Only three categories of people have experienced austerity in the past 5 years: 1) the poor, 2) the unemployed, 3) the public sector. Budget 2014 looks set to continue the trend what with decreases in Jobseeker’s Allowance for the young. You know: as an extra disincentive to being unable to find work. But the important thing is that the Range Rover set be allowed to carry on in the style to which they’ve become accustomed.
Btw, free care for children who mostly don’t need it..the IMO has it right?
“The choice of the adjustment figure for Budget 2014 has therefore been a difficult balancing act. The more important point is that the broader crisis-resolution strategy remains in place and is working. ”
The most obvious question that arises, and which has arisen for some considerable time, is who exactly is the adjustment ‘working’ for?
Unless you or your business are fortunate enough to be in a postion to duck and dive the last 6 budgets I simply don’t see how the adjustment “works”. In almost every respect the adjustment has been detremental to the economy.
The basic flaw in John’s article is that the debt default option which he claims was avoided, is in fact untrue, we have defaulted, but this default has in fact been felt not through the normal route. The difference on this occasion is that the burden of non repayment has not fallen where is ought to have i.e. on the bank and country lenders but rather on the citizens. The citizens have been defaulted on and in my view will continue to be defaulted upon for a lot longer than John imagines.
If the belief is that the adjustment has indeed ‘worked’ then John sits in a very warped world, where relief is expresed all round because a hedge fund in Singapore gets paid in full plus interest for its Ireland Inc. investment but the bill for such is perhaps passed to Johns neighbours care assistant. Weird indeed.
@ Ernie
part 2, “the unemployed”. That section would mostly have come from the private sector, yes? Private sector doesn’t do austerity (ie reduction of pay), it does complete eradication (ie ending of employment).
So please don’t make out that the private sector has not suffered during this crisis. If the public sector had considered actual job losses (natural wastage and generous severance schemes don’t really count), pay levels (or similar changes) wouldn’t have had to be as large.
Much of the budget seems to have been leaked already, measures including:
The Mortgage Interest Supplement, an emergency measure for those struggling to pay interest, closed to new entrants from Jan
DIRT tax on savings to rise to 41%, up from 33% – It’ll bring about €95m in for the government
The death grant of €850 to help families with funeral costs is to be abolished
Over 30k pensioners over 70 to lose full medical cards and be placed on GP only cards.
The prescription charge is expected to increase from €1.50 to €2.50
The pensioners telephone allowance of €114 per year is to be abolished
The tobacco licence for retailers is to increase from €50 a year to €500 a year
All maternity benefit to be standardised at €230 a week. A fall of €32 per week for most working women.
No sick benefit for the first 6 days of illness (up from 3 days)
@BEB
I never said that the private sector hasn’t suffered. What I said was that the private sector hasn’t been asked to sacrifice.
Your view (which I hear all the time, usually in shrill tones: “redundancy is a 100% paycut!”) confuses the problem and the solution to the problem. Unemployment is part of the economic problem that our society has to try to solve. The suffering of the unemployed doesn’t do anything to help the society: rather it requires the rest of society to do something to remedy it. As yet, those in the private sector who have not lost their jobs (i.e., the vast majority) have not been asked to contribute much in the way of anything to help the state and this budget continues with that. Instead, throughout the last 5 years, almost the entire burden has been placed on the poor, the sick and those who happen to work in the public sector. This is indisputable.
Addendum: losing one’s job isn’t “experiencing austerity.” Austerity is something governments do as a matter of policy.
Are you getting on your high horse because you own a Range Rover Mr. Bond?? 🙂
This is a very official type piece that surely wouldn’t ruffle any feathers where it should.
I don’t believe in being controversial for the sake of it but unlike the early 1990s in Sweden and Finland, the Irish crisis has spurred no significant change.
The opportunity has passed and it’s not a fluke that Finland heads the world both in the student PISA and its equivalent for adults.
Even in enterprise policy, current ministers are like clones of predecessors, much better at making announcements than getting durable results.
It should be strange that at a time of high youth unemployment, that Ireland has the worst apprenticeship system in Western Europe (what it has is the traditional male dominated system with participation at a quarter of progressive countries) but it isn’t strange.
Peter Cunningham, the writer, sums up the conservative sclerosis well, in the FT today:
But in Ireland, it is a case of old friends are best. People cling to old institutions, partly from ingrained habit, partly because the future is so uncertain. The Catholic church in Ireland, beset by scandals involving child abuse, is still the choice of 84 per cent of the population. Sunday congregations show little signs of flagging. For the recent election of Pope Francis, much of the newsroom at RTE, the national broadcaster, moved to Rome.
The abolition of pay-related Maternity Benefit (if it happens) means that the only remaining welfare payment linked to former wages will become flat-rated.
“DIRT at 41%” – I wonder will this mean that it is withheld at 41%, and then it’s up to the saver to claim back the overpaid DIRT, depending on other income?
At the moment, if you have no wage income, just interest income, you aren’t allowed the usual tax credits, and so you will pay DIRT.
Ernie,
Relax, you still have one of the best paid part time jobs around. You are probably still paid 2x a Greek professor, have absolute job security & get away lecturing in humanities. The only cushier status in life is in the Seanad or on the board of a state owned bank.
Over 70s medical card – this was originally automatic, not means-tested. When a generous means-test was introduced (700pw/1400pw), there was no way to identify who was eligible or not. So, AFAIK, there was no way to take the med cards off those earning above the limits.
Now maybe med cards are re-assessed every few years, I think so.
@Ernie Ball
The public sector has been asked to sacrafice comparatively to what? Compared to what they gained from the artificial boom in the first place? Compared to what their equivalents in the rest of the EU are earning?
It is not is dispute the public sector enjoyed windfall gains as a result of Berties vote gathering love-ins otherwise known as “benchmarking”. This BM party that was embraced with such ghusto by the public sector rarely gets a mention now and the partial clawback of those gains in recent years has been conveniently get catogorised/spun as “sacrifice”.
Have to agree with Michael Hennigan here. Nothing changed because nothing was challenged over the past 6 years.
Where is the independent economic analysis? How come the budget cuts are not being discussed in the media by people who actually know about economic policy? The public are being educated on this solely by politicians and journalists.
Maybe we’d be better off if we had independent economists from Finland, Sweden, Denmark and Germany discussing our budgets critically.
Articles like this are of little help, unless John’s job is to help us take our bitter medicine! How can anybody argue that cuts of €2.5bn could possibly be the basis of real and sustained economic growth?
Heck – if you were speaking generally, you could argue that a once-off cut of €2.5bn could lead to a negative growth spiral that would take years to settle. It’s more than just a blip but somehow this kind of argument doesn’t apply to Ireland!
It’s obvious that the govt are more concerned about whether people will accept the cuts without protest than the implications of the cuts themselves and everyone can agree that the govt is over-consumed with survival and optics. Deciding on €2.5bn over €3.1bn cut has been spun as an act of generosity. Another master stroke.
There was some mention of CGT going from 33% to 20%, while DIRT goes to 41%. Some heavy handed tactic to get capital flowing into property again?
Of course we will emerge from this, but what kind of society will we have? They are creating a two tier system in welfare today – where new poor get a spoon while old poor get a ladle…just so FG can say they honoured an election promise when they ask us to re-elect them.
Universal, single payer health care survives in the long run only if it applies to everybody. That is everyone pays the monthly fee and everyone is entitled to service. In countries with universal health care any hint that a political party might impose restrictions ensures a political rout.
Ireland is a “special case” in that the people covered by Blue Cross feel they have arrived and to ensure their place on the hierarchy is secure they blow up the bridges behind them. I have been told by otherwise perfectly reasonable Irish people that you cannot have universal health care in Ireland because the doctors offices will be overwhelmed and the country will be bankrupted.
Service to all children under five in the present circumstances is blatant political opportunism. However, it is long overdue. What is also long overdue are monthly fees related to income for all “free” health care recipients.
We have a long way to go before we enter the ranks of well governed countries. By the way Irish children and adults are not particularly healthy, overweight is now as big a problem in Ireland as it is in Chicago. Add alcoholism to that and we have nothing to boast about.
MH,
I am afraid your writer has not seen the inside of a church for years. Very few go to mass these days. A village in the west of Ireland with 4 roads has no bank, no Sunday mass, no FF cumman any more & half the pubs have shut. Only the GAA survives. The old ways are dead but no new way has come to light.
@Kerchav
You forgot to mention that, unlike the first round, when benchmarking is done in reverse, it is done based on absolutely nothing other than the high-minded principle of “whatever we can get away with taking.” But your post is revelatory of the extent to which none of this is about justice or fairness. It’s about settling old scores.
It remains a fact that for those in private sector employment who have not lost their jobs and who don’t have family members with special needs, this crisis has barely affected their income.
@Kerchav
Oh, and by the way, even with benchmarking, PS pay did not keep pace with growth in GDP (or GNP) during the boom years.
The Anglican Church where all FT correspondents attend is one generation from disappearing with attendance estimated at 3%. A British Anglican going into an Irish Church with 60% attendance thinks it is overcrowded. German churches are also well attended both Catholic and Lutheran but you will have no difficulty getting a seat. Quebec, Canada is ground zero for the Catholic Church implosion, one priest for six churches, half the churches locked up, some demolished. The Quebec women revolted and a church without the support of women is a walking corpse. In English speaking North America women in their twenties and thirties are being turned off in large numbers even in Italian communities. The end is nigh. Heartland, fundamental America is where we were fifty years ago Dia agat, Dia agus Mhuire agat.
Good and bad in all situations. Good is that there is definitely some recovery. Bad is that banks aren’t in great nick.
Good too is that there is political clarity emerging. FG is now truly a party of the right (and quite far to the right too) which is fine, FF can stake out some territory on the centre left, SF are far left and Labour are just left behind having been sleepwalked into Ireland’s most right wing budget ever. If all parties pursue these positions then we will have a more mature democracy.
The programme is seen as a success in as much as yields have fallen on Irish long term sovereign debt and unemployment is slowly falling and GDP is no longer contracting. Yet would these things have happened without below market rate loans and the ECB’s “OMT” policy of financing countries that that meet their conditions?
I think the lesson is that cuts alone were not enough to stop a recession and that central funding is also necessary. There is a scant evidence of recovery yet, just a flat-lining economy.
“How come the budget cuts are not being discussed in the media by people who actually know about economic policy?”
Ask the media.
Eureka ,
I see you have got your green Faux Charvet Shirt back from the Oxfam shop . Always knew you were a soldier of destiny . Up Bertie .
@ Eureka
…it would lead people to believe that we have a political spectrum, but none of those parties have any credibility left and the Dail proceedings are…
We needed a new party or three to run in the last election, take a few seats, establish credibility/trust during this Dail, and then make big noises at the next election but we’ve been short sighted and for our sins, all eyes are on the likes of McDowell to lend his credibility.
No wonder young people are leaving jobs behind!
Ernie,
you think the PS salaries should’ve been that high, or maybe even higher, and should’ve kept pace with GDP (or GNP) during the biggest man made housing bubble in human history?
Meet someone from Electrical Engineering who specialised in Control Engineering and they may be able to explain something of Systems Theory and Feedback Loops to you. (It is harder mathematically, but unlike politicised Economics, it works).
@peadar
Don’t put words in my mouth. What I do think is that what Ireland spends on PS salaries was never particularly high relative to the size of its GDP/GNP. It still isn’t.
P.S. Laughable that you think the idea of a feedback loop requires an engineer…
P.P.S. All economics is politicised
Ernie,
Feedback loops are best explained via Control Engineering. It is a/the major area of the subject. Learn, don’t sneer.
“PS salaries was never particularly high relative to the size of its GDP/GNP”
Almost irrelevant observation in normal times, and highly dangerous comment entering & during the biggest housing bubble in human history, as it mis-leads thinking/ political pressure, towards justifying positive feedback loops leading to a highly dangerous unstable system. Better to sort out the cost of the capital item – the house – as the high cost of this is why the PS wants more money. And it would also help the ordinary workers in the private sector.
Just to make sure I have you right: you think that the crisis (the “unstable system”) was caused by PS salary giveaways/benchmarking?
Whether they should or should not have kept pace with GDP, the fact remains that virtually all of the adjustment (no matter what the servile press dutifully reports) has been on the expenditure side. Those making fat salaries in the private sector have, by and large, not been touched. This continues in the present budget.
There are going to be so many more recession budgets.
The lack of any sort of reform is testament to the limpet like nature of the political and governing class. The descendants of the useless hoors of the 1930s.
Ernie,
So it’s just my imagination then. The USC , excise hike, Dirt at 41%, Vat increase. It’s all a mirage.
The second measure to be included in the Finance Bill is a change to our company residence rules aimed at eliminating mismatches – that can exist between tax treaty partners in certain circumstances – being used to allow companies to be ‘stateless’ in terms of their place of tax residence.
@ All
I venture to suggest that the really striking aspect of the budget is the creaking and antiquated nature of the entire exercise.
The vast bulk of government spending is pre-determined and no progress will be made with regard to control of public expenditure in the long-term until this bulk of spending becomes the focus of transparent and evidence-based debate in the Dáil- the body constitutionally responsible – over the months leading up to the budget.
Equity should, of course, be the driving consideration.
I would have no faith whatsoever in the Irish political class, lobbyists included, to bring about this radical change. But the financial strait jacket in which the country finds itself may force it to do so, notably the introduction of expenditure ceilings which are now legislatively the responsibility of individual ministers, at the insistence, needless to say, of the EU.
The notion being assiduously cultivated that “with one bound our heroine – Caitlín – will shortly be free” simply does not stand up to even cursory examination. The “meedja” will, however, be reacting in its usual manner and concentrating on the popular reaction and its impact on the political fortunes of those involved. It must be admitted, however, that Ireland does not seem to be exceptional in that regard.
@ Seamus Coffey
Probably the most significant of the budget actions widely leaked beforehand.
@ All
Extract from MOF’s speech!
“We have moved, in line with the new European arrangements, to an October Budget which should ensure we can achieve one key goal of Oireachtas committees: the examination of spending plans before the money has been spent. This should bring about a qualitative difference in our debate about spending over the next few years.”
A difference in the quality of the debate would be hard to measure as there has been, hitherto, no such debate and no such “goals” have ever been established AFAIK. However, the next step, a breakdown into categories of expenditure, and their allocation between committees of the Dáil, can hardly be avoided. Obfuscation will, however, continue to be, undoubtedly, the political order of the day.
Ernie,
A significant component of the crisis, yes. But not the only one.
And the PS high cost is a major reason why we lost economic sovereignty as – bear with me! – as if we did not need to borrow to pay the very large PS bill then we could have told the ECB and bondholders to get lost (even after the initial 2-year time-limited bank guarantee was up, i.e. no longer continue to guarantee the banks). (Maybe we should’ve then given the PS worker a free (extra) house instead of the high salary, as we told the ECB where to get off).
The ‘expenditure side’ was, and is still, huge, that is why there has been some adjustment. It should never have been let get out of control, but also PS worker cost-of-living should not have been let get out of control (mostly the cost of their home).
If a ‘fat cat’ makes a new widget and sells lots abroad then I’m happy that he can pay himself and his employees more and thereby pay more tax. (And we hit the high rate of tax here at a quarter of the level of the UK), (Also there’s a lot of risk, and many widget makers go bust and have little or no pension).
But the problem is when the ‘fat cat’ is rich because they just flipped houses, or cornered a section of the economy, or if they are part of a rentiér class. i.e. they actually earned nothing for the country, but managed to insert themselves in a parasitic position. This is a problem that still needs to be tackled, but it is a very small percentage of the number of private sector workers.
@Tull
Those increases are derisory and you know it. I know it because I also pay them.
But interesting that you include VAT, which is the one tax they chose to increase and that, not coincidentally, is the most regressive tax there is, followed by the USC which hits its top rate at earnings of €16,000
Again: fat cats have been untouched.
Ernie,
You should not be throwing stones . You are in fat cat territory on a university lecturer’s Terms and conditions.
Unlike , your hated private sector worker or business owner you have job security and a munificent pension scheme. Not bad for a part time sinecure in an average university.
Tull,
Don’t be personalising this against Ernie too much. We don’t know details, do we?
Ernie,
I also want to touch the ‘fat cats’, but mostly the ‘bad fat cats’ I mentioned above: when the ‘fat cat’ is rich because they just flipped houses, or cornered a section of the economy, or if they are part of a rentiér class. i.e. they actually earned nothing for the country, but managed to insert themselves in a parasitic position. This is a problem that still needs to be tackled.
But note again: it is a very small percentage of the number of private sector workers.
Otherwise I’d like to attract some more (foreign & Irish) intelligent ‘good fat cats’ to develop and make more widgets here, and get all that tax from them and their employees. I am afraid though, of secure public-sector employees screaming for higher taxes on well paid transient people which might make them go elsewhere. This is good for the PS employees as demand for things (houses etc.) goes down and the PS employees are relatively richer, and have higher self-esteem in the community as there are fewer better off than them, and there appears to be a stronger link again between general academic education and position in society.
But it is a short-sighted selfish approach, and bad for the country in the long term. That is not to say that we must not tax the ‘good fat cats’ properly, but we must do it sensibly, such that they don’t leave.
@tull
Yeah, that’s right: I work part-time. You haven’t got the slightest clue…
And I have a “munificent” pension, which makes me a creditor of the Irish state, however without the ironclad guarantees that, say, Anglo bondholders get.
But as for being in glass houses (and despite your best efforts to personalise the matter), this is not about me. It’s about justice. And the fact is that this government, like the one before, have repeatedly gone after certain sectors (the poor, the public sector, the infirm) while leaving rich fat cats (including, I gather, one tull mcadoo) untouched.
Here’s one of no less than 25 itsy-bitsy ‘job creation’ measures. The scheme for home renovations offers a 13.5% rebate over the two subsequent years for jobs costing €5,000 to €30,000.
Currently Bob the Builder agrees to waive VAT on a €10,000 renovation. Cost is €10,000 to Joan the Householder and Bob takes his chances with the Revenue.
Under the new scheme, cost is €11,350, Bob can pay his VAT but Joan has to fill in forms and wait two years to get her €1,350 back.
This scheme is clearly designed to keep compliant small builders competitive with folks who waive the VAT. But there is no incentive whatsoever for Joan to tag along. Am I missing something?
@ Ernie,
Yes they have gone after some of those, but the PS are not all innocent angels. The non-lower grade PS were on enormous salaries compared to the rest of the (old) EU and compared to the private sector. Instead of reducing the cost of housing for everyone, the Government (of the day) listened to the special pleading of their employees. This added to the bubble, and completely knackered the ordinary private-sector employee (they’re not all Bill Gates), and in fairness to most PS employees all they wanted was to be able to afford a home like their parents. but the way they went about it with the Government, along with the banks & developers, ruined the country.
Bringing salaries to some sort of average level is needed, and still hasn’t been achieved in many areas. The President gets twice what the Finnish President gets, and so on down the scale.
A friend finishing his PhD a few years ago (before the crash) was looking for some temporary clerical work and he said the conditions seemed to be about 50% better then in the PS…so while the lower grade PS workers don’t get a lot, their Private sector peers get even less.
The infirm & poor would not need to be approached if Labour were not protecting the other Right Wing in this country – the well paid PS worker.
re: fat cats, I refer you to my earlier post. Yes, tax the good ones cleverly, and just get rid of the parasitic bad fat cats.
As I have just seen the headlines, may I draw attention to the one cut that is particularly nasty and will affect hundreds of thousands of workers, virtually all low paid private sectors.
Insured private sectors workers are effectively no longer insured for the fist six days of any illness. Many of these people will get no pay during that period.
The change of course will not affect the officer class. They get paid, whether at work, or not.
Did I also hear the .6% pension levy, again virtually exclusively private sector, is to be increased to .75%.
The maternity benefit cut will also primarily affect private sector workers.
It must be a great relief, and it must take very very tough decisions for policy makers, to make cuts and collect taxes from which they themselves are exempt.
The government has succeeded in opening up clear blue water, between the marginal private sector workers, and the cossetted sectors that are part of and that they look after so well.
@ CMc
No!
Of course, this may be an episode of Morecambe and Wise rather than a sane budgetary process.
To control the budgetary process, the very minimum requirement is to get on top of the accounting necessities to enable one do so.
@DOCM,the SEC just closed an investigation in which questions relating to…
“Your responses state that your Irish subsidiaries generated substantially all of your $40.4 billion in undistributed international earnings, creating a tax benefit of approximately $5.9 billion in 2012,” the SEC said. “Thus, it appears that you should specifically reference the potential risks associated with any changes in Irish tax laws.” http://www.latimes.com/business/technology/la-fi-tn-apple-reveals-sec-review-of-irish-tax-disclosures-20131003,0,7138891.story
@ JG
Does that materially change the situation?
The international tax dance continues, the important point for each of the players being neither to get ahead of the music nor be left behind it.
@DOCM,the SEC ‘asked’ Apple if there as any ‘risk’ of legislative changes imminent,the answer was NO…shortly after the ‘paddies’ move the goalposts 🙂
Be thank full the PS sector is not at least…
“PANGAIO, Greece—A local treasury employee in this mountain community shot the mayor with an Uzi submachine gun in late 2009, in the grisly conclusion to a suspected embezzlement scheme.
Nearly three years after he was convicted of murder and sentenced to life in prison, Savvas Saltouridis remains on the municipal payroll.” http://online.wsj.com/article/SB10001424052702304526204579097150213981632.html
‘catalytic finance’!
Methinks a catalyst goes in and out as same; not the case with ours as every odious cent has to be paid back: ‘catastrophic finance’ more like.
@ CMc
I paid our plumber €600 cash about two months ago. Similarly €550 to the guy who put up a new satellite dish and saorview aerial and rewired all my TV points in the house. I bought some DIY supplies recently in two businesses where I live and both refused to take a credit card or laser saying they didn’t have the machines so I was forced to pay cash. I’m deeply conflicted about this. On the one hand I’m firmly in the PAYE sector and can’t avoid a cent in tax and badly want to report these guys. On the other hand I feel I’m getting a bargain (rightly or wrongly) and something in me stops me reporting them. Perhaps if there was a confidential Revenue phone line I might consider using it so that I could report these people. If this new Budget scheme was backed up by more action against the black economy it could be good but, you are right, as it presently stands there’s no incentive to participate in the scheme if you want work done around the house and particularly if you’re getting it done in dribs and drabs.
Ernie,
Everybody who has ever gone through an NUI undergraduate humanities degree will be familiar with the over worked lecturer with a handful of classroom hours, 3 months off and reproducing the same research paper every year or two. For that they receive more than that other great part time job – the Senator- for roughly the same contribution to society. You wail against the unfairness of it all. And you are right, it is unfair. You are massively overpaid relative to say a Greek academic. You are a rentier in Irish society.
Jos. Ryan,
Well spotted. This is another sneaky assault on the pockets of the private sector to pay for the still inflated T&Cs of the officer class in the public sector. There are some good things. Funding a universal GP care benefit through reducing the perks of rich pensioners is a step forward.
Am I correct in saying that PRSI is being extended to all earnings ?
@ Tull
Like the FF reference – suppose I asked for it. But it’s not true.
My values evolve but simply put are:
Free education to LC
Free health care to all
A dole that tapers to 80% 60% 40% 20% the longer people are on it
And the german system os state supplementing low wages through welfare payments (which incidentally is state aid but something the Germans can get away with)
Eureka,
I was hoping that there was another soldier out there.
Ernie,
Exactly, what need of the 3rd first year subject delivered by a lecturer you don’t like and who clearly has no respect for you. Still it keep some people off the street and in secure employment.
Sporthog:
Sadly the pension levy will be 0.75% in 2014.
But there is good news – unfunded pension schemes are exempt! The logic is straightforward – if you are 100% underfunded, as against 30% or 40%, that’s fine.
Colm,
Hmmm, what are you getting at. Name one scheme that is 100% unfounded. Ahh, yes, I see.
@Tull
Thanks for the rentier laugh, you class warrior. Is Ernie also an imperialist lapdog by any chance?
Seafooid,
More of a running dog, public sector officer class, Kulak and probably an excellent pool player to boot.
@sporthog
Colm McCarthy is correct. The pension levy goes to .75% in 2014.
A wealth tax for people unfortunate enough not to be part of an unfunded pension scheme, or people unfortunate enough not to work in a bank, where the State will happily top up any underfunding with a billion or two, as you head off into the evening sunshine in your late fifties.
I am not clear on the PRSI cange you mention, but such a move has been flagged.
It appears to me that taxing Savings was not well thought out. The interest rate earned is close to the rate of inflation. Then that puny return is taxed which means the return is less than the rate of inflation. The rational response is to put it under the mattress or get it out to a tax haven.
Then we have our banks which are not lending to SMEs’, now that the disincentive to deposit savings in banks has increased does the government think the banks will take in more deposits so as they can lend more to SMEs’. Only in Ireland, a pity.
Some countries have addressed the low rate of deposit interest by introducing individual Tax Free Savings Accounts whereby individuals can deposit up to 5,000 to 10,000 per year into a single account per individual globally confined to domestic banks. I expect to see the Irish gov’t bumping against the hard wall of reality and using something similar to address what will be a serious problem for banks.
Another policy done over a few pints by the bis’ and it shows.
I see they read the IMF tax paper on VAT gaps.
Hope springs eternal.
@MickeyHickey,perhaps that’s the intention get them out there spending and shopping,investing.Maybe,someone has a link but I think people have been retiring debt and saving,could be wrong.My nerves are a bit frayed,is the US gonna default,inconceivable!
Heard it was packed today,jammers 90% success rate,no problem the market absorbing w/o significant price dislocation significant amount off D4 repo BTL’s. http://www.allsopspace.ie/auction/past
Given,that “savings” potentially could be converted to equity,I would be cautious bout having too much saved/invested in domestic irish banks…..
It does seem a bit odd that a man with 3 public pensions is abolishing a levy on banjaxed private pensions as promised while introducing a new one to provide for contingencies.
In 2009, the €1bn shortfall in the university and FAS funds was sort of magiced away by transferring them to the NTMA to be rolled into the pensions fund.
No levies there of course and when a giant and profitable Swedish multinational decided to close the Irish scheme that I had been a member of, when the good times ended, the doormat State had no rules to protect citizens and others.
Just on rules, claimed transparency and other fairytales:
I did think that 84% attending mass seemed a bit high – maybe not in the country where farmers may pray for rain or sunshine or wonder how much they have to pay for spuds at the local Tesco.
There was a chart in the FT a while ago that showed the development of sov debt for the piggies since austerity began . All rose .
There is no interest in growth. It is all countercyclical. Cut and repeat.
There is enough money in the EZ to cover the losses
But beggar my neighbour and bugger the unemployed is the system. It is all about procrastination.
Draghi will do “whatever it takes.” Sometime.
@ jg: “My nerves are a bit frayed, is the US gonna default, inconceivable!”
Relax john: Tax revenues are multiples of the liabilities. Interest payments on debt are fully secure. How-and-ever, its the domestic spending programmes that face the chop (or a least a cap on spending) if the Debt Ceiling ain’t raised. Watch the reps and senators from districts and states with lots of defense stuff. They will not buckle.
Harvested the last of my winter turf yesterday. P*ssing from the heavens at the mo. Maybe I’ll get the day off!
The strange thing about these budgets is that no one ever wonders why the State was funding all this stuff in the first place. Communion grants? Bereavement grants? When I hear about this stuff I wonder what else is out there in the exotic world of social welfare. Can I get a grant to go for a few pints on Saturday?
@JF
Sure, who could anticipate dying? A shocking surprise like that needs some state support.
Overall verdict on Budget 2014: Move along now, nothing to see here.
@JF
Who cares? You dont think youre always going to find minute, irrelevant expenditures you disagree with in any system?
Being a big boy is learning to live with the fact that you cant shape the world in your image, rather than whine incessantly about it
re Bereavement grants – What do you expect the broke to do with their dead, throw them in a ditch?
@ Johnny Foreigner
Politicians like to be generous with other people’s money.
Remember the beggars on horseback during the bubble?
In Denmark a former PM has been criticised for first class travel on behalf of a publicly funded institute.
The Politiken daily says:
“Thousands of people travel around the world with first class tickets and check into luxury suites that are paid by others. It’s a sort of ‘Samsonite Fraternity’ that meets at conferences without producing anything meaningful. … But when a Danish politician is at the head of one of these organisations, we can expect him to put an end to such practices. That’s why EU summits in Denmark serve tap water instead of Perrier. Or there’s a bike trip through Copenhagen to show what the real world looks like. Denmark’s politicians must refuse to use other people’s money to fund their own luxuries. Lars Looke Rasmussen’s behaviour marks an unpleasant break with this attitude.”
Imagine tap water at Dublin Castle?
The airline industry would be in trouble absent all these freeloaders.
On non-first class welfare, my sister worked in housing at Cork City Hall and people would come in to abuse staff that the delivery men didn’t unwrap the new fridge or that some item like a free washing machine needs to be repaired.
Half the population is officially on welfare but lots more are dependent on public funds.
On bereavement, people with no money will be helped as there isn’t a choice.
@rf
“What do you expect the broke to do with their dead, throw them in a ditch?”
In a sentence you have perfectly captured the depraved nature of the Statist mentality. Even when dealing with the most eternal and universal facts of human life you can’t get your head around anything other than Big Brother wading in to sort things out.
Graveyards are the last libertarian outpost in Ireland?
@rf
If you have been enslaved all your life by welfarist patronage then the graveyard is the last outpost of dignity at least.
@BW,Snr looks like you all set then,fuel and heat and the garden…
The markets are expecting a deal but then again no one seriously considered CH 11 was a likely outcome for Lehman,going to be a very interesting day.First thing here,how has the reaction been overall,looks like the oul bait and switch worked,in that 3Bil was originally mooted.
Is the intention to encourage emigration? http://www.politico.com/story/2013/10/economy-markets-government-shutdown-debt-ceiling-congres-deal-98379.html?hp=t1_3
@JF,has cremation caught on over there it’s a cheaper option…a bit like communions I never got the extravagance,pomp and ceremony involved.Its supposed to be a solemn religious ceremony not a p**s up.
“The average cost of cremation is a fraction of funeral and burial costs in any market, less than a quarter of the $10,000+ cost of an average funeral and burial. With cremation, there is no need to embalm or to purchase a cemetery plot, casket, burial vault, or gravestone. Many families choosing cremation forego a traditional funeral in place of a memorial service or family gathering. Another way to lower cremation cost is to preplan and prepay for cremation to lock in today’s price.” http://www.neptunesociety.com/cremation-costs
@JG
Funerals would be a lot cheaper if the Government wasn’t inflating the price by giving out bereavement grants. All these grants and supplements and allowances aren’t there for the welfare recipients, they are there for the rent seeking landlord types who thrive on the back of them.
Meanwhile, in the UK (dole = £56.80 a week) new record levels of employment recorded, and the dole claimant count is falling rapidly.
The Bereavement Grant is little more than a subsidy to undertakers who in rural Ireland often double up as publicans/grocers and life insurance salesmen. More than a few go into politics. Remember the slogan of John Malony TD for Laois-Offaly “the last man to let you down”.
@Tull
+1
To a Statist all this circular money churning counts as economic activity. Put 10 cents on the pint, put the all the extra VAT into a big pot, pay out the dole from the big pot, use the dole to buy some pints. Hey presto – GDP!
@ Colm McCarthy+ Joesph Ryan,
Many thanks for the clarification, dear oh dear, worse than I thought!! It is galling to hear FG talk about “their plan is Working” yet it’s money stolen from private pensions which is being used to fund these employment schemes.
@JF i noticed the govt. is ending and or phasing out mortgage interest supplement,another housing market subsidy.Why do they consistently involve themselves in the housing/rental market,if ya cant pay your mortgage interest,WTF is the govt. doing paying it ?
@JG
Still plenty of welfare for the insiders in this lovely little country.
Gives you an insight into who really counts in this country. Search for ‘third level academics’.
@JF thanks for that,great auction yesterday,sellers must be delighted but given the dearth of inventory due to inaction by the gov. and CB,there may have been many,very frustrated potential buyers.The canard that repos/foreclosures will depress the market further is simply nonsense.Housing markets in the US that had non judicial foreclosure and tackled the issues head on recovered quickest.
@John Gallaher
Irish savers of a certain maturity. I had an aunt who lived on a farm worth 2 million+ bought in the dirty thirties with money made in the Buffalo, NY hooch market. She lived so frugally that my brother used to take her groceries and turf. When she died she had Euro 60,000 in a savings account in the local bank. She was born and educated beyond high school in Buffalo. She then returned to live with her parents. A well read, intelligent, good looking, personable woman, never married.
The Irish are a different breed and as they push into their sixties and beyond they put their money where it is safe and they see savings in Irish banks as being safe. Not alone do they not spend but they cut back on the necessities of life. Good luck with trying to get Irish savers to spend.
@JF
Is that supposed to be a joke? Or is the fact of third-level academics getting €518 in flat-rate allowances supposed to be some kind of scandal and proof of a sinister cabal? If so, then by my reading of the table, the real Masters of the Universe are the members of the RTE Concert Orchestra.
@MickeyHickey,hi mickey so do you think the govt left a bit on the table…
they are a different breed indeed,not a word about this derisory performance,may as well put it under your bed safer…
they pursued a ‘shotgun’ or throw some muck at a wall hoping some it will sick strategy,with their US RE portfolio.
“The NPRF’s Discretionary Portfolio earned a preliminary return of -0.1 per cent in the second quarter of 2013 and +2.7 per cent year to date. Since the Fund’s inception in April 2001, the Discretionary Portfolio has delivered an annualised return of +3.8 per cent per annum” http://www.nprf.ie/Publications/2013/SecondQuarter2013PerformancePortfolioUpdate.pdf
LOL,
I am presently watching some risk manager presentation on german renewables, and it is good that I am far away, because I would like to shake him, for all the gross nonsense and lack of understanding the real world.
“they see savings in Irish banks as being safe. Not alone do they not spend but they cut back on the necessities of life”
I know this crazy behavior, same here, but if anybody has a recipe against it, tell me!
@ francis
I suppose the problem is that the German Minister of Finance might come along and expropriate their savings.
@ All
FYI the Department of Pubic Expenditure and Reform circular on ministerial expenditure ceilings.
To quote the Minister for PER (not the MOF as mistakenly by me above);
“We have moved, in line with the new European arrangements, to an October Budget which should ensure we can achieve one key goal of Oireachtas committees: the examination of spending plans before the money has been spent. This should bring about a qualitative difference in our debate about spending over the next few years.”
Can anyone spot the role allocated to the Oireachtas (in reality solely Dáil) committees in the circular?
By way of contrast, how Sweden tackled a much less serious financial and budgetary crisis (US academic blog posts culled from the Web).
At least the first forced tentative steps are being taken in the direction of real reform the sine qua non for which is a basic element of cross-party consensus. Not alone is this lacking but there is a near total lack of awareness at all levels of the need for it.
Either it is found or a decade of a stagnant continued truncated version of the economic status quo is unavoidable.
Le canard enchaine, the French satirical magazine has a cartoon this week that starts
“Avant c’etait les 30 glorieuses, aujourd’hui c’est les 30 merdeuses”
Before, we had the 30 glorious years (of postwar keynesianism) ; today we have the 30 sh*t years….
Gavin,
“expropriate their savings.” beyond the effective 2.5% per anno by now?
(not me, just to be clear, my assets develop nicely, 14% yoy raw to avoid even nicer numbers : – )
Shall we organize mass executions for “financial-illiteracy” ? or what do you have in mind?
@ francis
Cyprus.
lol just watching the local saxonian mdr.de / völkerschlacht
and the pickering about how many groschen for french soldiers to be suffered in their house
this is a pretty interesting new format for 200 year old stuff
@ Gavin
Cyprus median household wealth was 10x MY PEOPLE (eastern german )
@ Francis
Please, for the love of god, stop quoting that idiotic and extremely flawed ECB household wealth study. Repeating it’s flawed and politically motivated findings only makes you out does not help your cause.
@ Bond. Eoin Bond , all
I am all ear for your specific documented allegations against this study.
Until then these are the official data.
@ All
Miriam Lord nails it! The budget of “bits and bobs” departs stage left, and right, at a rapid pace; and fails to enter history.
@francis,hi francis relief,shock it came so close,sadness over the GOP…
Actually at a function,my posts after some grog tend to be tiresome to say the least so will sign off.
In fairness haven’t really reviewed it in detail,just following CNBC,will watch Charlie Rose later.
But will leave you with this:)
“Germany is trying to save the world. Most countries are caught in a cycle of obfuscation, blaming others for climate change while making insufficient efforts to lower greenhouse-gas emissions (GHGs) by the 80% needed to prevent the worst effects of climate change. Germany, by contrast, is making tremendous efforts to prove that this is actually possible, targeting a whopping 95% reduction from 1990 levels by 2050 (WSJ, 2013). Alas, the country’s plan is flawed and may end in failure.” http://ssppjournal.blogspot.com
@ Mickey
I still own stock in nuc companies. I looked today for the first time, that I lost 60% on that after our post fukushima decision. I never cared.
Having social consensus and my people sleep well is way more important.
@ John G,
we know that it is a long hard slug.
“One problem is that Germany is a dark, cloudy country, hardly the most favorable terrain for solar energy. As one energy company executive put it, “Photovoltaic [energy] in Germany makes as much sense as growing pineapples in Alaska”
and we very much hope that others will join us along the way.
Many for whom that would be a whole lot cheaper.
The 150 b we had to pour into driving PV costs downs are just the beginning. The next 200 b will go into driving overnight storage cost down, and then for a week, a month, a year.
At the end is the Promised Land. I will not get there with you.
100% renewable, resilient, robust, not being dependent on any idiot somewhere else, not threatening anybody, and free to adapt for everybody else, our vision.
But on the way to that, I will have a very sharp eye on the costs, and not tolerate any sub optimal phantasies, exploitation by rent seekers, and you can guess the rest. “Not one cent” is the battle cry of the working man.
Jim Flaherty Minister of Finance in today’s speech from the throne in Ottawa promises to outlaw deficits permanently.
5. Deficits will be illegal
The government will bring in a balanced budget law, one that will require “balanced budgets during normal economic times, and concrete timelines for returning to balance in the event of an economic crisis,” the speech says. The government also renewed a pledge to balance the budget by 2015, and return the debt-to-GDP ratio to pre-recession levels by 2017. Other provinces have anti-deficit laws on the books, but critics note that they’re frequently broken.
This we do not need. With the prospect of over 50,000 per year immigrating for the next few years we need to get our act together. I hope someone was arrested for this.
@Gavin
There was an interesting quote from Dieselboom the weekend of the Cyprus heist. He said the main pE
@Gavin
There was an interesting quote from Dieselboom the weekend of the Cyprus heist. He said the main EZ players were all agreed on the need to shrink the banking sector. So whenever panic comes rolling around again PTSB might be of particular interest.
@ francis: “100% renewable, resilient, robust, not being dependent on any idiot somewhere else, not threatening anybody, and free to adapt for everybody else, our vision.”
Vision, francis? Maybe you are wearing some form of ‘corrective lenses’ in respect of re-usable energy sources? Those critters need liquid fossil fuels in all aspects of their deployment, else they go dark! Gas may get you some distance, coal will get you none. Whence the oil?
@Seafoid
re: Dieselboom on shrinking banking:
Here’s an idea. Why not get rid of banking altogether.
If the solution of every problem is to continue to ‘shrink’ the banking sector, then the ultimate solution is obvious. Get rid of banking altogether.
Or Dieselboom & Co to consult a shrink.
Debt Crisis:
Troika on the brink of implosion
16 October 2013 Mediapart Paris
Disagreements between the European Commission and the IMF on how to end the debt crisis in Europe continue to grow. Starting in Brussels, it is possible to envisage the careful dismantling of the group.
One could begin by asking How do we treat Irish Travellers? Worth noting that 85% of extra Traveller education allowances cut in recent budgets. Long ways to cosmopolitan from here …
Ambrose reckons we have been shafted on the bank recapitalization deal…..
Megan Greene’s comment would be worrying if she had actually called anything correctly in the Eurozone in the last few years. She’s got the vague stuff ok (weak economic growth, political/institutional problems), but the big stuff (Greece exit, more Periphery defaults/bailouts) more or less completely wrong. Most of her pronouncements generally involve a lack of hard data analysis and an “unless…” at the end as well.
There were 240,000 employed in construction at end Q2 2008: should the surplus have been made public sector employees?
The gap between collapsing revenues as the bubble bust and inflated bubble spending should have been paid for by Germany and on top of that it should have paid for the cost of the reckless banking including the bailout of Anglo depositors!!
We affirm that it is imperative to break the vicious circle between banks and sovereigns…When an effective single supervisory mechanism is established, involving the ECB, for banks in the euro area the ESM could, following a regular decision, have the possibility to recapitalize banks directly…The Eurogroup will examine the situation of the Irish financial sector with the view of further improving the sustainability of the well-performing adjustment programme. Similar cases will be treated equally.
As for the June 29, 2002 statement, it’s not crystal clear:
It could be argued that the restructuring of the Anglo PNs was consistent with the reference to the Irish financial sector.
The reality check here is that nobody of consequence promised to write a cheque for €64bn – maybe the Irish delegation mistook leprechauns or pink elephants for the real thing. Angela Merkel was the only person who could have made that promise.
It would be surely stupid to believe that she did.
@Bond Eoin Bond
Thanks.
A bit like Meredith Whitney….the muni bond market is still intact.
Still, 209 b gross or thereabouts is a lot of loot to refinance or repay even if some of it is of 30 yr duration.
This is another project in pharmaceutical, biomedical, and energy sciences in which we’re going to be world class. And it’s only costing €75m.
Oops, correction: it’s creating 75 jobs and only costing €52m. It’s easy to get the numbers mixed up.
Debt crisis:
Irish exit into the unknown
17 October 2013 The Guardian London
After three years of public sector spending cuts, Ireland looks set to exit the EU-ECB-IMF bailout programme on December 15, but at what cost? The country remains mired in depression and the economy is now hollowed out.
As the author points out, budgeting is a year round process. There is some evidence that the pressure of budgetary constraints is forcing recognition of this fact. Equality may even get a look in!
Oops, correction: it’s creating 75 jobs and only costing €52m. It’s easy to get the numbers mixed up.
No worries!
The Irish Times reports: “It was a good day for jobs yesterday with the announcement of more than 340 new positions around the country.”
It counts the Limerick project as creating a total of 220 jobs.
There are plenty suckers for this jobs propaganda.
A construction firm like Sisk gets a new order. Who can tell from a spoofed-up press release that it will hire new staff when it begins the project?
The current spinners have embraced the routine of their predecessors by plucking indirect job figures from the air, for impact.
On a positive note, news overnight shows that Google Inc. posted a 12% rise in quarterly revenues.
The ESRI has predicted that computer services accounting for 40% of services exports will grow 7% in 2014. So at least with the positive trend, that magic target will likely be met. Only if it was as easy elsewhere!
@ All
I see the Dunphy-King spat has almost ranked with the Budget for media attention this week.
Noel King is a decent man who I worked with in the period after the dot.com bust when a soccer portal that a retired rich man had given more than 2m IEP to his son to build, was floundering.
A claimed altercation in 1978 has been mentioned. Whatever about that, Dunphy made his debut at RTE for the 1978 World Cup and on the night of the final that Argentina won, he had turned up in dark shades as his car had an altercation with a tree on the way home after one of the semi-finals.
@ all, P.Lane, Brian Woods, Robert
a) Germany is not crazy
b) marginal link European energy
c) Recent generation cost numbers
d) storage costs developments
e) Nudge things beyond a tipping point
f) Kerry Gold Butter
g) Opportunities for Ireland / Irish business
h) economics research opportunities
At first glance off topic, not related to your budget, but just to comments from others here
What I get from Brian Woods Snr, Robert in the other threat, and others, is that you apparently think we are just plain crazy with a our energiewende (How would Irish say that?, submariners call surprising 180 degree turns “crazy Ivan” : – )
And as you can read above, I am also still working on improving my faith in it : – )
But I want to give you the following arguments:
a) in the last 60 years we have not been that bad in managing several other things, wirtschaftswunder, OSCE, reunification, etc
b) interesting link
http://marginalrevolution.com/marginalrevolution/2013/10/european-energy-fact-of-the-day.html, with lots of links pointing from there
I especially like the “German, Swiss, Austrian agencies to work together to support pumped hydro storage”. In the D-A-CH countries we will double the capacity of hydro storage plants from 12 to 24 Gigawatt by 2020, hubbing this to about 33% of the average demand in this area, “all we need”, and we poured already on this reunification day 59% of renewables into the European grid, without crashing it, despite all those theoretical phase stability arguments.
c) Recent cost numbers
from this summer on, it is apparently possible in Germany to produce solar power profitable for 10 c/kWh for larger installations (see EEG wiki) total costs, and a yearly decay of real 2.0% (inflation of fixed nominal). For people with more sunlight, and enough space, there being able to use cheaper amorphous, it must be possible NOW, to produce for 5 c, making this competitive for fuel based generation.
Closer to the Equator, and therefore more (> 1.5x) and more balanced (> 2.0x) sunshine, the production profile (daily and yearly) more and more matches the consumption profile, and then they extend their coverage into the evening, at first with battery storage, simple car batteries, one hour, two hours …
A solar photovoltaic (PV) module, a little black box for some electronics, and some car batteries, this is something you can put into any African hamlet, no moving parts, no maintenance, no engineer needed. Should work in Ireland as well, …. Just some cheap teasing : – )
That will drive down cost for this storage simply by sheer economics of scale, without any German subsidizes, and of course not permanent, local battery recycling companies, etc.
For Germany, we can always have plants for own brown coal and Russian gas as hard winter backup, 5c production costs – 2 c fuel, makes about 3c per needed kWh as a backup, definitely affordable for us, especially since we will not need this for more than about 1/3 of the total volume
d) storage costs developments
I did recently a double checked calculation with a friend, that even a small localized car battery storage does not cost more than 1c/kWh per hour storage. Cut this in half for larger scale, now, another half for “in 5 years”.
And we have stable full day energy supply for many regions in the world. Relieving the pressure on global, especially carbon-fuel markets.
What we achieve with that here for our 1% german people fraction of the world, also benefits all mankind, without making anybody dependent on some mean patents, or dominating production scale.
e) Nudge things beyond a tipping point
To summarize the above, we see lots of opportunities to nudge economic developments beyond tipping points, where then the further economics of scale take care of themselves, without any further contributions of our own. 150 b Euros for the PV modules as a good example.
Bringing this now back to the topic Ireland and budget (Opportunities for Ireland / irish business):
f) Kerry Gold Butter
Whoops, how does this relate to this at all? Please bear with me. I do presently enjoy, with my MBA perspective, to watch how Irish butter gets into the German market. Just one year ago, this was sold at 1.65 Euro per 250 g pack, versus 0.99 for local butter, to people, who love the special consistency/flavor, a tiny fraction, maybe 5%. Presently they repeatedly run actions to sell it for 1.3, 1.1 Euro, then retreat to 1.4, 1.3. They are “developing the market”, more people try it, and my estimate it, you could get this to a 20% market share, while keeping a 0.1 premium to the local price of now 1.15, opening up a 80 Mio Germans + 70 mio around to a 5 times larger production base in Ireland. Wild guess. Your Feedback is very welcome to me. Restrictions, problems I don’t know about?
g) Opportunities for Ireland / Irish business
Engaging in many forms of renewable energy stuff, does not require to gamble large investments / installations. It is often a modular business, the local sources of biomass (that was driving my Kerry butter bit above). Irish businesses have some home bias advantage (lets say 20% easily) to provide local installations, you don’t bet the farm on it. Nuc plants run on uranium from Canada, Niger, and some more unpleasant, uncertain places. You will not ever develop the technology on your own, you would buy the turn-key plants from EdF /Areva. Half the costs of PV are local installation, putting various pieces together, perfectly replaceable with more local components, over time.
Some irish bog with some hydrogen from electrolysis, from irish windmills and PV converted into some better storable stuff? No big opportunites for powerful patents to choke the rest of the world on, sure, desperately hoping that some irish genius sees, what 100x more people somewhere else overlooked, but organic, local, resilient development, replacing expensive imports with home grown.
h) economics research opportunities
I believe that the economic dynamics of the developing renewable markets, with negative prices for physical (albeit not material) goods, are a fertile, productive ground for more economics research, and because Ireland is in many respects a unique place, and not just with respect to that, there could be a unique Irish flavor to that, only you can develop. It is your place, your problems and opportunities : – )
And focusing on what you are especially good at, both in production and research, the comparative advantage, is often a good idea.
The Economist magazine Oct. 12th-18th has a 14 page supplement on the world economy. I found it interesting in general as well as the comments on Ireland.
“Austerity is the enemy of growth and cannot resolve the crisis.” Perhaps it should read that austerity is now the “engine of the economy” (huge numbers making a living off austerity admin and related) but cannot provide growth.
As MH has regularly pointed out, the economy has no real growth or employment engine at this point. It is largely functioning on future cashflow (borrowing against its future). That has not changed and is not addressed at all by John McH who always justifies his analysis on the basis that there was or is no alternative…..and he once again CONFUSES LIQUIDITY AND SOLVENCY…
@Francis
Distributed solar thermal collection just makes sense and is now an implicit part of the Building Regulations of renewables laggards such as Ireland and the UK. Distributed solar PV is more questionable at present pricepoints for hardware and installation but through the incentives programmes of most EU and US states at least has the virtue of boosting volume, industry standardisation and moving such investments out of the black economy.
Ireland is substantially an irrelevance in renewables technology research and innovation. As it is energy sector, the margins achievable are utility-level margins i.e a few percent, which requires large scale commercialisation to make any such ventures worthwhile to investors, unless the market is incentive-driven as in Germany.
In a tiny deeply indebted state such as Ireland very few businesses are going to entertain committing capital to such plays, especially where the Irish government has shown minimal commitment to encouraging development of local renewables business. There were once some indications that a substantial commitment to ocean energy might be made (feed-in tariffs and funding for industry-led R&D) but this sputtered and died. Of the two local ocean energy developers of substance, one was bought by a French defence contractor and the other was filleted into liquidation by an EU energy group while the Irish government bumbled ineffectually.
Your comments about patents and the attractions of agrarian small scale biomass-based renewable energy generation seem to me more to do with a German vision of Ireland as a bucolic, green retreat. You know very well that paradigm shifts in energy sustainability require resolute leadership, social ‘glue’ and a lot of wealth. The road your state is embarked on to deliver an energiewende is also the only viable road for states such as ours. Practical support would be appreciated.
‘m not sure what point you are making through those aggregate patenting stats.
In renewables and transport technologies German inventors dominate. US inventors dominate in medical device, cloud computing and non-cloud-related telecoms technogies as well as consumer electronics.
But we note that the US now lacks a consumer electronics manufacturing capability and that its manufacturing companies increasingly rely on international trade partners for product/service engineering, manufacture and order fulfillment. Patents provide the means to control global business networks.
Globalisation of US corporations is tax-driven as well as to do with unit labour cost. German corporations still predominantly engineer and manufacture product and perform order fulfillment out of Germany. I don’t however believe that this is tax-driven behaviour or even to do with low unit labour costs in Germany. I think there are strong national and societal considerations at play, not to mention imprinted memory of what assets need to be controlled in order to survive major conflict.
francis: Re your 4:15 -Oct 18th. Been away from desk for a while.
What I get from Brian Woods Snr,…. is that you apparently think we are just plain crazy with a our energiewend …”
Did I say that? Or something similar? Seems odd. Germany is welcome to any energy route its politicians and citizens will decide. The matter may or may not be any benefit to us.
What does matter, to us, is our almost complete dependency on fossil fuels (liquid and gaseous) for our domestic and commercial energy needs. If we do not mitigate away from these – like quickly, we are in for a real hard time in perhaps a decade or so.
So far, any effort to mitigate, is wrapped up in political spin and persistent demands from some in the energy industry (or should that be the taxpayer-looting squad!) for ‘incentives’. Its too sad to contemplate.
But when folk (anywhere) have to ration energy use. Then see what happens! Bad stuff!
Tony, Brian,
sorry for the delayed reply. Yesterday night I had here a 4 hour cutoff from the internet, also on the cell phone from another provider, so it was not a provider issue. Interesting.
Brian, you didn’t say that. I just felt some significant bewondering, more from others than you, and I would write this differently today. But it is also just a blog comment, and not a scientific paper, and your comment makes me happy, that this comment irked you. Good feedback for me.
Same thing, why I asked back on a comment from John Gallaher, a week ago, where I sensed that I am missing something.
Flood / cost / risk / granularity
We had this pretty big flood here begin of June 2013, I left a few words about. And knowing that this is a good real world example for the risk considerations, I wondered what I write. I had problems with one of my hands, and this weekend was the first I could do extended bike trips to both Pirna and Meissen, both 800 year old cities 39 and 28 k large, both again hid hard in the flood, because they are close to the Elbe at places, where you can not really do that much to radically prevent it.
They must have had this for all of the 800 years, or something with the climate must have really changed in the last 200 years. But I had looked at and taken pictures of at least 2 dozen steles with flood marks, and the earliest signs were from 1780. It doesn’t take an advanced physics degree to paint a mark line and year number, and this is important information.
And I had thought about it, and looked further, and thought again, and yesterday I found a calibrated mark for 1655 in Pirna, and today one for 1501 in Meissen, and 2 others before 1780, pretty much at the place of my last hope, at a Stele, but on the backside, at the house of a Jewish trader, murdered with his wife in 1942, as shown in a memento of their 4 surviving children. Next week I am digging into their archive, with the family name and the “Gasse”.
And we know about the wiki/St._Mary_Magdalene’s_flood, in 1342, possibly triggering the plague
Those floods have been there all the time, and these people were not stupid to settle there, because until 1860 with the railways spreading, rivers were the main transportation routes, and every meter further away from the river was additional cost and lost opportunity.
Beyond that, at least 95% of the shops on the ground floor are operating again, and most of the remaining closed with signs “will open on x.th November”, an estimated 1% with fate not on open display.
Just 2 days after the flood I had seen all the people hammering away at the wet dirty plaster. Nobody had the slightest doubt that the cities will continue as before in full size as before. People were not laid off, just some Kurzarbeit, the cost for Germany actually seems to come in at just 6 instead of the budget maximum of 8 billions.
And we can estimate what a 1000 year flood would look like, 10 – 20 dead, 20 – 50 billion cost, a one knock of <2% GDP, and without the slightest doubt that as soon as the water has receded, people go back to their houses, hammer away the wet dirty plaster in the ground floor …
And they will not the slightest doubt that their cities, businesses will be reborn and meet the same demand as before. No fear.
The better protected / protectable Dresden here, we had 36 hour warning, tens of thousands of citizens were lining up to first fill the sandbags, put up the metal defenses, building and holding the sandbag dams, some up to 6 meter high. Without any official ordering, just by themselves. 3 hours after starting to built the dams, the first sausage grills and beer keg stands went up, and people enjoyed without any fear the sense of one city, one nation, indivisible, solidaric, resourceful, with a 500 million people hinterland being brought to lean in as needed.
No looting, no violence, no curfew, no dead people. It took me, from 1.5 km away at least 6 attempts, to react to some internet postings, to put my hands on one sand bag, because it was always done before I came to it.
Why do I write this here in all this detail? Because I want to compare this to
a) the lower 9th ward in New Orleans, 8 years later still repopulated only by 15%, curfew, martial law, peoples shot. Rebuilding your shop there would have been economic suicide.
b) Fukushima
They have cleared a 30 km Radius, probably forever, possibly more. About 200 k people, times 8 x GDP per Capita of 40k, makes about 60 b, and counting, the sea is more and more contaminated, gump, and after 3 miles island, czernobyl, this is now the 3rd case, the argument of singular cases of some crazy ivan are wearing increasingly thin.
How many Irish martyrs would walk into a burning French nuke reactor in your place?
If one of the French nuke plants would go off, hundreds of millions of people would live in fear. And you would have huge social conflicts between those, who say, it was just one, somewhere else, and those who say, but what if we here would be next.
I was somewhat lengthy with this here, but
a) it gives me more confidence,that my careful approach of collecting evidence, being irked, thinking, hypothesis, prediction, and then finding the missing links, is successful and made me pretty happy today, AND
b) because it helps to describe, what I am going to say next.
Brian,
we have total agreement, that a very safe supply of energy AND at a reasonable price are absolute priority.
@ francis: Very interesting post, contrasting the different reactions to major ‘natural’ disasters. New Orleans is a very difficult case to make sense of – except if you believe that there was a deliberate decision not to re-build parts of the city – for reasons which escape me, but must make ‘sense’ to someones. Baffling.
“We have total agreement, that a very safe supply of energy AND at a reasonable price are absolute priority.”
And may someone wish both you and I the best of good luck on that one!
Anyway, this is a bit away from the main point of this thread – our Budget, or looting the taxpayer, again. For what? To feed the interest machine? We pay 100 billion in tax revenue*; we spend 110 billion on education, health, social welfare, etc., etc. and 5 billion on interest payments. And everyone (well not all of us) think that borrowing 15 billion to make up the shortfall is sustainable – we will roll-over the existing debt next year – then borrow some more, and off we go again!
If this seems like a good definition of madness – then it is madness!
* Not the real amounts – just for illustration.
being a little bit on the rant tonight,
A few more thoughts with respect to energy.
Going down the Sun-Earth Moon Satellite, China, USA, Germany, Ireland scheme, hyper simplified
Neither the US or China give a sh** about carbon emissions by itself, both figured that the consequences will not really hurt them, at least in the short run
For the US, see Fankhauser 1995 “Valuing Climate Change”, the 200 year approach of Nordhaus 1973 BPEA is worth to note as well. I don’t read Chinese.
a) US have plenty of cheap coal at about 4 c, shale gas to tide over the next 10 years, and 12 carrier fleets.
b) China has the problem that burning their own coal (5c ?)produces so must particulate matter (PM), not because of CO2, or sulphur effectively filtered out, but because the nitro-oxygens then react with other stuff to PM. There was a study last year, putting the life expectancy reduction by that at 5 years, my take, after diving into details, is more 1 – 2 years, but that really hurts, in life quality.
Getting more energy with burning somewhat less coal is really important to them, and at a price sticker of 127 000 $ to a Chinese life, they will operate those nuc plants at a different point of tradeoff between price and risk as me or you would do, with us putting a 10x higher price sticker on life, 1 m Euro.
c) Germany has enough brown coal (5c), as a safety backup, and from my perspective a VERY reliable Russian gas supply 4-6c). They would finger with that just one time, and with North stream we removed any doubt or possible blackmail from some little polish Sikorsky twit or others.
And the will and the muscle and the technological competence to push long term large scale changes.
That is 10.7 Eurocents inflation protected for 35 years, and a wonderful FR, UK, China, Areva mélange , when things would go bad. A similar deal for Ireland would be 13 c, with the links, more risk addon.
Something you would have to contemplate for security, but certainly deadly to any energy intensive industry.
@ Tony, Brian, all
I just want to give back, that your comments are very worthful for me, and I did think a lot about them over the weekend.
if you compare their numbers for PM2.5 of 500, that would be about 2x = 1000 for PM10, for which we fret in Europe at levels of 50, to shut down streets.
Visibility of below 100 meter, compared to 100 kilo meter on a good day in Munich (presently 30), roughly proportional to PM numbers.
They have no choice, they must built nuc, now, fast. Damn the risk.
but over worked engineers make mistakes.
Perhaps now is the time to flag a future increase in stamp duty, say 0.5% per year for the next 6 years.
139 replies on “Budget 2014”
Only three categories of people have experienced austerity in the past 5 years: 1) the poor, 2) the unemployed, 3) the public sector. Budget 2014 looks set to continue the trend what with decreases in Jobseeker’s Allowance for the young. You know: as an extra disincentive to being unable to find work. But the important thing is that the Range Rover set be allowed to carry on in the style to which they’ve become accustomed.
http://www.independent.ie/opinion/columnists/stephen-kinsella/free-gp-care-for-children-shows-politicians-have-learned-nothing-29659635.html
Austerity porn
Ahead of the inevitable clobbering we are about to receive from MH today it’s nice to see we are still the star pupil…
http://www.bloomberg.com/news/2013-10-14/euro-crisis-tentative-victory-aired-as-irish-market-return-nears.html
Btw, free care for children who mostly don’t need it..the IMO has it right?
“The choice of the adjustment figure for Budget 2014 has therefore been a difficult balancing act. The more important point is that the broader crisis-resolution strategy remains in place and is working. ”
The most obvious question that arises, and which has arisen for some considerable time, is who exactly is the adjustment ‘working’ for?
Unless you or your business are fortunate enough to be in a postion to duck and dive the last 6 budgets I simply don’t see how the adjustment “works”. In almost every respect the adjustment has been detremental to the economy.
The basic flaw in John’s article is that the debt default option which he claims was avoided, is in fact untrue, we have defaulted, but this default has in fact been felt not through the normal route. The difference on this occasion is that the burden of non repayment has not fallen where is ought to have i.e. on the bank and country lenders but rather on the citizens. The citizens have been defaulted on and in my view will continue to be defaulted upon for a lot longer than John imagines.
If the belief is that the adjustment has indeed ‘worked’ then John sits in a very warped world, where relief is expresed all round because a hedge fund in Singapore gets paid in full plus interest for its Ireland Inc. investment but the bill for such is perhaps passed to Johns neighbours care assistant. Weird indeed.
@ Ernie
part 2, “the unemployed”. That section would mostly have come from the private sector, yes? Private sector doesn’t do austerity (ie reduction of pay), it does complete eradication (ie ending of employment).
So please don’t make out that the private sector has not suffered during this crisis. If the public sector had considered actual job losses (natural wastage and generous severance schemes don’t really count), pay levels (or similar changes) wouldn’t have had to be as large.
Much of the budget seems to have been leaked already, measures including:
The Mortgage Interest Supplement, an emergency measure for those struggling to pay interest, closed to new entrants from Jan
DIRT tax on savings to rise to 41%, up from 33% – It’ll bring about €95m in for the government
The death grant of €850 to help families with funeral costs is to be abolished
Over 30k pensioners over 70 to lose full medical cards and be placed on GP only cards.
The prescription charge is expected to increase from €1.50 to €2.50
The pensioners telephone allowance of €114 per year is to be abolished
The tobacco licence for retailers is to increase from €50 a year to €500 a year
All maternity benefit to be standardised at €230 a week. A fall of €32 per week for most working women.
No sick benefit for the first 6 days of illness (up from 3 days)
@BEB
I never said that the private sector hasn’t suffered. What I said was that the private sector hasn’t been asked to sacrifice.
Your view (which I hear all the time, usually in shrill tones: “redundancy is a 100% paycut!”) confuses the problem and the solution to the problem. Unemployment is part of the economic problem that our society has to try to solve. The suffering of the unemployed doesn’t do anything to help the society: rather it requires the rest of society to do something to remedy it. As yet, those in the private sector who have not lost their jobs (i.e., the vast majority) have not been asked to contribute much in the way of anything to help the state and this budget continues with that. Instead, throughout the last 5 years, almost the entire burden has been placed on the poor, the sick and those who happen to work in the public sector. This is indisputable.
Addendum: losing one’s job isn’t “experiencing austerity.” Austerity is something governments do as a matter of policy.
Are you getting on your high horse because you own a Range Rover Mr. Bond?? 🙂
This is a very official type piece that surely wouldn’t ruffle any feathers where it should.
I don’t believe in being controversial for the sake of it but unlike the early 1990s in Sweden and Finland, the Irish crisis has spurred no significant change.
The opportunity has passed and it’s not a fluke that Finland heads the world both in the student PISA and its equivalent for adults.
Even in enterprise policy, current ministers are like clones of predecessors, much better at making announcements than getting durable results.
It should be strange that at a time of high youth unemployment, that Ireland has the worst apprenticeship system in Western Europe (what it has is the traditional male dominated system with participation at a quarter of progressive countries) but it isn’t strange.
Peter Cunningham, the writer, sums up the conservative sclerosis well, in the FT today:
The abolition of pay-related Maternity Benefit (if it happens) means that the only remaining welfare payment linked to former wages will become flat-rated.
“DIRT at 41%” – I wonder will this mean that it is withheld at 41%, and then it’s up to the saver to claim back the overpaid DIRT, depending on other income?
At the moment, if you have no wage income, just interest income, you aren’t allowed the usual tax credits, and so you will pay DIRT.
Ernie,
Relax, you still have one of the best paid part time jobs around. You are probably still paid 2x a Greek professor, have absolute job security & get away lecturing in humanities. The only cushier status in life is in the Seanad or on the board of a state owned bank.
Over 70s medical card – this was originally automatic, not means-tested. When a generous means-test was introduced (700pw/1400pw), there was no way to identify who was eligible or not. So, AFAIK, there was no way to take the med cards off those earning above the limits.
Now maybe med cards are re-assessed every few years, I think so.
@Ernie Ball
The public sector has been asked to sacrafice comparatively to what? Compared to what they gained from the artificial boom in the first place? Compared to what their equivalents in the rest of the EU are earning?
It is not is dispute the public sector enjoyed windfall gains as a result of Berties vote gathering love-ins otherwise known as “benchmarking”. This BM party that was embraced with such ghusto by the public sector rarely gets a mention now and the partial clawback of those gains in recent years has been conveniently get catogorised/spun as “sacrifice”.
Have to agree with Michael Hennigan here. Nothing changed because nothing was challenged over the past 6 years.
Where is the independent economic analysis? How come the budget cuts are not being discussed in the media by people who actually know about economic policy? The public are being educated on this solely by politicians and journalists.
Maybe we’d be better off if we had independent economists from Finland, Sweden, Denmark and Germany discussing our budgets critically.
Articles like this are of little help, unless John’s job is to help us take our bitter medicine! How can anybody argue that cuts of €2.5bn could possibly be the basis of real and sustained economic growth?
Heck – if you were speaking generally, you could argue that a once-off cut of €2.5bn could lead to a negative growth spiral that would take years to settle. It’s more than just a blip but somehow this kind of argument doesn’t apply to Ireland!
It’s obvious that the govt are more concerned about whether people will accept the cuts without protest than the implications of the cuts themselves and everyone can agree that the govt is over-consumed with survival and optics. Deciding on €2.5bn over €3.1bn cut has been spun as an act of generosity. Another master stroke.
There was some mention of CGT going from 33% to 20%, while DIRT goes to 41%. Some heavy handed tactic to get capital flowing into property again?
Of course we will emerge from this, but what kind of society will we have? They are creating a two tier system in welfare today – where new poor get a spoon while old poor get a ladle…just so FG can say they honoured an election promise when they ask us to re-elect them.
Universal, single payer health care survives in the long run only if it applies to everybody. That is everyone pays the monthly fee and everyone is entitled to service. In countries with universal health care any hint that a political party might impose restrictions ensures a political rout.
Ireland is a “special case” in that the people covered by Blue Cross feel they have arrived and to ensure their place on the hierarchy is secure they blow up the bridges behind them. I have been told by otherwise perfectly reasonable Irish people that you cannot have universal health care in Ireland because the doctors offices will be overwhelmed and the country will be bankrupted.
Service to all children under five in the present circumstances is blatant political opportunism. However, it is long overdue. What is also long overdue are monthly fees related to income for all “free” health care recipients.
We have a long way to go before we enter the ranks of well governed countries. By the way Irish children and adults are not particularly healthy, overweight is now as big a problem in Ireland as it is in Chicago. Add alcoholism to that and we have nothing to boast about.
MH,
I am afraid your writer has not seen the inside of a church for years. Very few go to mass these days. A village in the west of Ireland with 4 roads has no bank, no Sunday mass, no FF cumman any more & half the pubs have shut. Only the GAA survives. The old ways are dead but no new way has come to light.
@Kerchav
You forgot to mention that, unlike the first round, when benchmarking is done in reverse, it is done based on absolutely nothing other than the high-minded principle of “whatever we can get away with taking.” But your post is revelatory of the extent to which none of this is about justice or fairness. It’s about settling old scores.
It remains a fact that for those in private sector employment who have not lost their jobs and who don’t have family members with special needs, this crisis has barely affected their income.
@Kerchav
Oh, and by the way, even with benchmarking, PS pay did not keep pace with growth in GDP (or GNP) during the boom years.
The Anglican Church where all FT correspondents attend is one generation from disappearing with attendance estimated at 3%. A British Anglican going into an Irish Church with 60% attendance thinks it is overcrowded. German churches are also well attended both Catholic and Lutheran but you will have no difficulty getting a seat. Quebec, Canada is ground zero for the Catholic Church implosion, one priest for six churches, half the churches locked up, some demolished. The Quebec women revolted and a church without the support of women is a walking corpse. In English speaking North America women in their twenties and thirties are being turned off in large numbers even in Italian communities. The end is nigh. Heartland, fundamental America is where we were fifty years ago Dia agat, Dia agus Mhuire agat.
Good and bad in all situations. Good is that there is definitely some recovery. Bad is that banks aren’t in great nick.
Good too is that there is political clarity emerging. FG is now truly a party of the right (and quite far to the right too) which is fine, FF can stake out some territory on the centre left, SF are far left and Labour are just left behind having been sleepwalked into Ireland’s most right wing budget ever. If all parties pursue these positions then we will have a more mature democracy.
The programme is seen as a success in as much as yields have fallen on Irish long term sovereign debt and unemployment is slowly falling and GDP is no longer contracting. Yet would these things have happened without below market rate loans and the ECB’s “OMT” policy of financing countries that that meet their conditions?
I think the lesson is that cuts alone were not enough to stop a recession and that central funding is also necessary. There is a scant evidence of recovery yet, just a flat-lining economy.
“How come the budget cuts are not being discussed in the media by people who actually know about economic policy?”
Ask the media.
Eureka ,
I see you have got your green Faux Charvet Shirt back from the Oxfam shop . Always knew you were a soldier of destiny . Up Bertie .
@ Eureka
…it would lead people to believe that we have a political spectrum, but none of those parties have any credibility left and the Dail proceedings are…
We needed a new party or three to run in the last election, take a few seats, establish credibility/trust during this Dail, and then make big noises at the next election but we’ve been short sighted and for our sins, all eyes are on the likes of McDowell to lend his credibility.
No wonder young people are leaving jobs behind!
Ernie,
you think the PS salaries should’ve been that high, or maybe even higher, and should’ve kept pace with GDP (or GNP) during the biggest man made housing bubble in human history?
Meet someone from Electrical Engineering who specialised in Control Engineering and they may be able to explain something of Systems Theory and Feedback Loops to you. (It is harder mathematically, but unlike politicised Economics, it works).
@peadar
Don’t put words in my mouth. What I do think is that what Ireland spends on PS salaries was never particularly high relative to the size of its GDP/GNP. It still isn’t.
P.S. Laughable that you think the idea of a feedback loop requires an engineer…
P.P.S. All economics is politicised
Ernie,
Feedback loops are best explained via Control Engineering. It is a/the major area of the subject. Learn, don’t sneer.
“PS salaries was never particularly high relative to the size of its GDP/GNP”
Almost irrelevant observation in normal times, and highly dangerous comment entering & during the biggest housing bubble in human history, as it mis-leads thinking/ political pressure, towards justifying positive feedback loops leading to a highly dangerous unstable system. Better to sort out the cost of the capital item – the house – as the high cost of this is why the PS wants more money. And it would also help the ordinary workers in the private sector.
Just to make sure I have you right: you think that the crisis (the “unstable system”) was caused by PS salary giveaways/benchmarking?
Whether they should or should not have kept pace with GDP, the fact remains that virtually all of the adjustment (no matter what the servile press dutifully reports) has been on the expenditure side. Those making fat salaries in the private sector have, by and large, not been touched. This continues in the present budget.
There are going to be so many more recession budgets.
The lack of any sort of reform is testament to the limpet like nature of the political and governing class. The descendants of the useless hoors of the 1930s.
Ernie,
So it’s just my imagination then. The USC , excise hike, Dirt at 41%, Vat increase. It’s all a mirage.
Here’s a positive development as found in an extract from a document on Ireland’s International Tax Strategy released with the Budget:
@ All
I venture to suggest that the really striking aspect of the budget is the creaking and antiquated nature of the entire exercise.
The vast bulk of government spending is pre-determined and no progress will be made with regard to control of public expenditure in the long-term until this bulk of spending becomes the focus of transparent and evidence-based debate in the Dáil- the body constitutionally responsible – over the months leading up to the budget.
Equity should, of course, be the driving consideration.
http://www.irishtimes.com/news/politics/in-irish-budgets-some-are-more-equal-than-others-1.1559358
I would have no faith whatsoever in the Irish political class, lobbyists included, to bring about this radical change. But the financial strait jacket in which the country finds itself may force it to do so, notably the introduction of expenditure ceilings which are now legislatively the responsibility of individual ministers, at the insistence, needless to say, of the EU.
The notion being assiduously cultivated that “with one bound our heroine – Caitlín – will shortly be free” simply does not stand up to even cursory examination. The “meedja” will, however, be reacting in its usual manner and concentrating on the popular reaction and its impact on the political fortunes of those involved. It must be admitted, however, that Ireland does not seem to be exceptional in that regard.
@ Seamus Coffey
Probably the most significant of the budget actions widely leaked beforehand.
@ All
Extract from MOF’s speech!
“We have moved, in line with the new European arrangements, to an October Budget which should ensure we can achieve one key goal of Oireachtas committees: the examination of spending plans before the money has been spent. This should bring about a qualitative difference in our debate about spending over the next few years.”
A difference in the quality of the debate would be hard to measure as there has been, hitherto, no such debate and no such “goals” have ever been established AFAIK. However, the next step, a breakdown into categories of expenditure, and their allocation between committees of the Dáil, can hardly be avoided. Obfuscation will, however, continue to be, undoubtedly, the political order of the day.
Ernie,
A significant component of the crisis, yes. But not the only one.
And the PS high cost is a major reason why we lost economic sovereignty as – bear with me! – as if we did not need to borrow to pay the very large PS bill then we could have told the ECB and bondholders to get lost (even after the initial 2-year time-limited bank guarantee was up, i.e. no longer continue to guarantee the banks). (Maybe we should’ve then given the PS worker a free (extra) house instead of the high salary, as we told the ECB where to get off).
The ‘expenditure side’ was, and is still, huge, that is why there has been some adjustment. It should never have been let get out of control, but also PS worker cost-of-living should not have been let get out of control (mostly the cost of their home).
If a ‘fat cat’ makes a new widget and sells lots abroad then I’m happy that he can pay himself and his employees more and thereby pay more tax. (And we hit the high rate of tax here at a quarter of the level of the UK), (Also there’s a lot of risk, and many widget makers go bust and have little or no pension).
But the problem is when the ‘fat cat’ is rich because they just flipped houses, or cornered a section of the economy, or if they are part of a rentiér class. i.e. they actually earned nothing for the country, but managed to insert themselves in a parasitic position. This is a problem that still needs to be tackled, but it is a very small percentage of the number of private sector workers.
@Tull
Those increases are derisory and you know it. I know it because I also pay them.
But interesting that you include VAT, which is the one tax they chose to increase and that, not coincidentally, is the most regressive tax there is, followed by the USC which hits its top rate at earnings of €16,000
Again: fat cats have been untouched.
Ernie,
You should not be throwing stones . You are in fat cat territory on a university lecturer’s Terms and conditions.
Unlike , your hated private sector worker or business owner you have job security and a munificent pension scheme. Not bad for a part time sinecure in an average university.
Tull,
Don’t be personalising this against Ernie too much. We don’t know details, do we?
Ernie,
I also want to touch the ‘fat cats’, but mostly the ‘bad fat cats’ I mentioned above: when the ‘fat cat’ is rich because they just flipped houses, or cornered a section of the economy, or if they are part of a rentiér class. i.e. they actually earned nothing for the country, but managed to insert themselves in a parasitic position. This is a problem that still needs to be tackled.
But note again: it is a very small percentage of the number of private sector workers.
Otherwise I’d like to attract some more (foreign & Irish) intelligent ‘good fat cats’ to develop and make more widgets here, and get all that tax from them and their employees. I am afraid though, of secure public-sector employees screaming for higher taxes on well paid transient people which might make them go elsewhere. This is good for the PS employees as demand for things (houses etc.) goes down and the PS employees are relatively richer, and have higher self-esteem in the community as there are fewer better off than them, and there appears to be a stronger link again between general academic education and position in society.
But it is a short-sighted selfish approach, and bad for the country in the long term. That is not to say that we must not tax the ‘good fat cats’ properly, but we must do it sensibly, such that they don’t leave.
@tull
Yeah, that’s right: I work part-time. You haven’t got the slightest clue…
And I have a “munificent” pension, which makes me a creditor of the Irish state, however without the ironclad guarantees that, say, Anglo bondholders get.
But as for being in glass houses (and despite your best efforts to personalise the matter), this is not about me. It’s about justice. And the fact is that this government, like the one before, have repeatedly gone after certain sectors (the poor, the public sector, the infirm) while leaving rich fat cats (including, I gather, one tull mcadoo) untouched.
Here’s one of no less than 25 itsy-bitsy ‘job creation’ measures. The scheme for home renovations offers a 13.5% rebate over the two subsequent years for jobs costing €5,000 to €30,000.
Currently Bob the Builder agrees to waive VAT on a €10,000 renovation. Cost is €10,000 to Joan the Householder and Bob takes his chances with the Revenue.
Under the new scheme, cost is €11,350, Bob can pay his VAT but Joan has to fill in forms and wait two years to get her €1,350 back.
This scheme is clearly designed to keep compliant small builders competitive with folks who waive the VAT. But there is no incentive whatsoever for Joan to tag along. Am I missing something?
@ Ernie,
Yes they have gone after some of those, but the PS are not all innocent angels. The non-lower grade PS were on enormous salaries compared to the rest of the (old) EU and compared to the private sector. Instead of reducing the cost of housing for everyone, the Government (of the day) listened to the special pleading of their employees. This added to the bubble, and completely knackered the ordinary private-sector employee (they’re not all Bill Gates), and in fairness to most PS employees all they wanted was to be able to afford a home like their parents. but the way they went about it with the Government, along with the banks & developers, ruined the country.
Bringing salaries to some sort of average level is needed, and still hasn’t been achieved in many areas. The President gets twice what the Finnish President gets, and so on down the scale.
A friend finishing his PhD a few years ago (before the crash) was looking for some temporary clerical work and he said the conditions seemed to be about 50% better then in the PS…so while the lower grade PS workers don’t get a lot, their Private sector peers get even less.
The infirm & poor would not need to be approached if Labour were not protecting the other Right Wing in this country – the well paid PS worker.
re: fat cats, I refer you to my earlier post. Yes, tax the good ones cleverly, and just get rid of the parasitic bad fat cats.
As I have just seen the headlines, may I draw attention to the one cut that is particularly nasty and will affect hundreds of thousands of workers, virtually all low paid private sectors.
Insured private sectors workers are effectively no longer insured for the fist six days of any illness. Many of these people will get no pay during that period.
The change of course will not affect the officer class. They get paid, whether at work, or not.
Did I also hear the .6% pension levy, again virtually exclusively private sector, is to be increased to .75%.
The maternity benefit cut will also primarily affect private sector workers.
It must be a great relief, and it must take very very tough decisions for policy makers, to make cuts and collect taxes from which they themselves are exempt.
The government has succeeded in opening up clear blue water, between the marginal private sector workers, and the cossetted sectors that are part of and that they look after so well.
@ CMc
No!
Of course, this may be an episode of Morecambe and Wise rather than a sane budgetary process.
@ All
To more serious matters!
http://www.ft.com/intl/cms/s/0/8a4eb77c-35ba-11e3-b539-00144feab7de.html?siteedition=intl#axzz2haaILnsX
@ All
Also not to be lost sight off, the commitments entered into by Ireland in the matter of “fiscal transparency”.
http://www.finance.gov.ie/viewdoc.asp?DocID=7737
To control the budgetary process, the very minimum requirement is to get on top of the accounting necessities to enable one do so.
@DOCM,the SEC just closed an investigation in which questions relating to…
“Your responses state that your Irish subsidiaries generated substantially all of your $40.4 billion in undistributed international earnings, creating a tax benefit of approximately $5.9 billion in 2012,” the SEC said. “Thus, it appears that you should specifically reference the potential risks associated with any changes in Irish tax laws.”
http://www.latimes.com/business/technology/la-fi-tn-apple-reveals-sec-review-of-irish-tax-disclosures-20131003,0,7138891.story
@ JG
Does that materially change the situation?
The international tax dance continues, the important point for each of the players being neither to get ahead of the music nor be left behind it.
@DOCM,the SEC ‘asked’ Apple if there as any ‘risk’ of legislative changes imminent,the answer was NO…shortly after the ‘paddies’ move the goalposts 🙂
Be thank full the PS sector is not at least…
“PANGAIO, Greece—A local treasury employee in this mountain community shot the mayor with an Uzi submachine gun in late 2009, in the grisly conclusion to a suspected embezzlement scheme.
Nearly three years after he was convicted of murder and sentenced to life in prison, Savvas Saltouridis remains on the municipal payroll.”
http://online.wsj.com/article/SB10001424052702304526204579097150213981632.html
‘catalytic finance’!
Methinks a catalyst goes in and out as same; not the case with ours as every odious cent has to be paid back: ‘catastrophic finance’ more like.
@ CMc
I paid our plumber €600 cash about two months ago. Similarly €550 to the guy who put up a new satellite dish and saorview aerial and rewired all my TV points in the house. I bought some DIY supplies recently in two businesses where I live and both refused to take a credit card or laser saying they didn’t have the machines so I was forced to pay cash. I’m deeply conflicted about this. On the one hand I’m firmly in the PAYE sector and can’t avoid a cent in tax and badly want to report these guys. On the other hand I feel I’m getting a bargain (rightly or wrongly) and something in me stops me reporting them. Perhaps if there was a confidential Revenue phone line I might consider using it so that I could report these people. If this new Budget scheme was backed up by more action against the black economy it could be good but, you are right, as it presently stands there’s no incentive to participate in the scheme if you want work done around the house and particularly if you’re getting it done in dribs and drabs.
Ernie,
Everybody who has ever gone through an NUI undergraduate humanities degree will be familiar with the over worked lecturer with a handful of classroom hours, 3 months off and reproducing the same research paper every year or two. For that they receive more than that other great part time job – the Senator- for roughly the same contribution to society. You wail against the unfairness of it all. And you are right, it is unfair. You are massively overpaid relative to say a Greek academic. You are a rentier in Irish society.
Jos. Ryan,
Well spotted. This is another sneaky assault on the pockets of the private sector to pay for the still inflated T&Cs of the officer class in the public sector. There are some good things. Funding a universal GP care benefit through reducing the perks of rich pensioners is a step forward.
http://budget.gov.ie/Budgets/2014/2014.aspx
Expenditure report 2014
Part 1- Expenditure Strategy:
Table 1 (page11 on the doc) gives a good summary of the changing pattern of expenditure over the period 2007-2014.
Cartoon of the Day
Ireland:
Some relief
15 October 2013 The Irish Times Dublin
http://www.presseurop.eu/en/content/cartoon/4236111-some-relief
Am I correct in saying that PRSI is being extended to all earnings ?
@ Tull
Like the FF reference – suppose I asked for it. But it’s not true.
My values evolve but simply put are:
Free education to LC
Free health care to all
A dole that tapers to 80% 60% 40% 20% the longer people are on it
And the german system os state supplementing low wages through welfare payments (which incidentally is state aid but something the Germans can get away with)
off topic
John Gallaher,
http://www.washingtonpost.com/blogs/post-politics/wp/2013/10/14/as-democrats-seethe-over-gop-tactics-video-over-rules-change-goes-viral/?tid=pm_pop
who do think is going to win this budget tomorrow? How?
@ Joseph Ryan
Re : Pension levy
My understanding is the 0.6% will end on the last day of 2014.
For 2015 it will be replaced by a new levy of 0.15%.
Once a politician gets their paws on a slush fund its hard to let it go!!!
@tull
Uh, things have obviously changed quite a bit since your university days back in the Stone Age.
As for the “rentier” charge: yeah, yeah what need has anyone of education in the humanities? Parasites all, n’est-ce pas, Monsieur Gradgrind?
@francis,who the f**k knows its NOT fun anymore no way.
good live feed here no paywall i hope.
http://stream.wsj.com/story/the-fiscal-cliff/SS-2-87944/
Eureka,
I was hoping that there was another soldier out there.
Ernie,
Exactly, what need of the 3rd first year subject delivered by a lecturer you don’t like and who clearly has no respect for you. Still it keep some people off the street and in secure employment.
Sporthog:
Sadly the pension levy will be 0.75% in 2014.
But there is good news – unfunded pension schemes are exempt! The logic is straightforward – if you are 100% underfunded, as against 30% or 40%, that’s fine.
Colm,
Hmmm, what are you getting at. Name one scheme that is 100% unfounded. Ahh, yes, I see.
@Tull
Thanks for the rentier laugh, you class warrior. Is Ernie also an imperialist lapdog by any chance?
Seafooid,
More of a running dog, public sector officer class, Kulak and probably an excellent pool player to boot.
@sporthog
Colm McCarthy is correct. The pension levy goes to .75% in 2014.
A wealth tax for people unfortunate enough not to be part of an unfunded pension scheme, or people unfortunate enough not to work in a bank, where the State will happily top up any underfunding with a billion or two, as you head off into the evening sunshine in your late fifties.
I am not clear on the PRSI cange you mention, but such a move has been flagged.
It appears to me that taxing Savings was not well thought out. The interest rate earned is close to the rate of inflation. Then that puny return is taxed which means the return is less than the rate of inflation. The rational response is to put it under the mattress or get it out to a tax haven.
Then we have our banks which are not lending to SMEs’, now that the disincentive to deposit savings in banks has increased does the government think the banks will take in more deposits so as they can lend more to SMEs’. Only in Ireland, a pity.
Some countries have addressed the low rate of deposit interest by introducing individual Tax Free Savings Accounts whereby individuals can deposit up to 5,000 to 10,000 per year into a single account per individual globally confined to domestic banks. I expect to see the Irish gov’t bumping against the hard wall of reality and using something similar to address what will be a serious problem for banks.
Another policy done over a few pints by the bis’ and it shows.
I see they read the IMF tax paper on VAT gaps.
Hope springs eternal.
@MickeyHickey,perhaps that’s the intention get them out there spending and shopping,investing.Maybe,someone has a link but I think people have been retiring debt and saving,could be wrong.My nerves are a bit frayed,is the US gonna default,inconceivable!
Heard it was packed today,jammers 90% success rate,no problem the market absorbing w/o significant price dislocation significant amount off D4 repo BTL’s.
http://www.allsopspace.ie/auction/past
Given,that “savings” potentially could be converted to equity,I would be cautious bout having too much saved/invested in domestic irish banks…..
The full budget document is here:
http://budget.gov.ie/Budgets/2014/Documents/Budget%202014%20composite.pdf
Plus supporting material:
http://budget.gov.ie/Budgets/2014/2014.aspx
It does seem a bit odd that a man with 3 public pensions is abolishing a levy on banjaxed private pensions as promised while introducing a new one to provide for contingencies.
In 2009, the €1bn shortfall in the university and FAS funds was sort of magiced away by transferring them to the NTMA to be rolled into the pensions fund.
No levies there of course and when a giant and profitable Swedish multinational decided to close the Irish scheme that I had been a member of, when the good times ended, the doormat State had no rules to protect citizens and others.
Just on rules, claimed transparency and other fairytales:
Ireland’s new International Tax Charter: More political kabuki
@ Tullmcadoo
I did think that 84% attending mass seemed a bit high – maybe not in the country where farmers may pray for rain or sunshine or wonder how much they have to pay for spuds at the local Tesco.
There was a chart in the FT a while ago that showed the development of sov debt for the piggies since austerity began . All rose .
There is no interest in growth. It is all countercyclical. Cut and repeat.
There is enough money in the EZ to cover the losses
But beggar my neighbour and bugger the unemployed is the system. It is all about procrastination.
Draghi will do “whatever it takes.” Sometime.
@ jg: “My nerves are a bit frayed, is the US gonna default, inconceivable!”
Relax john: Tax revenues are multiples of the liabilities. Interest payments on debt are fully secure. How-and-ever, its the domestic spending programmes that face the chop (or a least a cap on spending) if the Debt Ceiling ain’t raised. Watch the reps and senators from districts and states with lots of defense stuff. They will not buckle.
Harvested the last of my winter turf yesterday. P*ssing from the heavens at the mo. Maybe I’ll get the day off!
The strange thing about these budgets is that no one ever wonders why the State was funding all this stuff in the first place. Communion grants? Bereavement grants? When I hear about this stuff I wonder what else is out there in the exotic world of social welfare. Can I get a grant to go for a few pints on Saturday?
@JF
Sure, who could anticipate dying? A shocking surprise like that needs some state support.
Overall verdict on Budget 2014: Move along now, nothing to see here.
@JF
Who cares? You dont think youre always going to find minute, irrelevant expenditures you disagree with in any system?
Being a big boy is learning to live with the fact that you cant shape the world in your image, rather than whine incessantly about it
re Bereavement grants – What do you expect the broke to do with their dead, throw them in a ditch?
@ Johnny Foreigner
Politicians like to be generous with other people’s money.
Remember the beggars on horseback during the bubble?
In Denmark a former PM has been criticised for first class travel on behalf of a publicly funded institute.
The Politiken daily says:
Imagine tap water at Dublin Castle?
The airline industry would be in trouble absent all these freeloaders.
On non-first class welfare, my sister worked in housing at Cork City Hall and people would come in to abuse staff that the delivery men didn’t unwrap the new fridge or that some item like a free washing machine needs to be repaired.
Half the population is officially on welfare but lots more are dependent on public funds.
Half of Ireland’s population on welfare
On bereavement, people with no money will be helped as there isn’t a choice.
@rf
“What do you expect the broke to do with their dead, throw them in a ditch?”
In a sentence you have perfectly captured the depraved nature of the Statist mentality. Even when dealing with the most eternal and universal facts of human life you can’t get your head around anything other than Big Brother wading in to sort things out.
Graveyards are the last libertarian outpost in Ireland?
@rf
If you have been enslaved all your life by welfarist patronage then the graveyard is the last outpost of dignity at least.
@BW,Snr looks like you all set then,fuel and heat and the garden…
The markets are expecting a deal but then again no one seriously considered CH 11 was a likely outcome for Lehman,going to be a very interesting day.First thing here,how has the reaction been overall,looks like the oul bait and switch worked,in that 3Bil was originally mooted.
Is the intention to encourage emigration?
http://www.politico.com/story/2013/10/economy-markets-government-shutdown-debt-ceiling-congres-deal-98379.html?hp=t1_3
@JF,has cremation caught on over there it’s a cheaper option…a bit like communions I never got the extravagance,pomp and ceremony involved.Its supposed to be a solemn religious ceremony not a p**s up.
“The average cost of cremation is a fraction of funeral and burial costs in any market, less than a quarter of the $10,000+ cost of an average funeral and burial. With cremation, there is no need to embalm or to purchase a cemetery plot, casket, burial vault, or gravestone. Many families choosing cremation forego a traditional funeral in place of a memorial service or family gathering. Another way to lower cremation cost is to preplan and prepay for cremation to lock in today’s price.”
http://www.neptunesociety.com/cremation-costs
@JG
Funerals would be a lot cheaper if the Government wasn’t inflating the price by giving out bereavement grants. All these grants and supplements and allowances aren’t there for the welfare recipients, they are there for the rent seeking landlord types who thrive on the back of them.
Meanwhile, in the UK (dole = £56.80 a week) new record levels of employment recorded, and the dole claimant count is falling rapidly.
http://www.ons.gov.uk/ons/dcp171778_327398.pdf
The Bereavement Grant is little more than a subsidy to undertakers who in rural Ireland often double up as publicans/grocers and life insurance salesmen. More than a few go into politics. Remember the slogan of John Malony TD for Laois-Offaly “the last man to let you down”.
@Tull
+1
To a Statist all this circular money churning counts as economic activity. Put 10 cents on the pint, put the all the extra VAT into a big pot, pay out the dole from the big pot, use the dole to buy some pints. Hey presto – GDP!
@ Colm McCarthy+ Joesph Ryan,
Many thanks for the clarification, dear oh dear, worse than I thought!! It is galling to hear FG talk about “their plan is Working” yet it’s money stolen from private pensions which is being used to fund these employment schemes.
@JF i noticed the govt. is ending and or phasing out mortgage interest supplement,another housing market subsidy.Why do they consistently involve themselves in the housing/rental market,if ya cant pay your mortgage interest,WTF is the govt. doing paying it ?
@JG
Still plenty of welfare for the insiders in this lovely little country.
http://www.revenue.ie/en/tax/it/leaflets/flat-rate-expenses.xls
Gives you an insight into who really counts in this country. Search for ‘third level academics’.
@JF thanks for that,great auction yesterday,sellers must be delighted but given the dearth of inventory due to inaction by the gov. and CB,there may have been many,very frustrated potential buyers.The canard that repos/foreclosures will depress the market further is simply nonsense.Housing markets in the US that had non judicial foreclosure and tackled the issues head on recovered quickest.
http://www.irishtimes.com/business/sectors/commercial-property/allsop-auction-sells-93-properties-for-11-2m-1.1562028
Not sure if WSJ blog above is behind paywall,heres the WP live blog-we may have a deal phew!
http://www.washingtonpost.com/blogs/post-politics/
@John Gallaher
Irish savers of a certain maturity. I had an aunt who lived on a farm worth 2 million+ bought in the dirty thirties with money made in the Buffalo, NY hooch market. She lived so frugally that my brother used to take her groceries and turf. When she died she had Euro 60,000 in a savings account in the local bank. She was born and educated beyond high school in Buffalo. She then returned to live with her parents. A well read, intelligent, good looking, personable woman, never married.
The Irish are a different breed and as they push into their sixties and beyond they put their money where it is safe and they see savings in Irish banks as being safe. Not alone do they not spend but they cut back on the necessities of life. Good luck with trying to get Irish savers to spend.
@JF
Is that supposed to be a joke? Or is the fact of third-level academics getting €518 in flat-rate allowances supposed to be some kind of scandal and proof of a sinister cabal? If so, then by my reading of the table, the real Masters of the Universe are the members of the RTE Concert Orchestra.
@MickeyHickey,hi mickey so do you think the govt left a bit on the table…
they are a different breed indeed,not a word about this derisory performance,may as well put it under your bed safer…
they pursued a ‘shotgun’ or throw some muck at a wall hoping some it will sick strategy,with their US RE portfolio.
“The NPRF’s Discretionary Portfolio earned a preliminary return of -0.1 per cent in the second quarter of 2013 and +2.7 per cent year to date. Since the Fund’s inception in April 2001, the Discretionary Portfolio has delivered an annualised return of +3.8 per cent per annum”
http://www.nprf.ie/Publications/2013/SecondQuarter2013PerformancePortfolioUpdate.pdf
LOL,
I am presently watching some risk manager presentation on german renewables, and it is good that I am far away, because I would like to shake him, for all the gross nonsense and lack of understanding the real world.
“they see savings in Irish banks as being safe. Not alone do they not spend but they cut back on the necessities of life”
I know this crazy behavior, same here, but if anybody has a recipe against it, tell me!
@ francis
I suppose the problem is that the German Minister of Finance might come along and expropriate their savings.
@ All
FYI the Department of Pubic Expenditure and Reform circular on ministerial expenditure ceilings.
http://per.gov.ie/wp-content/uploads/Circular-15-13.pdf
To quote the Minister for PER (not the MOF as mistakenly by me above);
“We have moved, in line with the new European arrangements, to an October Budget which should ensure we can achieve one key goal of Oireachtas committees: the examination of spending plans before the money has been spent. This should bring about a qualitative difference in our debate about spending over the next few years.”
Can anyone spot the role allocated to the Oireachtas (in reality solely Dáil) committees in the circular?
By way of contrast, how Sweden tackled a much less serious financial and budgetary crisis (US academic blog posts culled from the Web).
http://www.economonitor.com/dolanecon/2011/07/31/how-smart-fiscal-rules-keep-swedens-budget-in-balance/
At least the first forced tentative steps are being taken in the direction of real reform the sine qua non for which is a basic element of cross-party consensus. Not alone is this lacking but there is a near total lack of awareness at all levels of the need for it.
Either it is found or a decade of a stagnant continued truncated version of the economic status quo is unavoidable.
Le canard enchaine, the French satirical magazine has a cartoon this week that starts
“Avant c’etait les 30 glorieuses, aujourd’hui c’est les 30 merdeuses”
Before, we had the 30 glorious years (of postwar keynesianism) ; today we have the 30 sh*t years….
Gavin,
“expropriate their savings.” beyond the effective 2.5% per anno by now?
(not me, just to be clear, my assets develop nicely, 14% yoy raw to avoid even nicer numbers : – )
Shall we organize mass executions for “financial-illiteracy” ? or what do you have in mind?
@ francis
Cyprus.
lol just watching the local saxonian mdr.de / völkerschlacht
and the pickering about how many groschen for french soldiers to be suffered in their house
this is a pretty interesting new format for 200 year old stuff
@ Gavin
Cyprus median household wealth was 10x MY PEOPLE (eastern german )
@ Francis
Please, for the love of god, stop quoting that idiotic and extremely flawed ECB household wealth study. Repeating it’s flawed and politically motivated findings only makes you out does not help your cause.
@ Bond. Eoin Bond , all
I am all ear for your specific documented allegations against this study.
Until then these are the official data.
@ All
Miriam Lord nails it! The budget of “bits and bobs” departs stage left, and right, at a rapid pace; and fails to enter history.
http://www.irishtimes.com/news/politics/budget-of-bits-and-bobs-fails-to-outrage-or-astound-1.1561995?page=1
not so really off topic
@ John Gallaher
what is your latest take at the US deal tonight?
@francis,hi francis relief,shock it came so close,sadness over the GOP…
Actually at a function,my posts after some grog tend to be tiresome to say the least so will sign off.
In fairness haven’t really reviewed it in detail,just following CNBC,will watch Charlie Rose later.
But will leave you with this:)
“Germany is trying to save the world. Most countries are caught in a cycle of obfuscation, blaming others for climate change while making insufficient efforts to lower greenhouse-gas emissions (GHGs) by the 80% needed to prevent the worst effects of climate change. Germany, by contrast, is making tremendous efforts to prove that this is actually possible, targeting a whopping 95% reduction from 1990 levels by 2050 (WSJ, 2013). Alas, the country’s plan is flawed and may end in failure.”
http://ssppjournal.blogspot.com
@ Mickey
I still own stock in nuc companies. I looked today for the first time, that I lost 60% on that after our post fukushima decision. I never cared.
Having social consensus and my people sleep well is way more important.
@ John G,
we know that it is a long hard slug.
“One problem is that Germany is a dark, cloudy country, hardly the most favorable terrain for solar energy. As one energy company executive put it, “Photovoltaic [energy] in Germany makes as much sense as growing pineapples in Alaska”
and we very much hope that others will join us along the way.
Many for whom that would be a whole lot cheaper.
The 150 b we had to pour into driving PV costs downs are just the beginning. The next 200 b will go into driving overnight storage cost down, and then for a week, a month, a year.
At the end is the Promised Land. I will not get there with you.
100% renewable, resilient, robust, not being dependent on any idiot somewhere else, not threatening anybody, and free to adapt for everybody else, our vision.
But on the way to that, I will have a very sharp eye on the costs, and not tolerate any sub optimal phantasies, exploitation by rent seekers, and you can guess the rest. “Not one cent” is the battle cry of the working man.
Jim Flaherty Minister of Finance in today’s speech from the throne in Ottawa promises to outlaw deficits permanently.
5. Deficits will be illegal
The government will bring in a balanced budget law, one that will require “balanced budgets during normal economic times, and concrete timelines for returning to balance in the event of an economic crisis,” the speech says. The government also renewed a pledge to balance the budget by 2015, and return the debt-to-GDP ratio to pre-recession levels by 2017. Other provinces have anti-deficit laws on the books, but critics note that they’re frequently broken.
There are 26 points.
http://www.theglobeandmail.com/news/politics/highlights-from-harpers-throne-speech/article14890000/#dashboard/follows/
This we do not need. With the prospect of over 50,000 per year immigrating for the next few years we need to get our act together. I hope someone was arrested for this.
http://www.nytimes.com/2013/10/16/opinion/some-irish-need-not-apply.html?hp
@Gavin
There was an interesting quote from Dieselboom the weekend of the Cyprus heist. He said the main pE
@Gavin
There was an interesting quote from Dieselboom the weekend of the Cyprus heist. He said the main EZ players were all agreed on the need to shrink the banking sector. So whenever panic comes rolling around again PTSB might be of particular interest.
@ francis: “100% renewable, resilient, robust, not being dependent on any idiot somewhere else, not threatening anybody, and free to adapt for everybody else, our vision.”
Vision, francis? Maybe you are wearing some form of ‘corrective lenses’ in respect of re-usable energy sources? Those critters need liquid fossil fuels in all aspects of their deployment, else they go dark! Gas may get you some distance, coal will get you none. Whence the oil?
@Seafoid
re: Dieselboom on shrinking banking:
Here’s an idea. Why not get rid of banking altogether.
If the solution of every problem is to continue to ‘shrink’ the banking sector, then the ultimate solution is obvious. Get rid of banking altogether.
Or Dieselboom & Co to consult a shrink.
Debt Crisis:
Troika on the brink of implosion
16 October 2013 Mediapart Paris
Disagreements between the European Commission and the IMF on how to end the debt crisis in Europe continue to grow. Starting in Brussels, it is possible to envisage the careful dismantling of the group.
http://www.presseurop.eu/en/content/article/4240921-troika-brink-implosion
@MickeyHickey
One could begin by asking How do we treat Irish Travellers? Worth noting that 85% of extra Traveller education allowances cut in recent budgets. Long ways to cosmopolitan from here …
Ambrose reckons we have been shafted on the bank recapitalization deal…..
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10384297/Europes-debt-crisis-credibility-hangs-on-thin-Irish-thread.html
The Megan Green comment is worrying.
@ Fiat
Megan Greene’s comment would be worrying if she had actually called anything correctly in the Eurozone in the last few years. She’s got the vague stuff ok (weak economic growth, political/institutional problems), but the big stuff (Greece exit, more Periphery defaults/bailouts) more or less completely wrong. Most of her pronouncements generally involve a lack of hard data analysis and an “unless…” at the end as well.
oh dear this looks……
“A bank is suing estate agents Jones Lang LaSalle for some €17 million in damages over alleged “grossly” overvaluing St Patrick’s Athletic Football Club lands at Inchicore, Dublin, in October 2007 at €33 million, or up to €45 million if the lands were zoned residential and commercial.”
http://www.irishtimes.com/business/sectors/commercial-property/bank-sues-agent-over-33m-valuation-for-dublin-soccer-club-1.1563427
probably just a coincidence…
http://www.nama.ie/news/nama-announces-retirement-of-mr-john-mulcahy-board-member-and-head-of-asset-management/
@ Fiatluxjnr
There were 240,000 employed in construction at end Q2 2008: should the surplus have been made public sector employees?
The gap between collapsing revenues as the bubble bust and inflated bubble spending should have been paid for by Germany and on top of that it should have paid for the cost of the reckless banking including the bailout of Anglo depositors!!
As for the June 29, 2002 statement, it’s not crystal clear:
It could be argued that the restructuring of the Anglo PNs was consistent with the reference to the Irish financial sector.
The reality check here is that nobody of consequence promised to write a cheque for €64bn – maybe the Irish delegation mistook leprechauns or pink elephants for the real thing. Angela Merkel was the only person who could have made that promise.
It would be surely stupid to believe that she did.
@Bond Eoin Bond
Thanks.
A bit like Meredith Whitney….the muni bond market is still intact.
Still, 209 b gross or thereabouts is a lot of loot to refinance or repay even if some of it is of 30 yr duration.
@ Michael Hennigan
Once again, you’ve a lot to answer for. At one stage I used to be very impressed by announcements such as these: http://www.irishtimes.com/business/sectors/technology/university-of-limerick-unveils-52m-science-and-engineering-project-1.1564231
This is another project in pharmaceutical, biomedical, and energy sciences in which we’re going to be world class. And it’s only costing €75m.
Oops, correction: it’s creating 75 jobs and only costing €52m. It’s easy to get the numbers mixed up.
Debt crisis:
Irish exit into the unknown
17 October 2013 The Guardian London
After three years of public sector spending cuts, Ireland looks set to exit the EU-ECB-IMF bailout programme on December 15, but at what cost? The country remains mired in depression and the economy is now hollowed out.
http://www.presseurop.eu/en/content/article/4244501-irish-exit-unknown
@ All
Appropriate to this thread.
http://www.irishexaminer.com/budget/news/a-fairer-budgetary-process-is-required-246528.html
As the author points out, budgeting is a year round process. There is some evidence that the pressure of budgetary constraints is forcing recognition of this fact. Equality may even get a look in!
Picture This: Eid Mubarak
http://www.spiegel.de/international/a-928266.html#ref=nl-international
@ Elia
No worries!
The Irish Times reports: “It was a good day for jobs yesterday with the announcement of more than 340 new positions around the country.”
It counts the Limerick project as creating a total of 220 jobs.
There are plenty suckers for this jobs propaganda.
A construction firm like Sisk gets a new order. Who can tell from a spoofed-up press release that it will hire new staff when it begins the project?
The current spinners have embraced the routine of their predecessors by plucking indirect job figures from the air, for impact.
On a positive note, news overnight shows that Google Inc. posted a 12% rise in quarterly revenues.
The ESRI has predicted that computer services accounting for 40% of services exports will grow 7% in 2014. So at least with the positive trend, that magic target will likely be met. Only if it was as easy elsewhere!
@ All
I see the Dunphy-King spat has almost ranked with the Budget for media attention this week.
Noel King is a decent man who I worked with in the period after the dot.com bust when a soccer portal that a retired rich man had given more than 2m IEP to his son to build, was floundering.
A claimed altercation in 1978 has been mentioned. Whatever about that, Dunphy made his debut at RTE for the 1978 World Cup and on the night of the final that Argentina won, he had turned up in dark shades as his car had an altercation with a tree on the way home after one of the semi-finals.
@ all, P.Lane, Brian Woods, Robert
a) Germany is not crazy
b) marginal link European energy
c) Recent generation cost numbers
d) storage costs developments
e) Nudge things beyond a tipping point
f) Kerry Gold Butter
g) Opportunities for Ireland / Irish business
h) economics research opportunities
At first glance off topic, not related to your budget, but just to comments from others here
What I get from Brian Woods Snr, Robert in the other threat, and others, is that you apparently think we are just plain crazy with a our energiewende (How would Irish say that?, submariners call surprising 180 degree turns “crazy Ivan” : – )
And as you can read above, I am also still working on improving my faith in it : – )
But I want to give you the following arguments:
a) in the last 60 years we have not been that bad in managing several other things, wirtschaftswunder, OSCE, reunification, etc
b) interesting link
http://marginalrevolution.com/marginalrevolution/2013/10/european-energy-fact-of-the-day.html, with lots of links pointing from there
I especially like the “German, Swiss, Austrian agencies to work together to support pumped hydro storage”. In the D-A-CH countries we will double the capacity of hydro storage plants from 12 to 24 Gigawatt by 2020, hubbing this to about 33% of the average demand in this area, “all we need”, and we poured already on this reunification day 59% of renewables into the European grid, without crashing it, despite all those theoretical phase stability arguments.
c) Recent cost numbers
from this summer on, it is apparently possible in Germany to produce solar power profitable for 10 c/kWh for larger installations (see EEG wiki) total costs, and a yearly decay of real 2.0% (inflation of fixed nominal). For people with more sunlight, and enough space, there being able to use cheaper amorphous, it must be possible NOW, to produce for 5 c, making this competitive for fuel based generation.
Closer to the Equator, and therefore more (> 1.5x) and more balanced (> 2.0x) sunshine, the production profile (daily and yearly) more and more matches the consumption profile, and then they extend their coverage into the evening, at first with battery storage, simple car batteries, one hour, two hours …
A solar photovoltaic (PV) module, a little black box for some electronics, and some car batteries, this is something you can put into any African hamlet, no moving parts, no maintenance, no engineer needed. Should work in Ireland as well, …. Just some cheap teasing : – )
That will drive down cost for this storage simply by sheer economics of scale, without any German subsidizes, and of course not permanent, local battery recycling companies, etc.
For Germany, we can always have plants for own brown coal and Russian gas as hard winter backup, 5c production costs – 2 c fuel, makes about 3c per needed kWh as a backup, definitely affordable for us, especially since we will not need this for more than about 1/3 of the total volume
d) storage costs developments
I did recently a double checked calculation with a friend, that even a small localized car battery storage does not cost more than 1c/kWh per hour storage. Cut this in half for larger scale, now, another half for “in 5 years”.
And we have stable full day energy supply for many regions in the world. Relieving the pressure on global, especially carbon-fuel markets.
What we achieve with that here for our 1% german people fraction of the world, also benefits all mankind, without making anybody dependent on some mean patents, or dominating production scale.
e) Nudge things beyond a tipping point
To summarize the above, we see lots of opportunities to nudge economic developments beyond tipping points, where then the further economics of scale take care of themselves, without any further contributions of our own. 150 b Euros for the PV modules as a good example.
Bringing this now back to the topic Ireland and budget (Opportunities for Ireland / irish business):
f) Kerry Gold Butter
Whoops, how does this relate to this at all? Please bear with me. I do presently enjoy, with my MBA perspective, to watch how Irish butter gets into the German market. Just one year ago, this was sold at 1.65 Euro per 250 g pack, versus 0.99 for local butter, to people, who love the special consistency/flavor, a tiny fraction, maybe 5%. Presently they repeatedly run actions to sell it for 1.3, 1.1 Euro, then retreat to 1.4, 1.3. They are “developing the market”, more people try it, and my estimate it, you could get this to a 20% market share, while keeping a 0.1 premium to the local price of now 1.15, opening up a 80 Mio Germans + 70 mio around to a 5 times larger production base in Ireland. Wild guess. Your Feedback is very welcome to me. Restrictions, problems I don’t know about?
g) Opportunities for Ireland / Irish business
Engaging in many forms of renewable energy stuff, does not require to gamble large investments / installations. It is often a modular business, the local sources of biomass (that was driving my Kerry butter bit above). Irish businesses have some home bias advantage (lets say 20% easily) to provide local installations, you don’t bet the farm on it. Nuc plants run on uranium from Canada, Niger, and some more unpleasant, uncertain places. You will not ever develop the technology on your own, you would buy the turn-key plants from EdF /Areva. Half the costs of PV are local installation, putting various pieces together, perfectly replaceable with more local components, over time.
Some irish bog with some hydrogen from electrolysis, from irish windmills and PV converted into some better storable stuff? No big opportunites for powerful patents to choke the rest of the world on, sure, desperately hoping that some irish genius sees, what 100x more people somewhere else overlooked, but organic, local, resilient development, replacing expensive imports with home grown.
h) economics research opportunities
I believe that the economic dynamics of the developing renewable markets, with negative prices for physical (albeit not material) goods, are a fertile, productive ground for more economics research, and because Ireland is in many respects a unique place, and not just with respect to that, there could be a unique Irish flavor to that, only you can develop. It is your place, your problems and opportunities : – )
And focusing on what you are especially good at, both in production and research, the comparative advantage, is often a good idea.
http://www.economist.com/news/finance-and-economics/21569049-irelands-success-attracting-foreign-investment-has-its-drawbacks-fitter-yet
The Economist magazine Oct. 12th-18th has a 14 page supplement on the world economy. I found it interesting in general as well as the comments on Ireland.
http://www.theguardian.com/commentisfree/2013/oct/16/taoiseach-enda-kenny-worng-claim-austerity-bailout
“Austerity is the enemy of growth and cannot resolve the crisis.” Perhaps it should read that austerity is now the “engine of the economy” (huge numbers making a living off austerity admin and related) but cannot provide growth.
As MH has regularly pointed out, the economy has no real growth or employment engine at this point. It is largely functioning on future cashflow (borrowing against its future). That has not changed and is not addressed at all by John McH who always justifies his analysis on the basis that there was or is no alternative…..and he once again CONFUSES LIQUIDITY AND SOLVENCY…
@Francis
Distributed solar thermal collection just makes sense and is now an implicit part of the Building Regulations of renewables laggards such as Ireland and the UK. Distributed solar PV is more questionable at present pricepoints for hardware and installation but through the incentives programmes of most EU and US states at least has the virtue of boosting volume, industry standardisation and moving such investments out of the black economy.
Ireland is substantially an irrelevance in renewables technology research and innovation. As it is energy sector, the margins achievable are utility-level margins i.e a few percent, which requires large scale commercialisation to make any such ventures worthwhile to investors, unless the market is incentive-driven as in Germany.
In a tiny deeply indebted state such as Ireland very few businesses are going to entertain committing capital to such plays, especially where the Irish government has shown minimal commitment to encouraging development of local renewables business. There were once some indications that a substantial commitment to ocean energy might be made (feed-in tariffs and funding for industry-led R&D) but this sputtered and died. Of the two local ocean energy developers of substance, one was bought by a French defence contractor and the other was filleted into liquidation by an EU energy group while the Irish government bumbled ineffectually.
Your comments about patents and the attractions of agrarian small scale biomass-based renewable energy generation seem to me more to do with a German vision of Ireland as a bucolic, green retreat. You know very well that paradigm shifts in energy sustainability require resolute leadership, social ‘glue’ and a lot of wealth. The road your state is embarked on to deliver an energiewende is also the only viable road for states such as ours. Practical support would be appreciated.
@francis very easy to persuade/buy Irish support..back date the…
http://m.spiegel.de/international/europe/a-927718.html#spRedirectedFrom=www&referrrer=https://www.google.com/
I wonder, do you have 3sat in Ireland?
They have Büchner (der hessische Landbote: Krieg den Palästen, Friede den Hütten, War for palaces, peace for huts) just now,
A list of us patents per country
http://www.uspto.gov/web/offices/ac/ido/oeip/taf/cst_utl.htm
the epo version
http://www.epo.org/about-us/annual-reports-statistics/statistics/granted-patents.html
@Francis
‘m not sure what point you are making through those aggregate patenting stats.
In renewables and transport technologies German inventors dominate. US inventors dominate in medical device, cloud computing and non-cloud-related telecoms technogies as well as consumer electronics.
But we note that the US now lacks a consumer electronics manufacturing capability and that its manufacturing companies increasingly rely on international trade partners for product/service engineering, manufacture and order fulfillment. Patents provide the means to control global business networks.
Globalisation of US corporations is tax-driven as well as to do with unit labour cost. German corporations still predominantly engineer and manufacture product and perform order fulfillment out of Germany. I don’t however believe that this is tax-driven behaviour or even to do with low unit labour costs in Germany. I think there are strong national and societal considerations at play, not to mention imprinted memory of what assets need to be controlled in order to survive major conflict.
francis: Re your 4:15 -Oct 18th. Been away from desk for a while.
What I get from Brian Woods Snr,…. is that you apparently think we are just plain crazy with a our energiewend …”
Did I say that? Or something similar? Seems odd. Germany is welcome to any energy route its politicians and citizens will decide. The matter may or may not be any benefit to us.
What does matter, to us, is our almost complete dependency on fossil fuels (liquid and gaseous) for our domestic and commercial energy needs. If we do not mitigate away from these – like quickly, we are in for a real hard time in perhaps a decade or so.
So far, any effort to mitigate, is wrapped up in political spin and persistent demands from some in the energy industry (or should that be the taxpayer-looting squad!) for ‘incentives’. Its too sad to contemplate.
But when folk (anywhere) have to ration energy use. Then see what happens! Bad stuff!
Tony, Brian,
sorry for the delayed reply. Yesterday night I had here a 4 hour cutoff from the internet, also on the cell phone from another provider, so it was not a provider issue. Interesting.
Brian, you didn’t say that. I just felt some significant bewondering, more from others than you, and I would write this differently today. But it is also just a blog comment, and not a scientific paper, and your comment makes me happy, that this comment irked you. Good feedback for me.
Same thing, why I asked back on a comment from John Gallaher, a week ago, where I sensed that I am missing something.
Flood / cost / risk / granularity
We had this pretty big flood here begin of June 2013, I left a few words about. And knowing that this is a good real world example for the risk considerations, I wondered what I write. I had problems with one of my hands, and this weekend was the first I could do extended bike trips to both Pirna and Meissen, both 800 year old cities 39 and 28 k large, both again hid hard in the flood, because they are close to the Elbe at places, where you can not really do that much to radically prevent it.
They must have had this for all of the 800 years, or something with the climate must have really changed in the last 200 years. But I had looked at and taken pictures of at least 2 dozen steles with flood marks, and the earliest signs were from 1780. It doesn’t take an advanced physics degree to paint a mark line and year number, and this is important information.
And I had thought about it, and looked further, and thought again, and yesterday I found a calibrated mark for 1655 in Pirna, and today one for 1501 in Meissen, and 2 others before 1780, pretty much at the place of my last hope, at a Stele, but on the backside, at the house of a Jewish trader, murdered with his wife in 1942, as shown in a memento of their 4 surviving children. Next week I am digging into their archive, with the family name and the “Gasse”.
And we know about the wiki/St._Mary_Magdalene’s_flood, in 1342, possibly triggering the plague
Those floods have been there all the time, and these people were not stupid to settle there, because until 1860 with the railways spreading, rivers were the main transportation routes, and every meter further away from the river was additional cost and lost opportunity.
Beyond that, at least 95% of the shops on the ground floor are operating again, and most of the remaining closed with signs “will open on x.th November”, an estimated 1% with fate not on open display.
Just 2 days after the flood I had seen all the people hammering away at the wet dirty plaster. Nobody had the slightest doubt that the cities will continue as before in full size as before. People were not laid off, just some Kurzarbeit, the cost for Germany actually seems to come in at just 6 instead of the budget maximum of 8 billions.
And we can estimate what a 1000 year flood would look like, 10 – 20 dead, 20 – 50 billion cost, a one knock of <2% GDP, and without the slightest doubt that as soon as the water has receded, people go back to their houses, hammer away the wet dirty plaster in the ground floor …
And they will not the slightest doubt that their cities, businesses will be reborn and meet the same demand as before. No fear.
The better protected / protectable Dresden here, we had 36 hour warning, tens of thousands of citizens were lining up to first fill the sandbags, put up the metal defenses, building and holding the sandbag dams, some up to 6 meter high. Without any official ordering, just by themselves. 3 hours after starting to built the dams, the first sausage grills and beer keg stands went up, and people enjoyed without any fear the sense of one city, one nation, indivisible, solidaric, resourceful, with a 500 million people hinterland being brought to lean in as needed.
No looting, no violence, no curfew, no dead people. It took me, from 1.5 km away at least 6 attempts, to react to some internet postings, to put my hands on one sand bag, because it was always done before I came to it.
Why do I write this here in all this detail? Because I want to compare this to
a) the lower 9th ward in New Orleans, 8 years later still repopulated only by 15%, curfew, martial law, peoples shot. Rebuilding your shop there would have been economic suicide.
b) Fukushima
They have cleared a 30 km Radius, probably forever, possibly more. About 200 k people, times 8 x GDP per Capita of 40k, makes about 60 b, and counting, the sea is more and more contaminated, gump, and after 3 miles island, czernobyl, this is now the 3rd case, the argument of singular cases of some crazy ivan are wearing increasingly thin.
How many Irish martyrs would walk into a burning French nuke reactor in your place?
If one of the French nuke plants would go off, hundreds of millions of people would live in fear. And you would have huge social conflicts between those, who say, it was just one, somewhere else, and those who say, but what if we here would be next.
I was somewhat lengthy with this here, but
a) it gives me more confidence,that my careful approach of collecting evidence, being irked, thinking, hypothesis, prediction, and then finding the missing links, is successful and made me pretty happy today, AND
b) because it helps to describe, what I am going to say next.
Brian,
we have total agreement, that a very safe supply of energy AND at a reasonable price are absolute priority.
@ francis: Very interesting post, contrasting the different reactions to major ‘natural’ disasters. New Orleans is a very difficult case to make sense of – except if you believe that there was a deliberate decision not to re-build parts of the city – for reasons which escape me, but must make ‘sense’ to someones. Baffling.
“We have total agreement, that a very safe supply of energy AND at a reasonable price are absolute priority.”
And may someone wish both you and I the best of good luck on that one!
Anyway, this is a bit away from the main point of this thread – our Budget, or looting the taxpayer, again. For what? To feed the interest machine? We pay 100 billion in tax revenue*; we spend 110 billion on education, health, social welfare, etc., etc. and 5 billion on interest payments. And everyone (well not all of us) think that borrowing 15 billion to make up the shortfall is sustainable – we will roll-over the existing debt next year – then borrow some more, and off we go again!
If this seems like a good definition of madness – then it is madness!
* Not the real amounts – just for illustration.
being a little bit on the rant tonight,
A few more thoughts with respect to energy.
Going down the Sun-Earth Moon Satellite, China, USA, Germany, Ireland scheme, hyper simplified
Neither the US or China give a sh** about carbon emissions by itself, both figured that the consequences will not really hurt them, at least in the short run
For the US, see Fankhauser 1995 “Valuing Climate Change”, the 200 year approach of Nordhaus 1973 BPEA is worth to note as well. I don’t read Chinese.
a) US have plenty of cheap coal at about 4 c, shale gas to tide over the next 10 years, and 12 carrier fleets.
b) China has the problem that burning their own coal (5c ?)produces so must particulate matter (PM), not because of CO2, or sulphur effectively filtered out, but because the nitro-oxygens then react with other stuff to PM. There was a study last year, putting the life expectancy reduction by that at 5 years, my take, after diving into details, is more 1 – 2 years, but that really hurts, in life quality.
Getting more energy with burning somewhat less coal is really important to them, and at a price sticker of 127 000 $ to a Chinese life, they will operate those nuc plants at a different point of tradeoff between price and risk as me or you would do, with us putting a 10x higher price sticker on life, 1 m Euro.
c) Germany has enough brown coal (5c), as a safety backup, and from my perspective a VERY reliable Russian gas supply 4-6c). They would finger with that just one time, and with North stream we removed any doubt or possible blackmail from some little polish Sikorsky twit or others.
And the will and the muscle and the technological competence to push long term large scale changes.
d) Ireland has no internal resources AND a granularity cluster risk problem. Would I built nuc plants for diversification, forgetting about the risk, but with paying the (http://news.yahoo.com/britain-build-europes-first-nuclear-plant-since-fukushima-122333580–sector.html)?
9.2 pound cents, splitting the 10c demand to 8.5 c offer right in the middle, I wonder why ? : – )
That is 10.7 Eurocents inflation protected for 35 years, and a wonderful FR, UK, China, Areva mélange , when things would go bad. A similar deal for Ireland would be 13 c, with the links, more risk addon.
Something you would have to contemplate for security, but certainly deadly to any energy intensive industry.
@ Tony, Brian, all
I just want to give back, that your comments are very worthful for me, and I did think a lot about them over the weekend.
And for reference to above, the China PM troubles start even earlier this year
http://news.xinhuanet.com/english/china/2013-10/21/c_132816417.htm
if you compare their numbers for PM2.5 of 500, that would be about 2x = 1000 for PM10, for which we fret in Europe at levels of 50, to shut down streets.
Visibility of below 100 meter, compared to 100 kilo meter on a good day in Munich (presently 30), roughly proportional to PM numbers.
They have no choice, they must built nuc, now, fast. Damn the risk.
but over worked engineers make mistakes.
Perhaps now is the time to flag a future increase in stamp duty, say 0.5% per year for the next 6 years.