2002 Revenues - 2009 living standards

[SPN]

Given that we are currently taking in taxes at about the rate we took them in back in 2002/3, should we not cut all spending back to the levels of 2002/3, and do it across the board in the interests of fairness.

Tax revenue may be €2bn lower than previous prediction

Speaking after the latest Cabinet meeting to finalise next month’s emergency budget, Mr Cowen said: “We have basically 2009 living standards in terms of wages and services, on the basis of revenues that are more akin to 2002, 2003.”

Revenue in 2002 was €31.7 billion while in 2003 it was €32.8 billion. An average of these incomes would offer the exchequer just over €32 billion.

And if we could keep this one non-partisan so much the better

[atlantic]

Big problem the Irish public is up to its eyes in debt and have budgeted at 2007 levels.
There would be repos across the board.

[anlkestony]

Big problem the Irish public is up to its eyes in debt and have budgeted at 2007 levels.
There would be repos across the board.

Nailed it in one there. Peoples backs are already against the wall.

[SPN]

Big problem the Irish public is up to its eyes in debt and have budgeted at 2007 levels.
There would be repos across the board.

But the repos would only effect the people who were reckless about the levels of debt they took on, the rest of society would be okay.

[atlantic]

Not really, there are people in secure jobs both working feeling the pinch.They borrowed for ordinary mortgages in Dublin form 300,000- 400,000 when interest rates were low.When interest rates started to rise the pressure took hold,they now have lower interest rate again for the time been but this will not last and the pressure will be back on again ,its sad and a catch 22.We are not in a position to control our monetary policy this is left to the gang of thieves in the ECB.

But the repos would only effect the people who were reckless about the levels of debt they took on, the rest of society would be okay.

[wysiwyg]

If you can manage to get prices down to 2002 levels, all will be well. Now, while that mightn't be practical or achievable in some things, it certainly can be in others e.g. ESB and Gas prices... should semi-states be making profits over and above what they need for ongoing investment, when homeowners and business people are being screwed to the wall ?

[Victor Meldrew]

Big problem the Irish public is up to its eyes in debt and have budgeted at 2007 levels.
There would be repos across the board.

Tax revenues of 2003 to fund the public sector would be fine for the Private sector.

However, as benchmarking is a one way street here.....

[SPN]

Not really, there are people in secure jobs both working feeling the pinch.They borrowed for ordinary mortgages in Dublin form 300,000- 400,000 when interest rates were low.When interest rates started to rise the pressure took hold,they now have lower interest rate again for the time been but this will not last and the pressure will be back on again ,its sad and a catch 22.

But the prices were a factor of what people were prepared to pay, not of the cost of building. People chose to pay those prices.


But the point of this thread is to look at both sides of the coin at the same time.


Revenue coming in is back at 2002/3 levels. If we don't have the money coming in, how can we subsidise those people who made bad financial decisions?

[Question R24U]

That would be a cut of €28bn. Even spread out over 5 years, is still a very tough ask.

But in my view, a worthy one. The structural nature of the defict needs to dealt with.

Once we have the absolutely necessary cuts (this and the last budgets' easy targets) Then there are the Bord Snip ones (waste, double spending ie blindingly obvious but requires cover)
There are 3 bigs one which will need to be faced and require a idealogical approach:
1) Targetted public sector cutting of the payroll (as opposed to embargoes, pay freezes but specific ones justifed by matters of strategy eg
a) replacing the TV licence with centreal funding ie save the 8% admin costs;
b) ditto reducing the number of planning authorites;
c) Abolishing car tax and replacing it with increases in diesel and petrol duty;
and on each occasion re-deploying the staff or making them redundant.
d) Targetting the lazy, dishonest, frequently absent, moonlighters, internet abusers - most organisiations would call this good management.
e) All new staff to get defined contribution pensions and no tenure (bar judges).

2) Health - HSE. Not the usual admin. cuts call but re-consider elective surgery for public patients, closing or selling hospitals, increasing contributions from users ie real cuts. Hardly likely (and in some cases undesireable).

3) Social welfare. This is a very fine line, because if you cut too deep it will cause real hardship and could push some over the line to criminality. But one would need to re-consider who gets social housing, the rental charges for them (€35 a week rent?), the length of time people can claim social welfare, workfare schemes, or replacing the lot with a basic income system and charity. Should social welfare exist for the administrators and ensure total dependence on the State.

This is all nasty right-wing stuff. But to get back to 2002 levels would be necessary.

Then the leftie stuff:
1) Taxing wealth.
2) A flat tax on property including primary residences.
3) Much higher tax on inheritance (or in reality, lower thresholds)
4) Sin taxes eg tanning salons, chocolate.
5) Pollution taxes.
6) Water and waste charges which reflect cost.
7) Real charges on second homes (€200 ffs)
8) Third level fees.
9) Extending CAB's remit.

[SPN]

If you can manage to get prices down to 2002 levels, all will be well. Now, while that mightn't be practical or achievable in some things, it certainly can be in others e.g. ESB and Gas prices... should semi-states be making profits over and above what they need for ongoing investment, when homeowners and business people are being screwed to the wall ?

I respectfully suggest - and I don't want the topic to go partisan - that this issue has been addressed to some extent recently, both in terms of price reductions, and in terms of grants to help people reduce consumption.