Budget

[Muad_dib77]

Our new budget isn't as hard as I thought it was going to be.. granted yes we'll all end up with less money in our pockets and the cost of living will go up for everyone (with VAT changes and all)..
reading through it I can't help but think that a set of simpler changes would have as much impact and have been much easier to understand and deal with.. why all this half underhand/cloak and dagger stuff when essentially all that needed to be done was something along the lines of;

"Take more money from people who wont die if we take more money from them."

would a simple model of increasing tax credits in the lowerbracket - but upping the tax %age for both brackets not give similar results?

1. Higher tax credits would release more funds to lower paid peeps
2. Increased tax %age would recoup funds from peeps that make more monies, and so in theory can afford it
3. Increased tax %age for peeps in top tax bracket would help cover cost of increased outgoing for running the country.

The Levy Idea is double edged in that it adds an extra layer of complexity to the tax system..yeah it's simple enough to calcucate with and it affects everybody the same..I can't help but remember that when a similar levy/tax was introduced in Denmark it started at 3% and when I last checked it was (sit down, take a deep breath!) 11% - that's before your text credits are applied. Yip - Before! It's an open door to nastyness that doesn't need to be there if you have an otherwise solid tax model. IMO.

And what's up with impacting smokers and car owners? I just don't agree with that at all..I don't even smoke - regularly anyways.

What do you think??

[mcgon1979]

hey Maud,

the health levy that we all pay is 2% on gross. that was meant to be a temporary measure, but how long is it around now... this new tax levy will be around for years. I don't mind it but think its unacceptable to impose it on the pensions and those earning less than 30k. I'll gladly take a hit with it, but I think its unfair on those who earn lower incomes as they will also be struggling with vat, motor tax, petrol etc too. the A&E charge is another on I think is a bit unfair. from 66euro to 100euro. Im sure alot of us can afford it as a one off, but some folks that are paid below average live form week to week, and a random charge of 100euro for an A&E visit could really hurt them. plus taking the medical card of old people is terrible yeah I know we are being assured that only 30% of old people who can afford it will lose out, but its stressful for old people to apply for it and fill in forms etc at this stage of their lives. I think it should have been

1% on people earning 36k - 75k 2% on 75k - 120k and 3% on 120k +

[kevinod]

From my standpoint, what exactly the measures are doesn't matter all that much, life is going to get most costly however they decide to take it off me. But one thing - why reduce ATM card charge from 10 euro to 5?? whats that about? One for the banks? they were just going to charge the public for that anyway.

What bugs me is this 'call to action' cr@p that they're going on with, like we've all put ourselves in this position. The government f'ed up and now need a bail out. I hope people remember this when it comes time for the next election!

Smokers and car owners are traditionally easy targets - it's uncool to say anything against something that discourages smoking, and with cars allegedly heating up the planet it's hard for anyone to take a stand against making it more expensive.

[fatboyfat7]

I know this is only minor but what I always wondered was why not include motor tax in the cost of petrol? An additional cost you pay continuously. Then, the more you drive, the more petrol you buy and the more motor tax you pay.
As from the rest of the budget I must admitt I thought it would be worse. Personally I think cigarettes should have been hit with another 50 cent. And the medical cards for the elderly in a disgrace. This means testing is going to be a right joke. Many old people have money in assets, ie their homes etc. but little actual cash.

[Mustang]

But one thing - why reduce ATM card charge from 10 euro to 5?? whats that about? One for the banks? they were just going to charge the public for that anyway.

.

The government made a backwards move some years ago by increasing the charge on laser/atm cards and credit cards. It is far simpler for the individual the retailer and the banks to operate in a cashless environment.
More secure for the consumer, -don't have to carry large amounts of cash.
More secure for the retailer -don't have to keep large cash amounts in store,don't have to count cash, don't have to make a trip to the night safe, etc. Same for the bank, -need to provide less coinage to businesses => less transport costs, these come into the bank by pallet, less storage space required. No need for staff to manually count cash lodgements.
It's win-win for all. Sometimes lowering the tax actaully increases the tax revenue as more people are prepared to use the service.
I presume they left the credit card levy (€40 is a disgrace) so as not to encourage people to 'spend money they don't have'

Anyway this measure was made in tandem with increasing the fee on cheques to €0.50. I'm not sure I agree with this particular one. But combined with what the bank charge you, It makes writing a cheque very expensive. Anyway the whole idea is to move people away from 'old skool' banking and towards electronic paperless (cash or cheque) banking.

[mcgon1979]

for the first time in my life I took my finances into hand and left bank of Ireland. screw them.. too many charges. plus you need to actually register to recieve credit interest (4.06%). you don't automatically get it. they need ID sent in etc and make it arkward.

gone to halifax. no charges at all. 10% credit interest paid on balances up to 2000euro. plus a visa debit card. far better than laser card as you can use it to buy stuff on web/ebay etc without going near your CC.

feels good to have told BOI to FO to be honest. plus Halifax are opened on saturdays! no more leaving work early to drive home and make BOI before 4pm. screw that.

[kevinod]

You weren't worried about the rumours that the company who owns Halifax were talking about pulling out of Ireland then...

[mcgon1979]

You weren't worried about the rumours that the company who owns Halifax were talking about pulling out of Ireland then...

not in the slightest Kev. I was more concerned with the RBOS and TSB merger not going through or the banks collapsing, but money is state guaranteed anyway. The objective for me was to leave BOI anyway, so if Halifax/RBOS announce they are leaving I'll just switch to any other bank who open on saturdays. no hassle.
If you look at potential problems you'll stay with the same bank forever.

btw, where did you hear that the parent bank was leaving? got a source? news story etc?

[Mustang]

plus a visa debit card. far better than laser card as you can use it to buy stuff on web/ebay etc without going near your CC.
.

I can see how a "visa debit card" would be preferable to a laser card, I assume this is because most online vendors do not accept laser? I fail to see how it's preferable to using a credit card though? It allows you to spend money you do have. Whereas a credit card allows you to spend money you don't necessarily have. And even if you do have the money the credit card gives you an interest free loan. Meanwhile if you do have the money you can leave it sitting in the bank earning interest until it's time to pay off your interest free loan at the end of the month.
The opportunity cost of using the Debit card, is the interest (payable to you) that you forgo in the interim.

Possibly OT (this is one of my pet hates when people go on about credit cards). There is nothing wrong with using a credit card. It is an interest free loan. It only becomes an issue when you don't repay that loan, same could be said of a mortgage or car loan. People blaming credit cards for their over spending is a cop out. Blame the person not the medium of payment. (rant over)

[soc]

Jesus lads, the budget was a f**king sham - they needed to make the hard choices now, for example:

1. Drastically reduce the public wage bill - there's been 7.5k more jobs in public sector in the past 12 months - total 373, 100 working un public sector with wage bill of over 12bn euro. That is just madness

2. Force the banks to acknowledge and call in developer loans and thus restore some confidence in the market - currently we're f**ked and the government actually want to give the developers some money via sub-prime loans


In about 7 or 8 months we'll have another (emergency) budget where they will make the hard choices because they'll have no choice. This country is now officially fubar!

[Dragonheart]

I like the way these are being called 'temporary measures' by the government, there was a temporary measure brought in in 1846, albeit by the British Government seeing as they ruled us then, and this temporary measure was called, Income Tax, I presume therefore we can be looking forward to another couple of hundred years of these 'temporary measures'!

[Bernard]

there was a temporary measure brought in in 1846, albeit by the British Government seeing as they ruled us then, and this temporary measure was called, Income Tax

And look what happened the following year...

[optical illusion]

Sometimes emmigration thoughts enter my head...

F**king country is a mess.

[Baldrick]

I know this is only minor but what I always wondered was why not include motor tax in the cost of petrol? An additional cost you pay continuously. Then, the more you drive, the more petrol you buy and the more motor tax you pay.

Don't get me started Back in the late seventies they did just that. Reduced car tax to a flat £5 and slapped a levy on petrol. Twelve months later they re-introduced car tax and left the levy on petrol. Don't give the f***ers any ideas (although, God knows they could do with some)!

[fatboyfat7]

I know this is only minor but what I always wondered was why not include motor tax in the cost of petrol? An additional cost you pay continuously. Then, the more you drive, the more petrol you buy and the more motor tax you pay.

Don't get me started Back in the late seventies they did just that. Reduced car tax to a flat £5 and slapped a levy on petrol. Twelve months later they re-introduced car tax and left the levy on petrol. Don't give the f***ers any ideas (although, God knows they could do with some)!

Sorry, wasn't around in the 70's. Wasnt even thought of either!

[mcgon1979]

I can see how a "visa debit card" would be preferable to a laser card, I assume this is because most online vendors do not accept laser? I fail to see how it's preferable to using a credit card though? It allows you to spend money you do have. Whereas a credit card allows you to spend money you don't necessarily have.

I think your last line kind of sums it up no? Some people in this country are not as disciplined as yourself Mustang and they enjoy "excessively" spending the money they don't have and won't have within the next 3-4 weeks to avail of the "interest free loan" you talk of. In fact, personal debt in Ireland is one of the highest in the world. Credit cards make it easy to spend money you don't have and in the long run can exploit undisciplined people who build up 1000s of euros on the card, and pay back 100+euro per month interest. If you investigated the figures I think you'd find most people who have credit cards don't use them as "interest free loans" that they pay off by the end of the month. People use them to buy things like a 2000euro holiday that they cannot possibly pay off within 3 or 4 months and consequently pay a few 100euro for the privilege. It's flawed thinking, and you should save the 2k for the hoilday instead. but hey, you seem pretty adamant that credit cards are better so I won't argue with you on it. Just a difference of opinion I suppose.

[Mustang]

I can see how a "visa debit card" would be preferable to a laser card, I assume this is because most online vendors do not accept laser? I fail to see how it's preferable to using a credit card though? It allows you to spend money you do have. Whereas a credit card allows you to spend money you don't necessarily have.

I think your last line kind of sums it up no? Some people in this country are not as disciplined as yourself Mustang and they enjoy "excessively" spending the money they don't have and won't have within the next 3-4 weeks to avail of the "interest free loan" you talk of. In fact, personal debt in Ireland is one of the highest in the world. Credit cards make it easy to spend money you don't have and in the long run can exploit undisciplined people who build up 1000s of euros on the card, and pay back 100+euro per month interest. If you investigated the figures I think you'd find most people who have credit cards don't use them as "interest free loans" that they pay off by the end of the month. People use them to buy things like a 2000euro holiday that they cannot possibly pay off within 3 or 4 months and consequently pay a few 100euro for the privilege. It's flawed thinking, and you should save the 2k for the hoilday instead. but hey, you seem pretty adamant that credit cards are better so I won't argue with you on it. Just a difference of opinion I suppose.

It is credit, pure and simple, people buy houses and cars everyday, with money they do not have. A credit card is no different. Entering into a credit agreement, without the intention or capacity to repay, is unwise.
Point being that if used properly the credit card is a more cost effective way of paying, ie. you can have you money on deposit earning interest, while you enjoy an interest free loan. If you don't have the money now (but will in the short term) you can buy the item now, without having to wait. You have to be an adult to receive a credit card, and as such are responsible for your own actions. Why pay today when you can pay in a months time at the same price? Businesses do this all the time to maximise their cashflow. I think it's a cop out to blame the medium of payment. If people are spending money they can not afford, that's their problem, not the fault of the medium of payment. I could for instance get a car loan for say €20k, put all the money on a horse, loose. Then owe the bank €20k +interest.
What is 'at fault' here, the financial tool (the loan) or the manner in which I irresponsibly spent the money?

Lets have another analogy. My car does 120mph, it's capable of it so why not travel at that speed all the time? After a while I crash.
What is to blame, the car for allowing me to act irresponsibly.
Or me for actually acting irresponsibily?

[optical illusion]

I have to agree with Mustang here. If you can't afford to pay for it in the short term then don't buy it. I first got a credit card in uni and I never buy anything on it unless I know I can pay it off at the end of the month. Years later I've never paid interest and always have it paid by due date, and I agreed paying 100% upon application too. If the day comes when I miss a payment then I will simply cut the card in half.

If you are prepared not to repay then you have to be prepared to take the consequences. It's like everything in life. I have no pity whatsoever for people in debt on their cards, especially if they continue to buy on it.

[mcgon1979]

I have no pity whatsoever for people in debt on their cards, especially if they continue to buy on it.

your a tough crowd Mustang/Optical. I can see your obviously hugely disciplined spenders. And that's great, I commend you. I'm the same myself. But I do see alot of people struggle to maintain such discipline. I have a credit card and use it responsibly. I do have a sense of empathy though for people who are encouraged to use their card by the credit card companies by raising their limit (often without being requested). In the same way I feel empathy for the 10000s who have homes repossessed in the credit crunch because unscrupulous financial organizations gave mortgages to people who had a history of bad credit. I think the financial institutions need to act in a responsible manner. but yeah, credit cards rock when used responsibly. like anything. alcohol, horsepower, whatever you like In my line of work though I can tell you that most CC users are not as diligent as you two.

[Mustang]

I take your point though Mc. I remember seeing one of those money advice programs (Eddie Hobbs or something), where they delivered a statistic that 1 in 2 (yes that's 50%) of credit card holders in Ireland do not clear their balance at month end, (my banking contact confirms this to be a good estimate). Scarey statistic when you think about it.

[optical illusion]

Yay! Join the self disciplined club!

Well, what can I say Mcgon, I am a fantastic human being.

Encouraged yes, forced no.

On the mortgage front I agree, bad, bad form on the banks part. They knew just like any of us that this boom wasn't going to last forever, yet now they are laughing happy as they repossess homes and make more money on people's losses.

[mcgon1979]

no. The banks are not making any money on repossesions as they cannot sell the houses as the market has collapsed. Even if they could sell them the value is far below the loan given to buy the house so the banks lose massively. Luckily they have the govt and tax payer to bail them out. Yay in the usa they actually bulldozed 10000s new houses that they repossesed. They could not sell them and they cost too much to keep. The land was worth more wiped. Sickener.

[mcgon1979]

no. The banks are not making any money on repossesions as they cannot sell the houses as the market has collapsed. Even if they could sell them the value is far below the loan given to buy the house so the banks lose massively. Luckily they have the govt and tax payer to bail them out. Yay in the usa they actually bulldozed 10000s new houses that they repossesed. They could not sell them and they cost too much to keep. The land was worth more wiped. Sickener.

[optical illusion]

Ooooh, very clever of them...

[mcgon1979]

god damn double posts... (posting from a mobile phone I was)