New Property Tax Rumoured

[Bogball XV]

I would normally defend unions but we are about to have the only chance at saving the country's finances scuppered by the unions in the Partnership talks.

We are all overpaid. There I said it. Ireland needs to cut it's wage bill urgently or we will see our standard of living go way back to the early 1990s. There would be serious repurcussions if that happened, not least inability to pay mortgages, but unfortunately it has to happen.
All the partners know this but union leaders couldn't possibly deliver a pay cut to their members so instead we will get a huge tax hike. The problem with that is that it only targets the 25% or so of the population that already pay most of the tax. It still leaves our wages too high on international comparisons and means we will not only be unable to attract foreign investors/multinationals but we wont be able to hang on to what we have.

That means more jobs lost and a bigger bill for the exchequer and even more tax hikes for what will be the increasingly hard pressed 25% funding everything.

I would love to see a deal (pie in the sky I know) whereby the government take responsibility for a percentage of primary mortgages (say reduce everyones primary mortgage by 20% by getting the nationalised Anglo to take on the debt). As part of the deal the entire public sector would take a pay cut of 20% and the private sector would be pressurised to do the same. That way we might have some chance to keep people in jobs and also help them keep their houses.

That's the crux of the matter imo and if only more people could see it we'd maybe have a chance of keeping the ECB/IMF from having to bail us out, given our dependence on the rest of the world and lack of indigenous industries and resources we have to make oursleves competitive in the worldwide labour market again.
Regarding your mortgage bailout suggestion, I think that eventually some scheme to help homeowners will have to be introduced, a failure to do so will not be feasible in the long run imo.

The banks can't take the pain Rossfan, they're practically insolvent as we speak and will need an extra 20BN this year alone just to survive.

[orangeman]

I would normally defend unions but we are about to have the only chance at saving the country's finances scuppered by the unions in the Partnership talks.

We are all overpaid. There I said it. Ireland needs to cut it's wage bill urgently or we will see our standard of living go way back to the early 1990s. There would be serious repurcussions if that happened, not least inability to pay mortgages, but unfortunately it has to happen.
All the partners know this but union leaders couldn't possibly deliver a pay cut to their members so instead we will get a huge tax hike. The problem with that is that it only targets the 25% or so of the population that already pay most of the tax. It still leaves our wages too high on international comparisons and means we will not only be unable to attract foreign investors/multinationals but we wont be able to hang on to what we have.

That means more jobs lost and a bigger bill for the exchequer and even more tax hikes for what will be the increasingly hard pressed 25% funding everything.

I would love to see a deal (pie in the sky I know) whereby the government take responsibility for a percentage of primary mortgages (say reduce everyones primary mortgage by 20% by getting the nationalised Anglo to take on the debt). As part of the deal the entire public sector would take a pay cut of 20% and the private sector would be pressurised to do the same. That way we might have some chance to keep people in jobs and also help them keep their houses.

That's the crux of the matter imo and if only more people could see it we'd maybe have a chance of keeping the ECB/IMF from having to bail us out, given our dependence on the rest of the world and lack of indigenous industries and resources we have to make oursleves competitive in the worldwide labour market again.
Regarding your mortgage bailout suggestion, I think that eventually some scheme to help homeowners will have to be introduced, a failure to do so will not be feasible in the long run imo.

The banks can't take the pain Rossfan, they're practically insolvent as we speak and will need an extra 20BN this year alone just to survive.

Between these 2 posts I think we can move forward. Let the govt pay part of the mortgage say 25% but bring the wages level down by the same and we might be getting somewhere.

[Rossfan]

[

The banks can't take the pain Rossfan, they're practically insolvent as we speak and will need an extra 20BN this year alone just to survive.

And the taxpayer is to borrow €20bn from....... who exactly ... to give it to "insolvent" banks,one of which ,AIB, claims to have plenty of money.
We're told the goverment is facing a 15bn shotfall this year yet they are expected to come up with another 20bn for banks who misbehaved.

[Rossfan]

[ Let the govt pay part of the mortgage say 25% ...

Where will they get the money to do so --they are already spending €15bn more than they are getting in.

[Bogball XV]

[

The banks can't take the pain Rossfan, they're practically insolvent as we speak and will need an extra 20BN this year alone just to survive.

And the taxpayer is to borrow €20bn from....... who exactly ... to give it to "insolvent" banks,one of which ,AIB, claims to have plenty of money.
We're told the goverment is facing a 15bn shotfall this year yet they are expected to come up with another 20bn for banks who misbehaved.

Admittedly it is unpalatable, but what else can we do?  Afaik AIB, Anglo and BOI have to find 22bn this year to repay short term borrowings that will become due - the worldwide capital markets are hardly going to provide these funds, so the govt will have to try and borrow them from somewhere.  These funds were of course lent out to inflate further the bertie bubble.

[muppet]

[

The banks can't take the pain Rossfan, they're practically insolvent as we speak and will need an extra 20BN this year alone just to survive.

And the taxpayer is to borrow €20bn from....... who exactly ... to give it to "insolvent" banks,one of which ,AIB, claims to have plenty of money.
We're told the goverment is facing a 15bn shotfall this year yet they are expected to come up with another 20bn for banks who misbehaved.

Admittedly it is unpalatable, but what else can we do?  Afaik AIB, Anglo and BOI have to find 22bn this year to repay short term borrowings that will become due - the worldwide capital markets are hardly going to provide these funds, so the govt will have to try and borrow them from somewhere.  These funds were of course lent out to inflate further the bertie bubble.

There are those who believe not a single Irish bank will avoid nationalisation.

Rossfan, apportioning blame and saying hands off is what we do best. But this time it will wipe us out.

[blast05]

That's the crux of the matter imo and if only more people could see it we'd maybe have a chance of keeping the ECB/IMF from having to bail us out,

The IMF bailing us out is a bit of a myth that is not founded on facts.
The National Treasurey Maangement Agency (NTMA) which includes the National Pension Reserve Fund (NPRF) has cash and fairly easily liquidafiable assets of slightly over 40 billion. The NPRF was valued at ~18 billion at the end of 2008 (very little property in this portfolio). The NTMA itself issued bonds worth 20 billion in the last 3 months of 2008 (a brilliant piece of work by public sector workers given how much more diifcult it is now to raise such money on the bond markets - credit wheres its due) which the department of finance are beginning to start using to run the country on a day to day basis. Throw in a few billions in foreign soverign debt in the shape of government bonds that we own - mostly a couple of billion of Italian bonds as far as i can recall - and you end with 40 odd billion.
The 20 billion cash that the NTMA have is not included in the calculation of national debt and thus our foreign debt is just shy of 51 billion - about 30% of GDP - its about 46% if you include the 20 billion cash of NTMA money. The European debt average is in the high 60's

So, theoretically, the banks could be fully nationalised with the anticipated 20 odd billion of bad debts taken care of and the country could continue to be run without any change in public spending and at the end of the year, the national debt would still be over 20% below the European average.

However, all is not good, unless we can deliver 2 billion in savings tomorrow and 4 billion in next Decembers budget, then it will be extremely difficult to sell any more bonds issued by the government

[muppet]

Blast, what will we do next year?

[stephenite]

I want, nay demand that Lone Shark comes in and tells us how to fix all of this.

[blast05]

Blast, what will we do next year?

Presuming we can deliver the required 2 billion in savings this year and another 4 billion are factored in for 2010 in next Decembers budget, then i think that would instill sufficient confidence in the bond markets to ensure we will have buyers for our bonds next year (albeit of course the NTMA will not wait until then). This i suppose is all dependent on the banks not having anything more than say 20 billion in bad debts that the government has to cover.
But i certainly ain't an econmist and could be talking through my ar*e 

[Bogball XV]

That's the crux of the matter imo and if only more people could see it we'd maybe have a chance of keeping the ECB/IMF from having to bail us out,

The IMF bailing us out is a bit of a myth that is not founded on facts.
The National Treasurey Maangement Agency (NTMA) which includes the National Pension Reserve Fund (NPRF) has cash and fairly easily liquidafiable assets of slightly over 40 billion. The NPRF was valued at ~18 billion at the end of 2008 (very little property in this portfolio). The NTMA itself issued bonds worth 20 billion in the last 3 months of 2008 (a brilliant piece of work by public sector workers given how much more diifcult it is now to raise such money on the bond markets - credit wheres its due) which the department of finance are beginning to start using to run the country on a day to day basis. Throw in a few billions in foreign soverign debt in the shape of government bonds that we own - mostly a couple of billion of Italian bonds as far as i can recall - and you end with 40 odd billion.
The 20 billion cash that the NTMA have is not included in the calculation of national debt and thus our foreign debt is just shy of 51 billion - about 30% of GDP - its about 46% if you include the 20 billion cash of NTMA money. The European debt average is in the high 60's

So, theoretically, the banks could be fully nationalised with the anticipated 20 odd billion of bad debts taken care of and the country could continue to be run without any change in public spending and at the end of the year, the national debt would still be over 20% below the European average.

However, all is not good, unless we can deliver 2 billion in savings tomorrow and 4 billion in next Decembers budget, then it will be extremely difficult to sell any more bonds issued by the government

If we have 40Bn that's good news, I thought I read recently that the NRPF had 8Bn in liquid assets though, which is why initially the govt were trying to get foreign consortiums to come in and bail out the banks - i don't know either way though.
I know you say later on that everything depends on 20Bn being the full bad debt loss, I think that's going to be drastically short though, I would at least double that figure and if we get away with that we'll be very lucky. 

[sammymaguire]

http://www.nytimes.com/interactive/2012/02/10/magazine/ireland-ghost-estates.html?ref=magazine

A little collage of pics which tells a sorry tale...