For political reform, it is well worth checking out the Political Reform Scorecard: http://www.reformcard.com/
Declan
,
Ireland has two economies in one not the export and domestic but the people with plenty of money and the people with plenty of debt.
60% of Irelands houses have no mortgage the remaining 40% percent carries a debt of 148 billion euro.
When interest rates go up the debt payers will get murdered, young couples are been bullied into paying these mad mortgages instead they should be advised to moving to the UK and declare themselves bankrupt.
The Irish government needs to increase taxes for all and start the tax bands at zero capturing the unemployed and pensioners at 20%.
The Mortgage holders should be able to write off tax for over payments’ of more than 75% per annum against income Tax at the higher rate. In return the lender would be required to charge no interest for that year .This could reduce the loan by 30% over 3 years allowing the banks debtors to get the banks out of trouble.
The Goverment also need to incourage the 60% with no Mortgage to start spending again and stop worrying and moaning about other people’s problems. Many of these people’s houses could seriously do with an Energy up grade any related costs should be written off at the higher rate of Tax creating construction jobs and starting a real multiplier effect.
We have a serious problem with rubbish talk and promises in Ireland There is currently lots of talk about creating jobs in the smart economy of the future .Totally forgetting that we had 300,000 people employed building houses most of whom are poorly educated and nearing 40 years of age and currently holding massive mortgages that are not been repaid.
Nama and the banks are holding a massive amount of housing off the market in order to prop up the sales and letting market .Clancy quay in Dublin is just one example 400 units complete ,sitting empty for 4 years rental Value 1150 euro per month Dublin is flooded with such developments.
Joseph
,
I think I will just vote for you. It really is a buggins’ choice isn’t it? No really great leadership from anywhere just when we need it.
AndrewSB49
,
This IS all your own opinion and not written by Fine Gael with the word-proofing done by Fianna Fail!
Terrific post Ronan – so clear and well summarised. Rather than state that the biggest spends have to be cut, you quantify how much they actually are and why you think they should be cut.
[…] the second one is from Ronan Lyons who took it step further and scored the main parties out of five on each of the economic policy headings. This post from Ronan is quite detailed & you will need some time to sit & read what he has […]
Hi all,
Thanks for the comments. Readers interested in this might also find this in-depth treatment of taxation by PWC interesting: http://www.pwc.com/ie/2011irishelection
Ronan.
Re SF comment above. The reason we are at 9% instead of less is that we are carrying the bank debt as sovereign debt. I have yet to hear anyone tell me that they have asked bond holders, buyers in Beijing, NY, London etc what they would charge if we refused that debt. Can you tell me? That is the real question that has not even been addressed. Just pooh poohed by FF, FG, Lab etc saying we will have no money if we don’t accept the deal. GO ASK FFS!
MichaelG
,
As the amount outstanding to bondholders is reducing all the time I think we need to look at what Bondholders were paid off and how much they were paid since the Bank guarantee was given in September 2008. Prior to the guarantee bonds were severely discounted on the secondary markets but became whole again at the announcement of the guarantee.
The discounts prevailing in Sept 2008 should applied to the bonds redeemed in full to date and this amount should be discounted against the EFSF fund allocated to Ireland. The ECB should pick up the tab for this amount as they were totally remiss in their oversight of Irish banks. This would be the equivalent of renegotiating with the bondholders retrospectively without burning them: The ECB should feel the pain instead!
Edmund Burke
,
You neglected to include Public Sector pay, which despite recent deductions is still about the highest in the EU, and completely at variance with pay in the real economy, especially at the lower pay grades.
Anthony Murphy, now with the Fed in Dallas did a lot of work a couple of years back in a review of Benchmarking 2.
Good analysis but I’ve a different perspective on some of what you suggest.
A graduate tax is more problematic than a non-recourse student loan scheme. The former could simply incentivise people to leave Ireland, taking their expensive education with them. We need graduates and we need them to be more cognizant of the true burden of their education on the tax payer but I’d prefer the amount “up fronted” rather than subject to another tax that may have perverse incentives and be manipulated by future governments.
I presume SF would just not pay back any of the various bank debts (oustanding bonds, promisory notes, recapitalisation money etc.) Obviously there’s a whiff of populist anarchy about this but the lesson from Iceland is that the more debt we can dump and the more favorable terms we can get on the outstanding amount, the faster our gov bond rate will drop. I presume SF aren’t admitting that in the short term this would threaten the jobs of the entire public sector but everything is negotiable. A referendum would go a long way to creating an impasse for O. Rehn and co. and provide us with a big stick to negotiate with. Outside Germany, most investment bankers don’t care if the ECB donates the cost of the outstanding bondholders. This may look like burning the ECB but it’s just forcing it to act like a central bank.(As MichaelG points out above) It actually makes Ireland’s “management team” look smarter and the country a better bet. We also have many many Chinese investors who view distressed economies like Ireland as a great way to enter the European market. It’s already underway with some smallish projects in Athlone but I’ve been reliably informed there’s significant Chinese investment available even for initiating large but potentially repeatable engineering projects like Spirit of Ireland. Just requires a political will and the nerve to upset the EU. Economic recovery often requires bold and unpalatable moves, beyond just taxing everyone to oblivion.
Ronan Lyons ,
For political reform, it is well worth checking out the Political Reform Scorecard:
http://www.reformcard.com/
Declan ,
Ireland has two economies in one not the export and domestic but the people with plenty of money and the people with plenty of debt.
60% of Irelands houses have no mortgage the remaining 40% percent carries a debt of 148 billion euro.
When interest rates go up the debt payers will get murdered, young couples are been bullied into paying these mad mortgages instead they should be advised to moving to the UK and declare themselves bankrupt.
The Irish government needs to increase taxes for all and start the tax bands at zero capturing the unemployed and pensioners at 20%.
The Mortgage holders should be able to write off tax for over payments’ of more than 75% per annum against income Tax at the higher rate. In return the lender would be required to charge no interest for that year .This could reduce the loan by 30% over 3 years allowing the banks debtors to get the banks out of trouble.
The Goverment also need to incourage the 60% with no Mortgage to start spending again and stop worrying and moaning about other people’s problems. Many of these people’s houses could seriously do with an Energy up grade any related costs should be written off at the higher rate of Tax creating construction jobs and starting a real multiplier effect.
We have a serious problem with rubbish talk and promises in Ireland There is currently lots of talk about creating jobs in the smart economy of the future .Totally forgetting that we had 300,000 people employed building houses most of whom are poorly educated and nearing 40 years of age and currently holding massive mortgages that are not been repaid.
Nama and the banks are holding a massive amount of housing off the market in order to prop up the sales and letting market .Clancy quay in Dublin is just one example 400 units complete ,sitting empty for 4 years rental Value 1150 euro per month Dublin is flooded with such developments.
Joseph ,
I think I will just vote for you. It really is a buggins’ choice isn’t it? No really great leadership from anywhere just when we need it.
AndrewSB49 ,
This IS all your own opinion and not written by Fine Gael with the word-proofing done by Fianna Fail!
David Quaid ,
Terrific post Ronan – so clear and well summarised. Rather than state that the biggest spends have to be cut, you quantify how much they actually are and why you think they should be cut.
Why can’t politicians do this?
Dublin South Central: Who Gets Your Vote? | Drimnagh is Good ,
[…] the second one is from Ronan Lyons who took it step further and scored the main parties out of five on each of the economic policy headings. This post from Ronan is quite detailed & you will need some time to sit & read what he has […]
Maura Fenlon ,
Thanks Ronan, so clear, concise, and really well structured.
Ronan Lyons ,
Hi all,
Thanks for the comments. Readers interested in this might also find this in-depth treatment of taxation by PWC interesting:
http://www.pwc.com/ie/2011irishelection
Ronan.
Rory ,
Re SF comment above. The reason we are at 9% instead of less is that we are carrying the bank debt as sovereign debt. I have yet to hear anyone tell me that they have asked bond holders, buyers in Beijing, NY, London etc what they would charge if we refused that debt. Can you tell me? That is the real question that has not even been addressed. Just pooh poohed by FF, FG, Lab etc saying we will have no money if we don’t accept the deal. GO ASK FFS!
MichaelG ,
As the amount outstanding to bondholders is reducing all the time I think we need to look at what Bondholders were paid off and how much they were paid since the Bank guarantee was given in September 2008. Prior to the guarantee bonds were severely discounted on the secondary markets but became whole again at the announcement of the guarantee.
The discounts prevailing in Sept 2008 should applied to the bonds redeemed in full to date and this amount should be discounted against the EFSF fund allocated to Ireland. The ECB should pick up the tab for this amount as they were totally remiss in their oversight of Irish banks. This would be the equivalent of renegotiating with the bondholders retrospectively without burning them: The ECB should feel the pain instead!
Edmund Burke ,
You neglected to include Public Sector pay, which despite recent deductions is still about the highest in the EU, and completely at variance with pay in the real economy, especially at the lower pay grades.
Anthony Murphy, now with the Fed in Dallas did a lot of work a couple of years back in a review of Benchmarking 2.
Shane Dempsey ,
Good analysis but I’ve a different perspective on some of what you suggest.
A graduate tax is more problematic than a non-recourse student loan scheme. The former could simply incentivise people to leave Ireland, taking their expensive education with them. We need graduates and we need them to be more cognizant of the true burden of their education on the tax payer but I’d prefer the amount “up fronted” rather than subject to another tax that may have perverse incentives and be manipulated by future governments.
I presume SF would just not pay back any of the various bank debts (oustanding bonds, promisory notes, recapitalisation money etc.) Obviously there’s a whiff of populist anarchy about this but the lesson from Iceland is that the more debt we can dump and the more favorable terms we can get on the outstanding amount, the faster our gov bond rate will drop. I presume SF aren’t admitting that in the short term this would threaten the jobs of the entire public sector but everything is negotiable. A referendum would go a long way to creating an impasse for O. Rehn and co. and provide us with a big stick to negotiate with. Outside Germany, most investment bankers don’t care if the ECB donates the cost of the outstanding bondholders. This may look like burning the ECB but it’s just forcing it to act like a central bank.(As MichaelG points out above) It actually makes Ireland’s “management team” look smarter and the country a better bet. We also have many many Chinese investors who view distressed economies like Ireland as a great way to enter the European market. It’s already underway with some smallish projects in Athlone but I’ve been reliably informed there’s significant Chinese investment available even for initiating large but potentially repeatable engineering projects like Spirit of Ireland. Just requires a political will and the nerve to upset the EU. Economic recovery often requires bold and unpalatable moves, beyond just taxing everyone to oblivion.
The MC Hammer approach: Ireland’s new Programme for Government | Ronan Lyons ,
[…] Browse in Irish Economy « Scoring the General Election manifestos on economic policy […]
Brian Sammon ,
Me thinks we should see a Summer Report Card; how would you peg the aggregate score for FG and Labour in these subjects?