were earning €38k , which of the following would you prefer?

1) A flat rate of 30% tax on all your income with no tax-free allowance.
or
2) A tax free allowance of €35k on which you pay no tax and a marginal rate of 50% on all income above €35k?



Brendan


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## gnf_ireland

Firefly said:


> Years ago people emigrated if they found themselves out of work, now people are emigrating for a better life - higher wages, lower cost of living and being able to buy their own home.



I agree with this in the 1980's in particular. I graduated in the late 1990's and a good block of my compatriots emigrated for adventure and life experience, and many stayed away due to love and other reasons. Many just loved the lifestyle abroad, although some are starting to drift home now as their parents get older. I think this was also driven by the rise of MNC's and the 'assignment' of some of their employees aboard.

I was abroad myself for the majority of the Celtic Tiger years only returning in 2006. Thankfully I had the good sense to hold off on buying property until 2011, but I really do not understand how people can afford to get on the property ladder now even on good jobs. 

If a couple on 150-200k cannot afford to live in a decent neighbourhood, send their kids to creche, go on a holiday a year and generally live while saving for the future/pension, then we have serious problems in my view. I see a lot of people who are making decent money 'struggle' due to the cost of living here, and the general quality of life suffers accordingly



Firefly said:


> Of course, the fact that we have borrowed over 100bn (not including the bank bailout) since 2008 means we are in effect snookered.


And this is a whole different discussion....


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## gnf_ireland

Brendan Burgess said:


> If you were earning €38k , which of the following would you prefer?


Obviously Brendan, the tax system that best suits me
But, if the 30% tax meant my social welfare was linked to my salary for the first 12 months, and the cost of living could be reduced so I was not paying additional charges such as 23% VAT etc, then I may consider it

Ask someone the same question if they are earning 150k, and they will give the same "whats best for me" answer..


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## Firefly

Protocol said:


> The 50% approx top MTR is not too high, it's fairly normal to have 50% top MTRs.
> 
> It's just that it kicks in so early, at 33,800.
> 
> So what we need are more bands and rates to make the system smoother.
> 
> I propose 20% - 30% - 40% - 50%.
> 
> Let the 50% start at 100k, not 33,800.



I agree. There are plenty people working part-time up to the max they can earn at 20% as after that it doesn't make any sense - for example (usually) mothers who work part-time whilst the kids are at school. Once they hit circa 25k it makes no sense to keep working for 1/2 their income to be taken in taxes, especially if additional child care is required which will negate the income.


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## Firefly

gnf_ireland said:


> And this is a whole different discussion....



As is this 



gnf_ireland said:


> The government appear to have no clue about the impact of robotics and automation and the impact this will have on jobs in the country. You just have to look at bank branches where the move to automation is pretty evident. Same if you check in luggage with Aer Lingus - you don't need to speak to an individual to do it. This is only starting, so can only imagine what it will be like in 10-15 years


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## galway_blow_in

Protocol said:


> My parents earn 49k approx, and pay under 10% direct taxes.
> 
> They get:
> 
> two medical cards
> two free travel passes
> free TV licence
> 35pm / 420 pa offf their elec bill
> 
> They are *undertaxed *compared to other countries, and compared to the benefits they get.



the likes of willie o dea wants to shower even more benefits on pensioners , the new minister for social protection ( regina doherty ) wasnt an actual week in her new job when she stated her biggest priority would be raising the state pension to 300 euro per week , no politician ever lost a single vote by promising to spoil pensioners and whats more , most people of all age groups appear to support it even it means they get hit

amazing how many people dont realise just how well off the elderly are in ireland


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## willyfones

Only Public Sector Unions speak for this group,,,   the decline of unions in the private sector have lead to wages remaining static while those at the top have seen their wages balloon to obscene levels.. 

My opinion of unions (and I am not part of any myself) has changed over the last few years,,  I just noticed they have been often demonised in the media and partly their own fault for contributing to a public Sector worker vs Private Sector divide.. 

However, they do look out for their workers and speak out on their behalf..    

A wider issue is of course that in this country,  everyone has their cap in hand pre budget,,    The government doesn't get any real kudos or votes for investing our money where it maters most (in water infrastructure, building social housing, etc) 

The Irish electorate does love a hand out though...   State pension,,  child benefit,,  etc etc...    simple tools that governments use to raise (using tax payers money of course) each budget,,  with the farce each year,, and political kite flyer leading up to the budget... 

We vote this shower in,, so only have ourselves to blame.


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## cremeegg

Brendan Burgess said:


> You raise a very valid general point "Who speaks for the workers?"



Brendan, your post at no. 9 is superb. With a little work it could be supplied to politicians, as a basis for someone who might be willing to "speak for the workers"

There are some aspects that need work. You say that each of the 4 categories you identify pay low or average taxes, then go on to say that the problem is social welfare is too high. I don't think that anyone would object to high social welfare if it could be funded with low taxes. A little more detail needed there.

The next point I would question is the 'ridiculous' projects. We have a habit in this country of underfunding infrastructure. Without a proper cost benefit analysis I would not be dismissing too many of these projects. I am not familiar with the Dublin transport issue, but high speed rural broadband seems an excellent idea to me. It would mean that parts of the country which are today almost cut off from the modern economy could become realistic locations for many types of employment. No manufacturing MNC is ever likely to set up in Longford, but many services business could locate anywhere with adequate broadband. Someone recently went about setting up an asset management business on Inish Mean.

I would be delighted to email my TDs before the budget on the basis of a revised version of your post.


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## gnf_ireland

willyfones said:


> We vote this shower in,, so only have ourselves to blame.


What is the alternative ?

As a higher earner, I would forgo 3-5 years of 'hand outs', to fund a proper investment plan in infrastructure, housing etc. I would also support initiatives that encouraged fiscal responsibility at a personal and government level, including encouraging people to save etc up to a reasonable point.

What I struggle with is the populist positions the political parties take around increasing 'hand outs' for votes .... 

I definitely do not agree that someone who is over 70 should pay less tax on the same income as someone in their 30's, and get more benefits as well. Surely someone in their 30's have higher costs of living than someone in their 70's, but should be taxed the same.


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## dub_nerd

dub_nerd said:


> I don't understand the arithmetic here. 6,400/month x 12 = 76.8k which is 70% of 2 x 55k. Where does the 49.5% tax figure come from? -- it looks like only 30%.





gnf_ireland said:


> Apologies, I should have said marginal tax rate of 49.5% - I was quoting too quickly from the Institute of Taxation's summary findings.
> 
> I am guessing from your comment, you believe 30% is an acceptable amount of tax to pay in general on this sort of salary. I probably would agree with you on this



The issue, as other people have said, is not what absolute tax you pay but a) what you get in return for it, and b) how the tax burden is shared among all tax payers. In my opinion the tax base is way too narrow with high tax payers paying way too much a share of the total income tax take. But then the overall tax take seems high too, so we seem to be getting incredibly bad value for the money we spend.




gnf_ireland said:


> If a couple earning 110k is not middle by any count, can you help me in understanding who is able to purchase houses in Dublin in this climate? The average cost of a 3 bed semi is 400k odd, and assuming a 10% deposit and 3.5 times Loan to Income, they barely make the cut. Surely a couple who purchase an average sized house in Dublin are middle in some regard ???



It's no secret that the demand for housing is much higher than the available supply. In that scenario you get price rationing so no, those who can afford new housing are the comparatively rich. If you want to find the "middle" when it comes to housing you have to include not just all those who buy houses but also those who want to and can't.


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## gnf_ireland

cremeegg said:


> but high speed rural broadband seems an excellent idea to me. It would mean that parts of the country which are today almost cut off from the modern economy could become realistic locations for many types of employment. No manufacturing MNC is ever likely to set up in Longford, but many services business could locate anywhere with adequate broadband.



I agree with this to a degree. I believe every 'population centre' should have access to reasonable speed broadband. Lets define a population centre as 500 people living in a village. This would cover a reasonable percentage of villages within the country.

This would enable most villages in Ireland support a level of service businesses, and potentially breath some life back into rural Ireland


But this is a very different proposition to every house in Ireland being able to support high speed broadband. The cost of rolling out high speed broadband to every premises in Ireland is massive, especially when you look at the amount of one off housing in rural Ireland. Where my parents live in East Galway (for example), there are 6 houses in a 2km stretch to the one village (would not make the 500 cut) and 11 houses in a 3km stretch on the other side which would make the 500 person cut. This is a 5km stretch of road, with 17 houses on it, some back off the road down by roads. The cost of rolling out and maintaining fibre to these houses must be massive, and the take-up might be 25% if they are lucky.

If this is to be done, then there should be an increase in the levys associated with one off housing to support the rollout of services such as fibre to them, or an increase in the property tax to support these services in rural areas. Urban housing costs a premium because of the services available to them, as this is paid when buying the house, the associated stamp duty and ongoing in property tax.

I am all for supporting industry in rural Ireland (coming from there myself), but it has to be viable. If I have to travel 5km down the road to get to an office pod to support a business venture, then that is not a long commute in rural Ireland. You see a few of these popping up in Dublin now, so surely they can pop up elsewhere in Ireland. I accept some people want the flexibility to work from home and set up a business from there, but its not always possible. Maybe those people can pay to have fibre broadband installed from their local population centre, supported by a grant from the local Enterprise Office or similar?


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## gnf_ireland

dub_nerd said:


> If you want to find the "middle" when it comes to housing you have to include not just all those who buy houses but also those who want to and can't.


Surely everyone wants to buy a house, even if they have no income at all 

If you take 2013 or 2014 prices, someone on 55k would still struggle to purchase a 3 bed semi in Dublin

I do understand what you are saying and I do agree that a couple on 110k should not be the 'squeezed middle' - but they are squeezed and many are struggling to get 'established' in this country, especially in Dublin. They also pay relatively high taxes for the benefits they receive... 
And I fully accept an individual earning 110k is taxed much heavier, but the reality is also they are earning double


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## Brendan Burgess

gnf_ireland said:


> I believe every 'population centre' should have access to reasonable speed broadband. Lets define a population centre as 500 people living in a village. This would cover a reasonable percentage of villages within the country.





Absolutely no problem with that.  And if anyone wants high speed broadband at the top of a mountain, let them pay for it themselves.

The only issue would be to what degree should I subsidise the broadband for these villages?  

Brendan


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## gnf_ireland

Brendan Burgess said:


> The only issue would be to what degree should I subsidise the broadband for these villages?



A coordinated investment plan for infrastructure is needed for Ireland for the next 5-10 years. This should take into account both urban and rural needs. We cannot have a full population migration to the cities - they cannot handle the volume as it is, so we need to invest in small urban centres. How small we go, will depend on the funding that is available

The subsidy you pay should be the same as the subsidy a rural person would pay for the LUAS cross city or Metro North projects, or the M20 motorway connection between Cork & Limerick. We all have to pay for projects we will never personally benefit from (but they need to be somewhat viable)


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## Firefly

gnf_ireland said:


> *But the bad news is that it's going to get worse
> *
> We are living in a golden period which can't continue. Corporation Tax rates are artificially high. Exports are booming. The government is paying virtually nothing for its borrowing.  This is the time when we should be generating tax surpluses to pay down our national debt, but in fact, we are borrowing to run the country.



I fully agree with this. We have been spending far more than we have earned and now we have no wiggle room or funds to pay for desperately needed infrastructure such as social housing. We're much happier to vote for and strike for wage increases. Madness..


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## T McGibney

Brendan Burgess said:


> And if anyone wants high speed broadband at the top of a mountain, let them pay for it themselves.



The paradox here is that practically every major mountain top in Ireland has broadband and phone network coverage. It's the villages in the valleys between them, from where the mountains block out the signals, that don't.

A further paradox is that it's usually arbitrary and often illogical planning rules that block the provision of cheap broadband to such areas.

My own locality suffered poor phone and non-existent broadband coverage for years because a few malcontents objected almost 20 years ago to the siting of a mast on a hill that was being simultaneously being damaged by quarrying. (Nobody ever objected to the quarrying.)

We finally got our broadband a few years ago on a State-subsidised scheme. No subsidy would have been necessary had common sense prevailed in the first instance.


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## Leo

gnf_ireland said:


> The government appear to have no clue about the impact of robotics and automation and the impact this will have on jobs in the country. You just have to look at bank branches where the move to automation is pretty evident.



The roll out of ATMs and automation in the US has led to an increase in the number of tellers employed there. Same happened in the 18th century as the textile industry embraced automation, the number of weavers actually grew as prices plummeted and demand soared.


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## PMU

Protocol said:


> My parents earn 49k approx, and pay under 10% direct taxes.
> They are *undertaxed *compared to other countries, and compared to the benefits they get.


No they aren't.  They are liable to income tax the same as everybody else and pay income tax at the same rates as everybody else. So you cannot say they are undertaxed. If they are, everybody with similar earnings is also undertaxed.  There is no special tax regime. However, over 65s do get (a) a tax exemption of threshold of 18,000 pp and an age tax credit of 256 pp. The tax exemption threshold and associated marginal relief only benefit those on very low incomes, i.e. to 18,000 pa, so basically your parents get an age tax credit of 256 pp that others don't. It difficult to see how this can be regarded as contributing to undertaxation.


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## T McGibney

PMU said:


> No they aren't.  They are liable to income tax the same as everybody else and pay income tax at the same rates as everybody else. So you cannot say they are undertaxed.



He said they were undertaxed compared to other countries.


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## PGF2016

gnf_ireland said:


> If a couple earning 110k is not middle by any count, can you help me in understanding who is able to purchase houses in Dublin in this climate? The average cost of a 3 bed semi is 400k odd, and assuming a 10% deposit and 3.5 times Loan to Income, they barely make the cut.



If they barely make the cut they are not trying hard enough. It will take time to save for a deposit but the couple in the scenario you present should easily be able to 'make the cut'. 




gnf_ireland said:


> If a couple on 150-200k cannot afford to live in a decent neighbourhood, send their kids to creche, go on a holiday a year and generally live while saving for the future/pension, then we have serious problems in my view.


Who is on 150-200k and cannot afford the items you mention? What are they doing with their money? That is easily possible.


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## Firefly

PGF2016 said:


> If they barely make the cut they are not trying hard enough. It will take time to save for a deposit but the couple in the scenario you present should easily be able to 'make the cut'.



If the couple in question do not have any children (and associated costs!) on a joint income they should take home just under 6,500 a month according to the Deloitte income tax calculator. Let's say for argument's sake they are renting an apartment costing 1,800 per month (which is quite high I would imagine). This leaves them 4,700 per month which is AMPLE to save for a deposit. Saving 2k per month should be easily attainable.


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## cremeegg

While I barely know Dublin, this thing of people on good wages unable to buy houses seems like nonsense to me.

Daft has 435 houses for sale with 3 or more bedrooms at the moment for less than €300,000 There is a house offered in Seskin Road in Tallaght for €290k that would go for more than that in Cork. And its closer to the city centre than Dalkey.

All this talk of unaffordable homes in Dublin is just middle class kids who cannot afford to buy in the affluent areas where they grew up. Too proud to live in Tallaght, too poor to buy in Mount Merrion.


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## odyssey06

cremeegg said:


> While I barely know Dublin, this thing of people on good wages unable to buy houses seems like nonsense to me. Daft has 435 houses for sale with 3 or more bedrooms at the moment for less than €300,000 There is a house offered in Seskin Road in Tallaght for €290k that would go for more than that in Cork. And its closer to the city centre than Dalkey.



(1) 435 houses... in a city of 1+ million? 
(2) And how many of them are in desperate need of fixing up?
(3) And how many of them will go for more than the asking price?

If you think all this talk is just middle class kids, try to buy a home in Dublin, then come back to me.


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## gnf_ireland

cremeegg said:


> While I barely know Dublin, this thing of people on good wages unable to buy houses seems like nonsense to me.
> ....
> All this talk of unaffordable homes in Dublin is just middle class kids who cannot afford to buy in the affluent areas where they grew up. Too proud to live in Tallaght, too poor to buy in Mount Merrion.



Are you saying a couple earning 150k a year with two kids in creche should not be able to afford a more affluent area? If it is not a couple earning 150k, who should be able to afford it? How many couples in Ireland earn 250k or above? 

So if it takes 150k to purchase in one of the lesser affluent areas, where can those earning 75k purchase? Are you proposing they move to Longford and commute up each day?

Leaving the 'premium' areas to one side for the moment, what salary would you expect someone to earn to live in the likes of Mount Merrion, Rathfarnham etc? Surely a professional working couple with 2 kids should be able to afford an area like this?

Back in our parents time, a single income could support the purchase of a house and the likes of Mount Merrion was the area of choice for senior civil servants - I am wondering how many could afford to live there now?


----------



## gnf_ireland

Firefly said:


> Let's say for argument's sake they are renting an apartment costing 1,800 per month (which is quite high I would imagine). This leaves them 4,700 per month which is AMPLE to save for a deposit. Saving 2k per month should be easily attainable.


And lets say they have two kids in creche - that 2k is easily gone on creche fees. Our old creche has just increased its fees to 1200/month from September 1st... 


Out of curiosity, how long should people be expected to save for a house on average? Is it 2 years hard saving, 4 years hard saving, 10 years hard saving... what rule of thumb would be used on average historically to save the deposit for a house?


----------



## PMU

T McGibney said:


> He said they were undertaxed compared to other countries.


Then everybody or at least all couples earning 49k are undertaxed. OK they have a 256 pp age credit, but otherwise everybody pays income tax on the same basis  as everybody else. So if you believe Protocol's parents are undertaxed, everybody at this level of income is undertaxed. The 'other countries' bit is spurious; we live in Ireland, not in 'other countries'.


----------



## cremeegg

odyssey06 said:


> If you think all this talk is just middle class kids, try to buy a home in Dublin, then come back to me.



This looks like it would make a very nice home and should be affordable to a couple on €75 k between them. Loan repayments €1,300 per month based on a 10% deposit.

http://www.daft.ie/dublin/houses-for-sale/tallaght/113-seskin-view-road-tallaght-dublin-1518250/


----------



## Purple

gnf_ireland said:


> I guess my question is who is speaking on behalf of the contributors, and I know in theory it is meant to be Fine Gael, but not in practice


Only the top 30% of earners (on average) are net contributors. 
The "Squeezed Middle" are net recipients when things like child benefit, the cost to the State of providing education to their children etc are taken into account. 
The top 5% of earners pay half of all the income tax (and have about 30% of the income). They are paying for everything. Are these the people who should have someone speaking for them?
People are struggling because the State is doing such a bad job when it comes to providing services, planning infrastructure and generally bribing people with their own money instead of acting in the medium to long term interests of the people. 
We have a very bad value for money health service, a populist and damaging welfare system, sprawling cities which makes the provision of public transport very expensive and inefficient and because of the high wages and inefficiency of the State sector levies on building are very high (someone has to pay for it).

Basically we are getting bad value for money from the taxes we pay. That results in lots of knock-on costs. 

We have the wrong discussion; it should be about value for money and efficiency, not increasing taxes and spending.


----------



## Purple

gnf_ireland said:


> Back in our parents time, a single income could support the purchase of a house and the likes of Mount Merrion was the area of choice for senior civil servants - I am wondering how many could afford to live there now?


The population has increased by nearly 50% since 1980. 
I grew up in Rathfarnham. Very few of the people I went to school with can afford to live where they grew up. The reason for that is that their parents are living too long. The area is full of old couples living in family homes. Other than forced euthanasia I don't see how we fix that problem.  
We talk about needing to increase incomes to enable people to afford to buy houses. We don't talk about the why construction costs are so high here, and I don't mean taxes and levies. This is interesting in that context.


----------



## Firefly

gnf_ireland said:


> And lets say they have two kids in creche - that 2k is easily gone on creche fees. Our old creche has just increased its fees to 1200/month from September 1st...



Yeah, creche fees are very high in this country for sure. Having children and trying to save for a house must be very difficult. We decided to save for a house, get married, buy a house and then try for a family in that order so it was easier that way. 




gnf_ireland said:


> Out of curiosity, how long should people be expected to save for a house on average? Is it 2 years hard saving, 4 years hard saving, 10 years hard saving... what rule of thumb would be used on average historically to save the deposit for a house?



Depends on the disposable income, individual circumstances and they type of house and location I suppose. We saved for 2 years for our first place but that was only a humble 1 bed apartment. Another 2 years with the equity from the apartment and we were able to trade up to a house.


----------



## T McGibney

PMU said:


> Then everybody or at least all couples earning 49k are undertaxed. OK they have a 256 pp age credit, but otherwise everybody pays income tax on the same basis  as everybody else. So if you believe Protocol's parents are undertaxed, everybody at this level of income is undertaxed. The 'other countries' bit is spurious; we live in Ireland, not in 'other countries'.


Take it up with him. I'm only telling you what he said and I suspect you misread.


----------



## PGF2016

gnf_ireland said:


> Out of curiosity, how long should people be expected to save for a house on average? Is it 2 years hard saving, 4 years hard saving, 10 years hard saving... what rule of thumb would be used on average historically to save the deposit for a house?



Depends on the house. I would say 2 years minimum. Of course that's an opinion not a fact.


----------



## Leo

cremeegg said:


> This looks like it would make a very nice home and should be affordable to a couple on €75 k between them. Loan repayments €1,300 per month based on a 10% deposit.



So long as they're happy their kids will be educated in schools that mean they have a significantly lower chance of progressing on to 3rd level than their neighbours in D14, D16, D18, etc. and deal with the ongoing anti-social behaviour in the area.


----------



## PMU

Purple said:


> I grew up in Rathfarnham. Very few of the people I went to school with can afford to live where they grew up. The reason for that is that their parents are living too long. The area is full of old couples living in family homes.


No. It's because the people with whom you went to school are not earning enough money to buy, or to finance a mortgage to buy, a property in Rathfarnham. It doesn't make a difference if the properties are empty, full of old codgers or of people from outer space. If you can't afford to buy it, you can't have it. And life does not owe your old school chums a property in Rathfarnham or anywhere else.  (I presume you were being sarcastic with the comment on euthanasia.)



Purple said:


> We talk about needing to increase incomes to enable people to afford to buy houses.


  No, we don't. This is because in the real world we pay people for the marketable goods and services they produce, not to finance their spending desires.


----------



## Firefly

PMU said:


> No. It's because the people with whom you went to school are not earning enough money to buy, or to finance a mortgage to buy, a property in Rathfarnham. It doesn't make a difference if the properties are empty, full of old codgers or of people from outer space. If you can't afford to buy it, you can't have it. And life does not owe your old school chums a property in Rathfarnham or anywhere else.  (I presume you were being sarcastic with the comment on euthanasia.)
> 
> No, we don't. This is because in the real world we pay people for the marketable goods and services they produce, not to finance their spending desires.



Yeah Purple, no one owes you a living buddy


----------



## Purple

PMU said:


> No. It's because the people with whom you went to school are not earning enough money to buy, or to finance a mortgage to buy, a property in Rathfarnham. It doesn't make a difference if the properties are empty, full of old codgers or of people from outer space. If you can't afford to buy it, you can't have it.


 You do understand supply and demand, yes? The reason there is more demand is because there are more people. That is not because of people from outer space but rather because the population has increased. People who earn the same of more than their parents did can't buy in the areas they grew up in because their parents generation and their grandparents generation are still alive. The same goes for many areas of Dublin and elsewhere.



PMU said:


> And life does not owe your old school chums a property in Rathfarnham or anywhere else.


I agree. What's your point?



PMU said:


> No, we don't. This is because in the real world we pay people for the marketable goods and services they produce, not to finance their spending desires.


 We are talking about increasing incomes for rent and for houses. That's the problem. The rent allowance paid to welfare recipients are being increased even though that just pushes up prices; more money chasing the same stock of properties. The same goes for the Central Bank rules on mortgages. It's utter nonsense and ignore the reality of supply and demand.
We need to find a way to build cheaper houses. I have suggested that we have an EU tender to supply a billion or so worth of houses, maybe 4 or 5 designs, factory built in Germany or Holland or some other country which used 21st century building techniques. If we can take the Irish construction industry and Irish Trades people out of the equation we'll get superior quality cheaper units without the shoddy Irish standards.


----------



## Purple

Firefly said:


> Yeah Purple, no one owes you a living buddy


Lol. 
Someone's getting the wrong end of the stick.


----------



## cremeegg

gnf_ireland said:


> the likes of Mount Merrion was the area of choice for senior civil servants.





Leo said:


> So long as they're happy their kids will be educated in schools that mean they have a significantly lower chance of progressing on to 3rd level than their neighbours in D14, D16, D18, etc. and deal with the ongoing anti-social behaviour in the area.



You are just making my argument for me. Too posh to live in Tallaght, to poor to buy in Mount Merrion.

And its not just the spoiled children of the middle classes. Peter McVerry and his clients that are to be sympathised with because they are homeless, (and I do sympathise with anybody who is homeless) but it seems they cannot be housed out of Dublin, because they would be away from their families.


----------



## PMU

Purple said:


> People who earn the same of more than their parents did can't buy in the areas they grew up in because their parents generation and their grandparents generation are still alive.


Are houses in Rathfarnham expensive?   It's a big area but Daft.ie currently shows a semi-detached 3 bed 3 bath house on Prospect Meadows, Prospect Manor is on sale for 460,000. Daft.ie also shows a similar house on Prospect Drive to rent for 2,300 per month, I.e. the house is on sale on a P/E ratio of 16.6.  I wasn't able to find other equivalent examples where houses were for rent and on sale in the same estate, but I'd say this is fairly par for the course

Is this expensive?

Irish shares currently trade on a P/E ratio of 19.1, (http://www.starcapital.de/research/stockmarketvaluation), so the house is cheaper than Irish equities, and you get to live there, i.e. you save on renting.

The house is not expensive, relative to other assets. Its cheaper than equities, which what you would expect. I'd say it's fairly priced. If you can't afford it that's your problem but it's not excessively priced relative to other assets.  If you can't afford this house it's nothing to do with the parents/grandparents hogging the market.  It's to do with the implied earnings yield.


----------



## Brendan Burgess

Back to the main topic 

Who speaks for the tax paying workers? 

I will probably do a Pre Budget Submission based on my earlier post. 

It will be a personal submission, but maybe I will make it "on behalf of all taxpayers and workers" 

Brendan


----------



## gnf_ireland

@Brendan Burgess  would you consider including an ISA type facility in your submission? Even if it was capped at 6k or 12k for an adult per year, and 3k for a junior one, it might be a good idea to promote better financial behaviour. I would not suggest we should do a 25% bonus like the SSIA, but rather fund it out of after tax income, but let the funds grow in it tax free - even if a 5 year minimum term is included, although can last as long as you wish.

Obviously this would hit CGT, Exit Tax and DIRT, but might be better to give an allowance tax free given the taxes are so high for investments in general...


----------



## Brendan Burgess

Hi gnf

I had not planned to do so. 

But I might make a general submission and then list 20 ideas for improving the long term financial stability of the country.

Brendan


----------



## Early Riser

Brendan Burgess said:


> It will be a personal submission,* but maybe I will make it "on behalf of all taxpayers and workers"[*/QUOTE]
> 
> That is very magnanimous of you! Perhaps something along these lines :
> 
> _"The proletarians have nothing to lose but their chains. They have a world to win.
> Workingmen of all countries unite!” _


----------



## Purple

PMU said:


> If you can't afford this house it's nothing to do with the parents/grandparents hogging the market. It's to do with the implied earnings yield.


 Okay, so you don't understand supply and demand and I can afford it but this is a general discussion.

Back on topic; the phrase "The squeezed Middle" is, ironically, damaging to working people. It implies that it is the wealthy who are the problem, gaming the system to suit their own interests. The reality is that it is our very generous welfare system, our grossly inefficient State sector and our unsustainable State pensions liability which is sinking us.


----------



## cremeegg

Brendan Burgess said:


> Hi gnf
> 
> I had not planned to do so.
> 
> But I might make a general submission and then list 20 ideas for improving the long term financial stability of the country.
> 
> Brendan



It is much easier to get a political and media response around a single clear idea.


----------



## cremeegg

Brendan Burgess said:


> Someone who chooses never to work will get the same Old Age Pension as someone who has paid into the social welfare system all their life.
> 
> A person who has worked for thirty years, who loses their job, gets effectively the same Jobseekers as someone who has never worked a day in their life.
> 
> If you take out health insurance, you will be charged for a bed in a public hospital.
> 
> If you save hard to buy a new house, you will pay VAT at 13.5% and you will fund a social housing levy for those who rely on the state for housing.
> 
> If you pay your car insurance, you will pay a levy  to fund the claims for those who don't bother to pay their car insurance.



Any one of these points alone could ignite a public response.


----------



## Purple

cremeegg said:


> Any one of these points alone could ignite a public response.


All of those points have been raised in the media already by Brendan and others. They won't get traction because they do not suit our left wing media's agenda and unless something is written by Reuters, the London Times or the English Daily Telegraph it won't make it into the Indo.


----------



## Brendan Burgess

cremeegg said:


> It is much easier to get a political and media response around a single clear idea. Any one of these points alone could ignite a public response.





cremeegg said:


> Any one of these points alone could ignite a public response.





Purple said:


> All of those points have been raised in the media already by Brendan and others. They won't get traction because they do not suit our left wing media's agenda



I understand the point you are making, but the problem with a single idea is that people get bored listening to it.  The problems are complex and they need complex solutions.  Having said that, the media wants sound bites "Tax the rich to help the poor" 

Brendan


----------



## cremeegg

Purple said:


> All of those points have been raised in the media already by Brendan and others. They won't get traction because they do not suit our left wing media's agenda and unless something is written by Reuters, the London Times or the English Daily Telegraph it won't make it into the Indo.



Part of the reason this point of view gains less coverage in the media, is because the people making these points are less skilled in media presentation. They tend to think developing the argument is a substitute for a catchy headline.

With all due respect to Brendan,



Brendan Burgess said:


> a general submission and then list 20 ideas for improving the long term financial stability of the country.



is never going to make the front page.

Whereas, "My car insurance premiums are going up to pay for uninsured dodgers" might.


----------



## Purple

Brendan Burgess said:


> I understand the point you are making, but the problem with a single idea is that people get bored listening to it.  The problems are complex and they need complex solutions.  Having said that, the media wants sound bites "Tax the rich to help the poor"
> 
> Brendan


I agree. A free media is more important in protecting the interests of the citizen than democracy. In my opinion we are as badly let down by our media as we are by our government and State Sector.


----------



## TheBigShort

Brendan Burgess said:


> I understand the point you are making, but the problem with a single idea is that people get bored listening to it. The problems are complex and they need complex solutions. Having said that, the media wants sound bites "Tax the rich to help the poor"



Here is one today on Bloomberg relating to a discussion in the UK

https://www.bloomberg.com/news/arti...see-the-u-k-tear-itself-apart-cable-will-warn


----------



## Purple

TheBigShort said:


> Here is one today on Bloomberg relating to a discussion in the UK
> 
> https://www.bloomberg.com/news/arti...see-the-u-k-tear-itself-apart-cable-will-warn


We don't like that sort of thing here. We just want someone else to pay for everything. Property taxes, bin charges, water charges etc. are all forms of non-labour taxes which are not cyclical.
Personally I agree with him as because of the shift from returns on labour to returns on capital we need to shift the tax burden away from labour and onto capital. The problem is that capital is mobile so there is absolutely no point in Ireland doing this in isolation.


----------



## TheBigShort

Purple said:


> We just want someone else to pay for everything. Property taxes, bin charges, water charges



I disagree, I would imagine the compliance rate for payment of property and bin charges is relatively high.
Water charges were unique as it triggered a mass protest against further austerity. The public debate morphed into the pay for consumption v right to basic necessity v the calamity that was in setting up Irish Water. But inherent in those mass protests was a public fatigue with increasing unemployment, emigration, pay cuts, pay freezes, negative equity, increased taxes and charges.



Purple said:


> we need to shift the tax burden away from labour and onto capital.



I agree. 



Purple said:


> The problem is that capital is mobile so there is absolutely no point in Ireland doing this in isolation.



I agree. A rise in wages (not restricted to Ireland) is required. Central Banks and governments need to engineer the conditions that facilitates economic forces to increase the return on wages over the return on capital - without crashing the world economy of course!


----------



## Purple

TheBigShort said:


> I agree. A rise in wages (not restricted to Ireland) is required. Central Banks and governments need to engineer the conditions that facilitates economic forces to increase the return on wages over the return on capital - without crashing the world economy of course!


The big question is how that can be done.


----------



## PMU

Brendan Burgess said:


> Back to the main topic
> 
> Who speaks for the tax paying workers?
> 
> I will probably do a Pre Budget Submission based on my earlier post.
> 
> It will be a personal submission, but maybe I will make it "on behalf of all taxpayers and workers"
> 
> Brendan


Back to the main topic, I think you'll be laughed at.

gnf_ireland in post no 1 of this thread, highlighted the issue of the squeezed middle particularly as discussed in a document on 'Perspectives on Ireland’s personal tax system' from the Irish Tax Institute. However, these concerns are not officially addressed at a policy level in Ireland.

Issues on personal income tax levels in Ireland have already been identified and IMHO analysed and discussed more cogently than in this thread by e.g. the Revenue Commissioners, the Tax Strategy Group of the Department of Finance, etc. The government's own Income Tax Reform Plan http://www.finance.gov.ie/wp-content/uploads/2017/07/Income-Tax-Reform-Plan.pdf recognises that entry to income tax is at a high income level and that entry to the higher rate is at a relatively low level. Unfortunately the 'reform' part of the plan, which incidentally concludes that “_Ireland has a comparatively low tax burden on labour, particularly at low and middle income levels_”, is largely concerned with faffing about on the periphery with earned income credit; the home carers credit and extending mortgage interest relief, than delivering real tax reform.

The National Risk Assessment Strategy 2017 http://www.taoiseach.gov.ie/eng/Publications/Publications_2017/National%20Risk%20Assessment%202017%20-%20Overview%20of%20Strategic%20Risks.pdf says “In Ireland, taxation and social transfer policies have been effective in offsetting market income inequality. In 2015, transfers reduced the at-risk-of-poverty rate from 34.9% to 16.9%, representing a poverty reduction effect of 52%, and currently Ireland is the best performing EU Member State in this regard. Similarly, the ratio of total income received by the top income quintile compared to the bottom income quintile stood at 4.7 in 2015 down from 5.1 in 2012 at the height of the economic downturn. In recent years there has been some improvement in measures of poverty and inequality, with the Gini coefficient for disposable income falling below the EU average in 2015. However, measures of consistent poverty remain above the targets set for 2020.”  So there you have it. Taxation policy is, inter alia, to 'offset market income inequality'. So it was a bit of a waste of time to study, get that qualification, work hard and produce marketable goods and services, because somebody else, and not you and your family, will benefit from your hard work and effort, but you will at least know that you live is an less unequal society.   And that is why an Irish taxpayer on 55 grand pays more that in other wealthier countries, because it is public policy that he/she should do so.

Furthermore the Fiscal Advisory Council's pre-budget submission http://www.fiscalcouncil.ie/wp-content/uploads/2017/09/Pre-Budget-2018-Statement.pdf does not address the issue of personal taxation or the concerns of the Irish Tax Institute, presumably because they do not regard them as important or real, but notes that “there is more scope for government expenditure to expand in line with the economy’s sustainable pace of growth, while gradually reducing debt levels.”  So public policy would appear to be firmly set on increasing government expenditure, when it can get away with it, with issues concerning personal income tax payers not addressed in the FAC's report.

Additionally, the government's recent Economic Statement http://www.budget.gov.ie/Budgets/2018/Documents/SES/20170712-SES-final-version.pdf identifies 0.22 billion net for 'new taxation measures'. I think this means possible tax reductions, but the report goes on to say “Any additional expenditure measures and tax reduction proposals will require additional discretionary measures unless compensating expenditure reductions are identified. The forthcoming Tax Strategy Group papers will set out potential options for revenue increases and reductions.” http://www.finance.gov.ie/wp-content/uploads/2017/07/170712-Summer-Economic-Statement-2017.pdf. So it would appear that additional taxation has not been ruled out and tax reduction will come only  where expenditure cuts are identified. And this by a strategy group that concludes that Ireland has a low tax burden on labour.  This is not the same as saying for example, "we will, as a matter of policy, 'address the concerns of the squeezed middle' or change personal taxation in Ireland along the lines of the medium to long term approach proposed by the Irish Tax Institute".


----------



## Early Riser

PMU said:


> And that is why an Irish taxpayer on 55 grand pays* more that in other wealthier countries*, because it is public policy that he/she should do so.



Are there any comparison sites to give these figures ? I randomly chose Germany and ran the deductions on €55k for a single person on the website below and came up with total deductions of €19400 (I skipped the Church Tax!). This includes state health insurance. What is the figure for a single taxpayer in Ireland ? My rough estimate is for about €16000 (tax, PRSI, USC), but open to correction.

http://www.brutto-netto-rechner.info/gehalt/gross_net_calculator_germany.php


----------



## TheBigShort

PMU said:


> So there you have it. Taxation policy is, inter alia, to 'offset market income inequality'. So it was a bit of a waste of time to study, get that qualification, work hard and produce marketable goods and services, because somebody else, and not you and your family, will benefit from your hard work and effort, but you will at least know that you live is an less unequal society. And that is why an Irish taxpayer on 55 grand pays more that in other wealthier countries, because it is public policy that he/she should do so.



It would appear however that you haven't considered the reasons why public policy is geared toward offsetting market income inequality.


----------



## Firefly

PMU said:


> Furthermore the Fiscal Advisory Council's pre-budget submission http://www.fiscalcouncil.ie/wp-content/uploads/2017/09/Pre-Budget-2018-Statement.pdf does not address the issue of personal taxation or the concerns of the Irish Tax Institute, presumably because they do not regard them as important or real, but notes that “there is more scope for government expenditure to expand in line with the economy’s sustainable pace of growth, while gradually reducing debt levels.”  So public policy would appear to be firmly set on increasing government expenditure, when it can get away with it, with issues concerning personal income tax payers not addressed in the FAC's report.



Bananas. During the crash people were advocating that the government stimulate the economy by increasing spending. The economy has recovered and we're nearly breaking even and now it looks like there are more calls for additional spending. Looks pro-cyclical rather than counter-cyclical. So, if I am reading this correctly, when the economy is in the dumps we should increase government spending to boost the economy and when the economy is fine we should boost increase spending again as we have the funds?

Can anyone tell me when the government should not increase spending?

Is it any wonder our national debt is 200,000,000,00 ???


----------



## Brendan Burgess

PMU said:


> Back to the main topic, I think you'll be laughed at.



Hi PMU

That would never stop me.  I think a lot of people are afraid to speak out about the system because they will be laughed at or abused by the media or the poverty lobby. 

I have the submission drafted.  

I will try to get  the issues debated it the media over the coming weeks. 

Brendan


----------



## Brendan Burgess

Firefly said:


> f I am reading this correctly, when the economy is in the dumps we should increase government spending to boost the economy and when the economy is fine we should boost increase spending again as we have the funds?



Brilliant Firefly

I will be amending my pre-Budget submission accordingly. 

Brendan


----------



## cremeegg

Brendan Burgess said:


> I think a lot of people are afraid to speak out about the system because they will be laughed at or abused by the media or the poverty lobby.



I think that is true, and it would be a good thing to give them the tools to speak out. Not just on a forum like this which is sufficiently hidden away not to be exposed to being laughed at or abused.

Highlighting one irritating issue at a time, will be permitted by the media.


----------



## Early Riser

PMU said:


> Back to the main topic, I think you'll be laughed at.



When I first came across this thread I genuinely thought it was some sort of poker-faced joke or spoof. Was it meant to be some sort of parody script for the annual PD old-boys nostalgia night? But then I remembered that the first time I came across FOX News several years ago, I thought it was a joke also - and that didn't didn't turn out too funny in the end. Hopefully that is not an omen.

Some posters have referenced "populism" as what they are up against! Not much sense of irony. A considerable part of this thread has consisted of the easy populism of the "stop robbing us of our tax money because we are uniquely victimized variety". It has several times been alluded to that the media (the FAKE NEWS media?) are in on some sort of conspiracy to keep viewpoints of this nature suppressed. I have read these views being very articulately expressed many times and rightly so as they are valid points in social debate - so please spare me the poor excluded victim vibe running through here. Is that closet Trotskyite, Denis O'Brien, keeping these views out of his media empire? Where is Dan O'Brien writing these days? And the Bakunite Murdoch's Sunday Times ? Do I not read Cormac Lucey there? Or is it an imposter? Is Brian Carey a suspect? (Perhaps in the secret pay of the "poverty industry"?).



TheBigShort said:


> t would appear however that you haven't considered the reasons why public policy is geared toward offsetting market income inequality.



Precisely, TheBigShort. There has been plenty on "cutting my unfair taxes because I shouldn't have to subsidise things I can't use or benefit from" variety (balanced regional development, broadband in rural villages, "poverty", etc -add your own ad infinitum -why not schools if I don't have children?), but nothing about the vision of the alternative society envisaged (presuming all of the posters accept the idea or value of society?). Fortunately many economists of international renown seem to be taking a much broader view of late and reckon that the winner takes all approach has poorer societal outcomes across the board, eg,

https://hbr.org/2016/01/income-inequality-makes-whole-countries-less-happy

https://www.citylab.com/equity/2015/12/income-inequality-makes-people-unhappy/416268/



Purple said:


> We have the wrong discussion; it should be about value for money and efficiency, not increasing taxes and spending.



Purple, In fairness you did try to steer things away from a WhineFest - but it didn't last long, did it?

Finally, in case all of the FAKE NEWS MEDIA decline to publish the article, could I suggest you try Waterford Whispers?

http://waterfordwhispersnews.com/


----------



## PMU

Early Riser said:


> Are there any comparison sites to give these figures ?


The figure of 55 grand comes from page 5 of the Irish Taxation Institute's document quoted by gnf_ireland in post no 1 of this thread. “At a salary level of €55,000, an Irish taxpayer pays more tax than in Sweden, Spain, Switzerland and the US. They pay over €800 more than a taxpayer in the UK.” https://taxinstitute.ie/Portals/0/The%20Budget%20Book%202017%20-%20Final%2016%20Sept.pdf.



TheBigShort said:


> It would appear however that you haven't considered the reasons why public policy is geared toward offsetting market income inequality.


This is a big debate. But there is all the difference in the world between having a welfare state that looks after society's unfortunates, which I and every other reasonable person supports and insists on, and policy that sets out to negate explicitly the benefits and distributions of a market economy.



Firefly said:


> Bananas.


 I presume this comment is directed at the Fiscal Advisory Council , and not me?



Brendan Burgess said:


> That would never stop me.


The point I was making is that for acceptance, any submission must make sense within the current policy formation framework, e.g. the various official documents I quoted in my previous post. If a submission is regarded as a whinge document it will be dismissed. Your post  no 9 is well argued as is the Taxation Institute's document.

However, for example, a possible criticism you might receive is “Well the government's Income Tax Strategy document concludes that _Ireland has a comparatively low tax burden on labour, particularly at low and middle income levels_”, so tax is low, so what's your problem? 

Now you know and I know and most contributors to this thread know this is because as you have correctly pointed out in post no 9 that this is because a large no of low paid workers do not pay income tax, so taxation is low. However, if you then get into a debate on technical taxation issues it's like a debate on evolution, everybody switches off.

I think the most important point in post 9 is that “We also penalise people who try to provide for themselves.” A whinge on tax will be dismissed, but rejigging post 9 as a submission on what sort of society penalises those who help themselves may well indeed prove fruitful. After all why should society penalise those who set out not to be a burden on that society.


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## Early Riser

PMU said:


> The figure of 55 grand comes from page 5 of the Irish Taxation Institute's document quoted by gnf_ireland in post no 1 of this thread. “At a salary level of €55,000, an Irish taxpayer pays more tax than in Sweden, Spain, Switzerland and the US.



Rights, thanks for that. And I am assuming that the comparison figures include social contributions? Also, does the US figure take account of State income tax rates or just federal rates? In New Jersey, for example, state income tax adds between 1.4% and 9% on a sliding scale.

So perhaps, you earlier post might more accurately have read :



PMU said:


> And that is why an Irish taxpayer on 55 grand pays more than in *SOME *other wealthier countries,


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## TheBigShort

PMU said:


> But there is all the difference in the world between having a welfare state that looks after society's unfortunates, which I and every other reasonable person supports and insists on, and policy that sets out to negate explicitly the benefits and distributions of a market economy.



True, but a policy geared to offsetting market income inequality via a welfare state that looks after those less fortunate in society, which you, I and every other reasonable person support, is a world away from a policy that sets out to negate explicitly the benefits and distributions of a market economy.


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## Sophrosyne

PMU has eloquently set down the difficulties faced by those who make pre-budget submissions.

All lot of submissions will not be given a second glance because the proposals they contain are ill-defined, uncosted and insufficiently researched.

It is particularly difficult even for bodies such as the Institute of Taxation to formulate tax policies in the absence of the kind of detailed national and international statistics available to governmental advisors such as the Tax Strategy Group.


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## Brendan Burgess

Sophrosyne said:


> PMU has eloquently set down the difficulties faced by those who make pre-budget submissions.



To be fair, I don't expect Paschal to take my submission as a check-list and start cutting social welfare immediately.

But if everyone sits back and lets the poverty lobby call for even more expenditure when we already have €200 bn of national debt, they can't complain when we the Troika comes back in.

I want to offer the alternative view that there is an open-ended cheque book. 

Brendan


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## Sophrosyne

Brendan Burgess said:


> But if everyone sits back and lets the poverty lobby call for even more expenditure when we already have €200 bn of national debt, they can't complain when we the Troika comes back in.
> 
> I want to offer the alternative view that there is an open-ended cheque book.



Making an alternative viewpoint known is fine Brendan. Like many posters, I don’t necessarily disagree with it.

I could shoot off a proposal myself but to be taken seriously, it would have to have credence; not just a
broad-spectrum personal stance.

Anything I say could be easily refuted by those who have information that I cannot access.

To be successful, I would need to stick to one or two points that I could prove beyond doubt.


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## TheBigShort

Brendan Burgess said:


> But if everyone sits back and lets *the poverty lobby* call for even more expenditure when we already have €200 bn of national debt, they can't complain when we the Troika comes back in.



It's this type of language, or rather thinking, that exposes the ineptness and redundancy of any proposals that may emanate from this site.
The notion that the 'squeezed middle' are somehow a consequence of some organized conspiracy of the poor is both bizarre and sad.
I would ask the poster to identify the 'poverty lobby' and specifically show how they have managed to squeeze the wealth of middle. And before answering, I would at least hope the poster would consider who actually controls the wealth in our society, and how perhaps those in control of it squandered it.


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## Early Riser

TheBigShort said:


> The notion that the 'squeezed middle' are somehow a consequence of some organized conspiracy of the poor is both bizarre and sad




Perhaps, a definition of the "squeezed middle" would be helpful too. Are they different from Leo's "people who get up early". This is an extract from Purple's excellent Post 20:



Purple said:


> The "Squeezed Middle" are net recipients when things like child benefit, the cost to the State of providing education to their children etc are taken into account.
> The top 5% of earners pay half of all the income tax (and have about 30% of the income). They are paying for everything.



Just to add - if groups who advocate for a certain section of society are to be pejoratively labelled "the poverty lobby" perhaps it would be helpful to have a lexicon for the various other lobbyists eg, the vultures lobby, the fat cats lobby, the scavengers lobby,the cooking the books lobby, the "I deserve it whingers lobby, the "I don't care about anyone else" lobby. We are all fairly adept at lumping other viewpoints into a selfish lobby but don't find it so easy to recognise ourselves.



Sophrosyne said:


> All lot of submissions will not be given a second glance because the proposals they contain are ill-defined, uncosted and insufficiently researched.



I suspect well argued and factually supported submissions would be considered if they showed that they recognised and took account of the complexities of social administration (as opposed to simply book balancing) and of social and political realities (as well as economic ones - that is economics in the narrowest old-fashioned sense). I suppose most are recognised for what they are - either "I want more" lists or "I want to pay less" lists, with selective "statistics" to add spurious support.


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## Firefly

PMU said:


> I presume this comment is directed at the Fiscal Advisory Council , and not me?



Hey PMU,

Not directed at you at all!

Firefly.


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## Purple

Given that we are not going to change the social structures we have in this country, and broadly speaking I don't think we should, and that we have very low levels of income taxes on middle income earners, what else can we do to make people feel less stretched?

I come back again to my point that we are discussing the services we provide and how much they cost whereas we should start by looking at how well and how efficiently we deliver those services.
Once we know that we are as lean and efficient as we possibly can be (and that will result in far fewer people being employed by the State) we should then look at whether we can afford to continue to deliver those services, but efficiency comes before cuts to pay and cuts to services.
That leads to the next question; how do we improve efficiency and who and what are the blocks to that improvement?
The first issue there is the competence of the management which means their understanding of the processes which go into the running of their organisation (has every State body got a process interaction map/flow-chart and do all management understand every aspect of that map?) and how to improve it.
The second issue is does the management have the respect of the people they are meant to be leading (issues of the legitimacy of authority come in here)? If you are in charge then everything is your fault; if something goes wrong you have made the wrong decision, hired the wrong people, failed to train your people properly, incorrectly allocated resources or failed to anticipate a problem. Do the people in charge accept that position? If not they need to be replaced.
The third issue is the vested interests within the State sector. That means Unions, industry lobby groups, local lobby groups etc. They either have to engage positively and productively or be shut out of the process completely.
Other countries have done this, New Zealand being the best example as they are similar in size and culture to us. We can and should do it. We just have to start by making it the main topic of public discourse.


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## Purple

Early Riser said:


> Just to add - if groups who advocate for a certain section of society are to be pejoratively labelled "the poverty lobby" perhaps it would be helpful to have a lexicon for the various other lobbyists eg, the vultures lobby, the fat cats lobby, the scavengers lobby,the cooking the books lobby, the "I deserve it whingers lobby, the "I don't care about anyone else" lobby. We are all fairly adept at lumping other viewpoints into a selfish lobby but don't find it so easy to recognise ourselves.


 Well said; emotive language is used by all sides, "Vulture Funds" being the most emotive of all.


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## Firefly

Purple said:


> Given that we are not going to change the social structures we have in this country, and broadly speaking I don't think we should, and that we have very low levels of income taxes on middle income earners, what else can we do to make people feel less stretched?


When tax rates and benefits (childrens allowance etc) are taken into account you're right, however for most people I would think it's the cost of living rather than the tax rates that are the issue. High rents / house purchases, obscene motor tax rates on cars > 2008, tv license, insurance, school books & "voluntary" contributions etc etc etc.




Purple said:


> I come back again to my point that we are discussing the services we provide and how much they cost whereas we should start by looking at how well and how efficiently we deliver those services.
> Once we know that we are as lean and efficient as we possibly can be (and that will result in far fewer people being employed by the State) we should then look at whether we can afford to continue to deliver those services, but efficiency comes before cuts to pay and cuts to services.
> That leads to the next question; how do we improve efficiency and who and what are the blocks to that improvement?



Good points and I agree, but considering the country nearly went over a cliff and these reforms / cost savings were not achieved, I have ZERO hope they ever will. With our national debt and pension crisis looming and our ever pro-cyclical demands on government spending I can just see the country slowly grinding to a halt (or suddenly if/when the ECB turns off the tap and our bond rates are traded at realistic levels) and the usual people blaming the usual causes. We have the world's multinationals here and are the envy of most EU countries as a result. We don't have the expense of a real army. We've received billions of grants over the last few decades from the EU. It's depressing and sad.....we should be the richest country in Europe by a country mile.


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## Brendan Burgess

Early Riser said:


> if groups who advocate for a certain section of society are to be pejoratively labelled "the poverty lobby"



Hi Early Riser 

I had not realised that was pejorative. Thanks for pointing it out.  I have edited my submission accordingly and it now reads "All the pre-Budget submissions you receive will be calling for increased expenditure." 



This was the original context: 

"But if everyone sits back and lets the poverty lobby call for even more expenditure when we already have €200 bn of national debt, they can't complain when we the Troika comes back in." 

Maybe the language was careless, but the point is valid. There is a massive lobby calling for further expenditure.  They are on all the TV and radio shows.  There is no counter lobby calling for expenditure cuts. 

Would the "higher expenditure lobby" be less pejorative? 

Or just "all the groups calling for increased expenditure" ? 

The original point is valid. 

Brendan


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## TheBigShort

Brendan Burgess said:


> Hi Early Riser
> 
> I had not realised that was pejorative. Thanks for pointing it out.  I have edited my submission accordingly and it now reads "All the pre-Budget submissions you receive will be calling for increased expenditure."
> 
> 
> 
> This was the original context:
> 
> "But if everyone sits back and lets the poverty lobby call for even more expenditure when we already have €200 bn of national debt, they can't complain when we the Troika comes back in."
> 
> Maybe the language was careless, but the point is valid. There is a massive lobby calling for further expenditure.  They are on all the TV and radio shows.  There is no counter lobby calling for expenditure cuts.
> 
> Would the "higher expenditure lobby" be less pejorative?
> 
> Or just "all the groups calling for increased expenditure" ?
> 
> The original point is valid.
> 
> Brendan



Perhaps I misconstrued your point. Rather than intending to target groups who advocate increased spending on the poor (St Vin de Paul, Simon Community, etc) your point was to suggest that any increased expenditure is unaffordable and as such is leading the country to dire times, inducing increased poverty - hence the term "the poverty lobby"?


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## cremeegg

Sophrosyne said:


> I could shoot off a proposal myself but to be taken seriously, it would have to have credence; not just a
> broad-spectrum personal stance.
> 
> Anything I say could be easily refuted by those who have information that I cannot access.



I really do not think that this describes how the country works or how change is achieved.

The most successful campaign on economic issues by far in recent years was the water charges campaign, it had no credence what so ever, yet it was hugely successful. Change is brought about by getting people emotionally involved, not by logical argument.

It's not fair. Any parent can tell you that this is the first and strongest argument any child makes. Its not fair that people who pay PRSI all their lives get the same pension as those who received social welfare all their lives.


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## Brendan Burgess

cremeegg said:


> Change is brought about by getting people emotionally involved, not by logical argument.



Hi cremegg

I can't disagree with any of that, but we have to start somewhere. 

I will start by making a pre-Budget submission. 

I will also try to get media coverage. 

I am more in the logical argument camp myself, but I would welcome you and anyone else to do the emotional stuff. 

Brendan


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## TheBigShort

Purple said:


> The second issue is does the management have the respect of the people they are meant to be leading (issues of the legitimacy of authority come in here)? If you are in charge then everything is your fault; if something goes wrong you have made the wrong decision, hired the wrong people, failed to train your people properly, incorrectly allocated resources or failed to anticipate a problem. Do the people in charge accept that position? If not they need to be replaced.



I understand the sentiment here but I do detect that the overall approach here is to transform public sector management to operate in similar vein, with similar targets and output measurements, as that which is applied in the private sector. Certainly there is a lot of commonality in the fundamental operations of any organisation, but there is very little similarity in measuring outputs.
For example, a private organisation can point to increased sales, revenues, market share etc. In the public sector, how do we define success? If the government was to increase the Garda numbers by 100% and crime was eliminated (including alleged criminality within the force), is that a price worth paying? Or having achieved a crimeless society, is that the time to start cutting expenditure on Garda number?
If there was zero crime, would we be wondering what we were paying all those Gardaí for? Or is it because we spend so much on Garda numbers and resources that crime was reduced to zero?




Purple said:


> The third issue is the vested interests within the State sector. That means Unions, industry lobby groups, local lobby groups etc. They either have to engage positively and productively or be shut out of the process completely.



In what way do unions not engage positively and productively? They are simply representing the views of their members, how is that not a positive and productive thing?



Purple said:


> Other countries have done this, New Zealand being the best example as they are similar in size and culture to us. We can and should do it. We just have to start by making it the main topic of public discourse.



New Zealand ranks somewhere around 30th richest country in the world compared to Ireland, consistently top 10. Inequality is on the rise, house prices are in a bubble, increasing numbers of the population are reliant on welfare, child poverty is increasing, suicide rates are increasing....It does of course have its good side, its Debt/GDP ratio is less than 40% - but we had something similar before it was decided to bailout out bankrupt banks. 
Thatcherite politics of sacking the entire civil service has not produced any panacea to resolving public service inefficiencies.


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## Brendan Burgess

TheBigShort said:


> your point was to suggest that any increased expenditure is unaffordable and as such is leading the country to dire times, inducing increased poverty - hence the term "the poverty lobby"?



My point is much more nuanced. I will post a copy of my Pre Budget submission when it's ready. Probably Sunday. 

1) There is too much spending on social welfare. This is bad for the recipients and bad for the taxpayer.
2) No one is prepared to argue this publicly. RTE and The Irish Times allocate all their space to the much nicer people who are calling for increased expenditure. Those of us who  believe in the future of the country must start shouting stop now. 



TheBigShort said:


> dire times, inducing increased poverty



Good point. I will amend my submission to point that out. The biggest losers from our unsustainable welfare system will be the recipients themselves when the money runs out.


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## Sophrosyne

cremeegg said:


> I really do not think that this describes how the country works or how change is achieved.
> 
> The most successful campaign on economic issues by far in recent years was the water charges campaign, it had no credence what so ever, yet it was hugely successful. Change is brought about by getting people emotionally involved, not by logical argument.



Agreed, but my post was in the context of the effectiveness of pre-budget submissions.


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## odyssey06

Brendan Burgess said:


> Good point. I will amend my submission to point that out. The biggest losers from our unsustainable welfare system will be the recipients themselves when the money runs out.



The lifeboat has to be smaller that the ship she sails with... or when one sinks so will the other.


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## Purple

TheBigShort said:


> I understand the sentiment here but I do detect that the overall approach here is to transform public sector management to operate in similar vein, with similar targets and output measurements, as that which is applied in the private sector. Certainly there is a lot of commonality in the fundamental operations of any organisation, but there is very little similarity in measuring outputs.


 No, the sentiment is about the peopel in charge actually being in charge, making decisions and taking responsibility. 



TheBigShort said:


> In what way do unions not engage positively and productively? They are simply representing the views of their members, how is that not a positive and productive thing?


 They represent the interests of their individuals at an individual level, i.e. within the existing structure. The problem is the existing structure. To improve the overall structure they need to take a big picture view and not concentrate on short term individual interests.


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## Firefly

TheBigShort said:


> New Zealand ranks somewhere around 30th richest country in the world compared to Ireland, consistently top 10. Inequality is on the rise, house prices are in a bubble, increasing numbers of the population are reliant on welfare, child poverty is increasing, suicide rates are increasing....It does of course have its good side, its Debt/GDP ratio is less than 40% - but we had something similar before it was decided to bailout out bankrupt banks.



Hold on there! The net amount used to bail out the banks is somewhere between 40 - 50bn. That's about 20-25% of our national debt. Easy on the revisionist stuff there fella.


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## Firefly

Brendan Burgess said:


> The biggest losers from our unsustainable welfare system will be the recipients themselves when the money runs out.



That's so true. People getting something for nothing have no incentive to skill up and be productive. When the money runs out and all the skilled people leave, they'll be sucking their thumbs..


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## TheBigShort

Firefly said:


> Hold on there! The net amount used to bail out the banks is somewhere between 40 - 50bn. That's about 20-25% of our national debt. Easy on the revisionist stuff there fella.



I don't get this point, sorry.


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## Firefly

TheBigShort said:


> I don't get this point, sorry.



You are saying that we had a national debt like that of NZ but choose to bail out the banks. We put 64bn into the banks of which about 20bn has been repaid. I think the net amount is somewhere around the 40-50bn mark. This represents about 20-25% of our national debt, which means about 75-80% of our national debt is our own doing. It's this amount that you should be comparing to the national debt of NZ rather than justifying the difference as down to what we used to bail out the banks..


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## TheBigShort

Firefly said:


> You are saying that we had a national debt like that of NZ but choose to bail out the banks. We put 64bn into the banks of which about 20bn has been repaid. I think the net amount is somewhere around the 40-50bn mark. This represents about 20-25% of our national debt, which means about 75-80% of our national debt is our own doing. It's this amount that you should be comparing to the national debt of NZ rather than justifying the difference as down to what we used to bail out the banks..



Yes, the property crash, the crash in public finances, unemployment rate shooting up etc...I wasn't intending on recycling the whole episode again. I merely referred to the bailouts as I consider them the most repugnant and wasteful of our spending. That's my opinion, I appreciate others have differing views, but I don't want to rehash that here.


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## TheBigShort

Purple said:


> No, the sentiment is about the peopel in charge actually being in charge, making decisions and taking responsibility.



Yes, but from that comment I gather you think that the people in charge don't make decisions or take responsibility? Care to give an example?



Purple said:


> They represent the interests of their individuals at an individual level, i.e. within the existing structure. The problem is the existing structure. To improve the overall structure they need to take a big picture view and not concentrate on short term individual interests.



I disagree. They act on individual level providing support to their members and also act on a collective basis. They also act internationally.
But for the sake of our sanity, let's not go there.


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## Brendan Burgess

Guys

There are many people interested in these issues - they switch off when you repeat the same thing over and over again. 

I have deleted a spat between TheBigShort and Firefly as it's meaningless to everyone else. 

And by the way, we do not speculate on people's identities, directly or by implication.  If you think that someone is posting under two names, then report them.


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## Purple

TheBigShort said:


> Yes, but from that comment I gather you think that the people in charge don't make decisions or take responsibility? Care to give an example?


I'm not getting into another circular argument with you
If you think that the State sector is well run and structurally efficient with good empowered and accountable management then good for you but I disagree.


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## Firefly

Purple said:


> I'm not getting into another circular argument with you


Well said.


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