Reaction to the emergency Budget
Madam, – If Ireland were a plc that benefited from a windfall sale of property during our recent boom and went on to reinvest the proceeds foolishly, its CEO and board of directors would by now have been removed from office.
If Ireland were a rugby club that persisted in spending its lottery windfall on paying for its members to follow Munster or Leinster to Heineken Cup matches around Europe, it would be rightly reprimanded and its committee would most likely be voted out.
If Ireland were a third-level student who spent his maintenance grant in the university bar we would say tut-tut, and show no sympathy.
In this island nation of ours we assumed that the windfall revenue from the property boom would continue forever. We used the proceeds of the boom to further fuel the cycle, to spend foolishly on gold-plated quangos and finally we became drunk on self-congratulation, self-confidence and delusion.
The time has now come for the responsible committee /board/ CEO/individual/government to do the right thing by resigning.
How can this Government, which has had to deliver the most drastic budget in the history of the State, continue to stand without putting its record to the people for ultimate judgment? – Yours, etc,
Madam, – I can understand Stephen Kearon’s resentment towards people “who have never worked and have no intention of doing so” (April 7th). But how does he propose identifying these people?
During the last recession, it stung to see people getting more on the dole when they qualified as long-term unemployed – a bonus I could never earn, since I took whatever work was out there as and when it was available. But that didn’t make me the good guy and them the bad guys.
I had left school aware of the recession and graduated into it, choosing not to emigrate and understanding the consequences of my choice. I had no children and no responsibilities other than myself.
Some of those who became the long-term unemployed were people who had believed themselves secure in their jobs and their ability to take care of their families. They found themselves suddenly redundant, (a confusing and depressing experience, no wonder some of them were paralysed), without any prospect of finding the kind of job they had come to expect. Some people never recovered from that recession, but I’m certain that wasn’t their intention.
A downside of the temporary, often part-time, always low-paid work I did (besides regular, depressing re-signing at the dole office, a procedure that is trying the first time, but really annoying when you go through it a few times a year), was that I was on the lower PRSI rate, with little or no chance of earning a useful number of social insurance credits. On the upside, it kept my skills “current”.
Those newly experiencing redundancy quite rightly feel hard-done-by. But that doesn’t mean that everyone already on the dole is a chancer or never intends working again. There may not be new, permanent jobs within two years.
In the last recession, I was sick and tired of being encouraged to be an entrepreneur – I’m a hard worker, but don’t have an entrepreneurial bone in my body – however, I could respond to the labour market with flexibility and perseverance. I’ve children this time around, so my flexibility is limited, a large portion of my energy is already committed and my anxiety levels are far higher because I’m not responsible for solely my own welfare. I might well be one of those people who don’t recover from this recession due to my circumstances, though I don’t think so: I have every intention of weathering the storm.
There is nothing to be gained by demonising an intangible and possibly mythical “them”. If you need some focus for your frustration, fear and pain, why not target the Government whose (non-)regulation and (mis)management is undeniably partly responsible for this mess? That way you’re not creating phantom enemies for yourself. You can constructively vent your resentment on polling day – and for many polling days to come, if you wish. – Yours, etc,
A chara, – I am one of those awful creatures called landlords.
The fact I paid large amounts of stamp duty when purchasing property is neither here nor there. Management charges, annual charges, repairs, maintenance charges all include VAT and create employment, but never mind. This property which provided so much income for the Government has deteriorated rapidly in value over the past couple of years with considerable reductions in rents, but so what?
Only 75 per cent of interest is now allowed against rental income, but never mind. Levies are payable on rental income even if profits are not being made, and now we have the spectre of property tax looming like the sword of Damocles, but let’s not make a fuss.
I apologise for providing the Government with so much income and helping to create the Celtic Tiger which we all seemed to enjoy at the time. I deserve the financial punishment now being meted out with such abandon and I promise never, ever to make the same mistake again. – Is mise,
Madam, — As a non-resident Irish citizen living in Argentina it is rare that I voice an opinion on the Irish economy. While economic policy affects my family in Dublin directly, it has little effect on me personally. However, as an economist specialising in international finance, I would like to point out that Brian Lenihan’s plans to place the public sector in massive international debt to rescue speculative investments at home has a precedent here in Argentina.
It also has its effects, and these go on for decades. I have published studies on the nationalisation of private debt in 1982 and 1983 toward the end of the Argentine dictatorship. The junta used taxpayer money to pay off private debts owed by resident national and multinational corporations.
While the amounts, by any measure, were nowhere near as large as those proposed by Mr Lenihan, the measure was resisted.
Unfortunately, dictatorial control over the population kept its critics silent. The debt was taken on by the state and the Argentine people are still paying the cost in interest on debt payments. None of the benefits accrued by the corporations and their shareholders have ever been paid back.
No economic theory can commit a population of just over four million people to possible public debt obligations of over $100 billion (plus interest) especially as the world economy plunges into depression.
Like my family, many of your readers have a vote in Ireland. Unlike the Argentine population their voices can be heard and they can instruct the Irish Government to reject this plan now, before it is too late. It is not my place to suggest an alternate plan; this is a difficult nut to crack. But to submit the Irish people to decades of repayments is simply not feasible. Irish economists need to return to the drawing board, even if it means that their acquaintances in the building sector might feel the pinch. – Yours, etc,
A chara, – I abhor the Government’s decision to abolish the Christmas bonus to social welfare recipients. The move will be detrimental to our older citizens who paid their fair dues to society during their working years. The loss amounts to 2 per cent in the annual income for people on social welfare. Young people having to live on social welfare through no fault of their own will also be affected.
Why are the vulnerable being held responsible for the actions of the developers and investors, who reaped the rewards during the Celtic Tiger? Come Christmas, the loan sharks of Ireland will be gnawing at the doors of the vulnerable. – Is mise,
Madam, – Peter Sutherland is one of the outstanding Irish citizens of his generation. His contributions on Morning Irelandand the BBC are both welcome and enlightening. He is “standing up to the plate” and through his contributions is providing much needed leadership. Hopefully media commentators will take his comments on board so that in future we will see, hear and read more balanced contributions on television, radio and in the newspapers.
Politicians, of all persuasions, would benefit from adopting a similar approach to Mr Sutherland. – Yours, etc,
Madam, – A glaring omission from the Budget: the taxing of children’s shoes. – Yours, etc,
Madam, – Up and down the land people talk about how happy the banks must be to have their balance sheets cleansed by the National Asset Management Agency (Nama). I wish they would cleanse my own balance sheet while they are at it.
But the question remains. If a developer owes a bank two billion and Nama buys the loan for one million, what happens to the other one billion? Does the developer walk away scot-free with his or her liability reduced by one billion euro?
If this is the case, is this a reverse digout, an ordinary digout, or can any ex-taoiseach provide a new name for this arrangement? – Yours, etc,
Madam, – We are to believe that Fianna Fáil will now “pursue with vigour” its own friends and paymasters via the National Asset Management Agency. Sure they will.
We are to believe also that bargaining with the banks on the true worth of the assets they hold on behalf of their clients – which will almost certainly be done within the confines of the Four Courts – is better than nationalising them and acting in the best interests of the taxpayer.
Peter Bacon, speaking on RTÉ radio said nationalising the banks would result in problems being sorted “behind closed doors” rather than transparently.
What does that mean? It seems wiping the slate clean through nationalisation would be the most painful route for Fianna Fáil’s paymasters since they would certainly lose almost everything, while the taxpayer would suffer only what was absolutely necessary given that the Government would then have total control over all assets and loans and could presumably act in our best interests alone.
But, that’s never going to happen. Is it? – Yours, etc,
Madam, – The Budget from hell for the average taxpayer, but is it Nama from heaven for the Irish-owned banks? – Yours, etc,
Madam, – I wish to express a level of relief that at last there is an emerging consensus about the kind of tough decisions which we as a society will have to face during the next number of years. The public debate in recent months has largely and unfortunately been characterised by efforts to apportion blame for our economic downturn, rather than focus on solutions to the most complicated and potentially destructive economic downturn that anyone can recall.
Apart from the tax and expenditure changes announced on Tuesday, the Minister for Finance is making a serious attempt to address the continuing credit crisis which has been impairing well-run Irish business from operating on previously available lines of credit.
While most informed commentators accept that the origin of the international financial fracture was the collapse of the sub-prime lending sector in the United States in 2007, the cause of the continuing volatility has been the remaining bad credit in the system in the form of impaired or unrealisable loans against their original asset value.
The markets have been signalling for many months that they don’t accept the health of Irish banks and by extension their capacity to access and raise adequate funds on in interbank markets for the purpose of facilitating lending back into this economy.
The decision to get the bad credit off the books of the banks and into the hands of the NTMA, who have managed our national debt down to a significantly lower proportion of our national income than many other EU states, is a good one.
With the bad credit out of the system, and an adequate level of capital investment by the Government, the health of the banks will have significantly improved in advance of an upturn when it comes.
The immediate hope is that the banks will improve credit lines to companies which are experiencing tightening credit and longer payment periods that lead in many cases to cash flow difficulties.
There is much to be done on the budgetary and economic front in terms of shifting the focus of economic expansion and development away from property and into productive venture capital based initiatives. But we have made a good start. – Yours, etc,