Co-location a licence to print money for big investors only

[Mariella Froster]

Richard Curran in yesterday's Sunday Business Post sums up the monumental gamble that Harney is recklessly taking with co-location and the risk free bonanza that awaits big investors - all paid for with TAXPAYERS money. The pay off? Nothing whatsoever for the vast majority - and services to patients do not even enter into it.

Stop the insanity now.

Where are the gutless opposition on this issue?

From the article:

...Irrespective of the wider debate about the ideological and practical issues involved, the legislation introduced by the then Minister for Finance Charlie McCreevy, which grants the tax breaks is incredibly generous.

...

The point is best illustrated by the investment prospectus for the Beacon Hospital, which raised 42million Euro in equity from tax investors in 2005 through Goodbody Stockbrokers. The promoters raised a total of a 165 million Euro for the hospital, which was made up of 42 million in tax investors equity, 107 million in bank borrowings, which is non-recourse to the investors and a further 16 million in loans from the promoters. The prospectus shows that a tax investor who put in 75K in equity would benefit from 293K in capital allowances over seven years, which would be used to offset their tax bill on any other Irish rental income they have.

The investor who even borrowed the 75K would reduce his tax bill by 141K over seven years without having to actually put in any of his own cash. The annual return on the inevstment was 28.9%.

The promoters are taking a risk, but in the end they will own the hospital. The investors benefit from capital allowances based on borrowings they have not taken out but have been taken by the company.

...

Based on the ratio of equity of equity to borrowing for the first [Beacon project] Goodbody's could be helping Beacon raise around 250million in equity over the next few years for [the other three planned Beacon] projects

...

It will be a no brainer for investors. They will sign up to annual returns of around 28% without taking any risk. In the current climate of a property slump and a highly volatile stock market, investors will be queuing out the door to avail of these extraordinary tax breaks backed by a solid promoter with a successful track record.

Irrespective of whether the co-location project will solve the problems of the health service or not, there is one enormous flaw in the way these tax breaks are construtecd. They are of absolutely no benefit to anyone who does not have a very sizeable rental income from propety. In other words, they are not available to the average Joe.

They are not even available to the reasonably well-off investor. They are only of real benefit to the extremely well off. If it solves the health service problem, it may even be worth it. But if it doesn't, it will have been one hell of a state subsidised bonanza.

[Mariella Froster]

Harney should resign immediately over this issue - it's a scandal that she is being allowed to railroad co-location through:

http://www.politics.ie/viewtopic.php?t=21194

Why dont she and her husband move to the USA instead of trying to turn this country into the economic mess that the USA now is - thanks to neo con zealots like the Bonnie & Clyde of Irish politics.

[Compound Fracture]

Where are the gutless opposition on this issue?

The "gutless Opposition", as you call them, have opposed co-location tooth and nail since it was announced by Harney, and Fine Gael in particular made it a central plank of their election campaign. It was also the very first issue that Fine Gael brought to a vote in the new Dáil.

Slept through all that, did you?

Would your time not be more usefully spent if you aimed your fire at the Green Party, 10-15 FF backbenchers, and all Independent TDs, who campaigned against co-location and then voted it through after the election?

[Leftfemme22]

[quote=Compound Fracture]

Where are the gutless opposition on this issue?

The "gutless Opposition", as you call them, have opposed co-location tooth and nail since it was announced by Harney, and Fine Gael in particular made it a central plank of their election campaign. It was also the very first issue that Fine Gael brought to a vote in the new Dáil.

Slept through all that, did you?

Would your time not be more usefully spent if you aimed your fire at the Green Party, 10-15 FF backbenchers, and all Independent TDs, who campaigned against co-location and then voted it through after the election?[/quote:1imzjqxo]

Hear Hear, FG and Labour where extremely vocal in their objections to Co-Location and still are. Its just a pity that FF spun Co-location as a PD idea so they could suffer tha consequences at the election (and they did)

[Kal-El]

Tax incentives are an alternative to the government (i.e. us) funding projects and very useful as the cost to the Exchequer is tax foregone rather than hard cash. I mean, I've used film tax relief to reduce my tax bill in the past. This is an attempt to boost the Irish film industry. I benefit, the film industry benefits and the government/other taxpayers benefit because they don't have to put the cash in.
It's a common sense proposition, although I'm sure the socialist buffoons will disagree!

[Leftfemme22]

Tax incentives are an alternative to the government (i.e. us) funding projects and very useful as the cost to the Exchequer is tax foregone rather than hard cash. I mean, I've used film tax relief to reduce my tax bill in the past. This is an attempt to boost the Irish film industry. I benefit, the film industry benefits and the government/other taxpayers benefit because they don't have to put the cash in.
It's a common sense proposition, although I'm sure the socialist buffoons will disagree!

In the same way that the loopholes in tax law which allowed multi millionaires pay no tax benefits the country as well?

Tax incentives create tax shortfalls. Have you even read the article. The return on this 'investment' is staggering and only benefits those with substantial rental income. It's a tax break covering a tax break and those yields will come from existing taxation. (i.e. You and me)

Have you the slightest f*cking clue what you are talking about?

[Kal-El]

Having worked in this area, used various tax schemes and advised others on them I know exactly what I am talking about.

[Leftfemme22]

Having worked in this area, used various tax schemes and advised others on them I know exactly what I am talking about.

Eh, I dont think so mate. But bluff away.

Is da boom getting boomier for you too?

[jmcc]

Having worked in this area, used various tax schemes and advised others on them I know exactly what I am talking about.

And you claimed to be ex-FF. Now there's a surprise.

Regards...jmcc

[Kal-El]

Having worked in this area, used various tax schemes and advised others on them I know exactly what I am talking about.

Eh, I dont think so mate. But bluff away.

Is da boom getting boomier for you too?

Eh, what exactly is hard for you believe or understand?
I didn't say I was involved personally in anything of the scale being discussed here. I worked in the tax department of an accountancy firm so I do know what I'm talking about.
Take that at face balue or don't...I couldn't care less.

My point is if you don't agree blame the govenment...don't blame advisors or the investors.
And no the boom is not getting boomier...things are ************************e! Investment properties going down in value by the week, pension fund and share investments collapsing...but I'd a good night on Saturday!