Govt to tax the lower paid and cut dole

[Cato]

Following the collapse of our business, due in large part to my ill-health, my wife and I know find ourselves living off Sick Benefit. I'm still quite ill and will most likely be so for quite some time. We are managing fine. We wrote to our lenders and negotiated reduced payments/moratorium. We have been careful over the years to build up some savings. All in all we are quite comfortable and could easily swallow a 10% cut in the benefit paid to us. I cannot say that I am in favour of it, but I could handle it, and it certainly would not be enough to get me onto the streets.

[Likely Lad]

economic suicide

all that money will be taken directly out of the economy as the lower paid and people on the dole spend it right back into the economy

this will work about just as well as the hike in VAT did

muppets!

FF won't do this for any economic reasons, positive or negative

they will do this because they get a perverse kick of screwing over struggling people while funding their buddies pockets

[Likely Lad]

It is not a question of luck, I am self-employed. The dole could be cut without any political repercussions was the point I was making for the reasons I gave. That won't happen, but our surplus workforce need additional incentives to emigrate. Harsh but that government policy.

Fair enough but if seriously think there would be no political repercussions of cutting the dole in half you're living in a different planet.

[cyberianpan]

economic suicide

all that money will be taken directly out of the economy as the lower paid and people on the dole spend it right back into the economy

this will work about just as well as the hike in VAT did

muppets!

Hmmmm... well a good idea would be somehow increase the velocity of money (i.e. not just one spend , but many spends per period)

However one of the problems in Ireland's economy is that money goes like:
Bing, Bing,bing, BANG ! (the money goes overseas)
or even
Bing, BANG !

So attracting FDI and attendant jobs, is more important than trying to put money into the economy via consumer spending

Cutting the Dole (and presumably the minimum wage) will make us more attractive as a "lower" cost base....

We do need pro-cyclical measures.... being a downwards correction

cYp

[bormotello]

no the full rate of both JA and JB is the same, in the case of a single person €204.30 per week on both.

It would have been fine in theory to have a reduced rate for JB when there was full employment and people could easily find a new job within 12 months but now this country will have thousands able willing to work long-term dole recipients because there are sweet f.a. jobs. Reduce JB and you will be further punishing the ultimate victims of this recession.

In this case make start to decrease JA by 5% for every year spent on jobseeker assistance. It will not affect much people, who lost job due recession, but will hurt professional welfare recipients.

[hammer]

All social welfare payment will be cut by 6.6% - it is now politically possible to justify it.................defaltion

Bringing the low paid into the net will also have the effect of higher taxes for the rest of the population. No other way than reduce PAYE allowance to €1,500 from €1830 and get rid of the weekly PRSI exemption of €127.

My gut feeling is the biggest "saving" will be to cut pension relief to standard rate 20% - not 30%, we can come back to this in about 5 years time if we are still " in business" and maybe increase it to 30% then !!

[Congalltee]

Fair enough but if seriously think there would be no political repercussions of cutting the dole in half you're living in a different planet.

In our system, people do not matter except as voters and economic units. There will not be a vote for a while and capital has been prioritised above labour. Dole, minimum wage and public sector pay will all be cut regardless of their deflationary effect or in a far less important sense, the impact on individuals and families.

If the government can get a 30% haircut for nama through, they can drive any policy to its conclusion.

[Mouroux]

Sit back and wait for the political rhetoric to blow-out. The Lower-classes are in a good position by virtue of policy: the EU has been and is becoming more of a Socialist State. Most decision making has been transfered/centralised with the Union. Now that the Lisbon 'Treaty' has been ratified, it's full stream ahead. The recession in Europe will be seen as an irresistible opportunity to permanently undermine the hated middle-classes, anyone on c. 100k. I am not saying they are in for the shock of their life, it will happen in a staccato series of changes and adjustments.

[cyberianpan]

My gut feeling is the biggest "saving" will be to cut pension relief to standard rate 20% - not 30%, we can come back to this in about 5 years time if we are still " in business" and maybe increase it to 30% then !!

I would be very cautious about introducing a "temporary" measure on pensions

Either the tax relief is justified now : or isn't

Assuming it is justified, here's why robbing tomorrow to pay for today is especially harmful as it would effectively cut pensions contributions:

1) Assets at nadir: many asset classes are likely priced at or near their nadir, cut contributions now means we miss buying the cheap stuff. Indeed it is an unhelpful pro-cyclical philsophy: exit market when low... buy lots when high. Will end up meaning pensions get very poor returns
2) Demographic problems: Our demographic situation is worsening.... children falling off.... and adults living longer. Good private pensions are more important now than ever

Also btw some controlled deflation is what we need

cYp

[myksav]

The auld "hit the lowest, they're used to hardship" thinking.

our surplus workforce need additional incentives to emigrate.

Emigration again? While we have still immigration??
What's the plan? Get rid of the expensive Irish and take in cheaper immigrés?
Where would these emigrating Irish go to get jobs?