SFA/IBEC next up for a Digout?

[PaddyJoe McGillycuddy]

According to the Bacon report the 25% oversupply in hotel rooms is due to inappropriate tax breaks. Many of these new 'tax shelter' hotels are competing with long established businesses.
This smacks of 'privatising profits and socialising losses'. The reason that these 'tax shelter' hotels continue to remain open is that the original tax advantages could be clawed back if the hotels close inside 7 years of opening.
So the taxpayer gets squeezed twice? First on loss of original tax paid and then on some scheme to sort out the overhang in an 'orderly way'?

[cyberianpan]

According to the Bacon report the 25% oversupply in hotel rooms is due to inappropriate tax breaks. Many of these new 'tax shelter' hotels are competing with long established businesses.
This smacks of 'privatising profits and socialising losses'. The reason that these 'tax shelter' hotels continue to remain open is that the original tax advantages could be clawed back if the hotels close inside 7 years of opening.
So the taxpayer gets squeezed twice? First on loss of original tax paid and then on some scheme to sort out the overhang in an 'orderly way'?

The scheme to sort out the overhang would have little benefit to the hotel owners

For example.... faced with say 15,000 hitting the Dole... or else trying to train them to a different, more useful skill... I'd go for the latter.

The "information sharing" would cost little either.

True that the original tax breaks were a disgrace ... and some good FOI's would put serious pressure on Cowen there.

cYp

[PaddyJoe McGillycuddy]

So you are not in favour of any increased private sector credit in the economy. However you do support a government backed scheme and/or guarantee to provide an orderly wind down of bad, unprofitable and unwanted businesses?

[PaddyJoe McGillycuddy]

So the model for the guarantee scheme is based on one in Chile:

A spokesman for the Minister said last night the department was looking at Fogape, a credit guarantee scheme in place in Chile, as a potential model for the system. About 20 countries across Europe have similar state-guarantee systems in place.

I wonder if somebody from the DOF is planning a junket to South America?
Or maybe the direction is coming from the new boss who contributed to an academic paper for the World Bank which mentions just such a Chilean example:
http://www.tara.tcd.ie/bitstream/226...1/FFA_book.pdf

[MrFunkyBoogaloo]

So IBEC are looking to lower the minimum wage and increase our debt burden?

..Only in Ireland.. Will the sheeple fall for it?!

[powderfinger]

bump
Richard Bruton has published the Government Credit Guarantee Bill which will introduce State Guaranteed backing to bank lending into certain cohorts of the SME sector.A 2% premium will attach to the portion of loan covered by Guarantee (75%) and initially the fund will enable €150m of additional SME lending to be underwritten by the taxpayer.

Minister Bruton publishes Credit Guarantee Bill - RT News

The Small Firms Association has welcomed the publication of the bill. Ian Martin, SFA Chairman, commented: “After 4 years of lobbying by the SFA, we welcome the eventual delivery of a credit guarantee scheme, which we expect to be fully operational by the end of Q2 this year. Access to credit is vital for small business survival and expansion. The credit guarantee scheme should move the risk pendulum of banks to say ‘yes’ to more small businesses and that is most welcome.”

However, he noted that the cap on the Scheme of up to €150 million of additional lending per annum, which will benefit just 1,800 businesses, is concerning.

ISME, the Irish Small & Medium Enterprises Association has also welcomed the publication of the Bank Guarantee Bill, for which the association has lobbied for a number of years.

[neiphin]

So IBEC are looking to lower the minimum wage and increase our debt burden?

..Only in Ireland.. Will the sheeple fall for it?!

the "sheeple" will have no say

[LamportsEdge]

I wonder how much of this 'underwriting' will crystallise into unrecoverable debt from a number of small companies on whose boards sit party donors?

My estimate would be 100% of the underwriting over time. The problem in Ireland for small companies isn't that the loan facilities isn't there. The damn business isn't there because of the economic downturn and the fact that consumers who have any money aren't spending it. This should be visible in the national accounts in savings reserves estimates.

What is the point in guaranteeing loans to companies to chase business that simply isn't and demonstrably isn't there? Isn't this yet another example of the state looking to breathe life into a false notion of an economy? With the taxpayer on the hook (when) and if it fails?