13/03/2016
It's not surprising that people are disenchanted with politics and politicians. Looking at the behaviour of all the recently elected TDs, particularly the two biggest parties, can only lead to the conclusion that they are all hypocrites. After the election, all the talk was about "listening to the people" and 'hearing the message" from the electorate. Now we're off on another red herring - 'Dáil Reform', according the Fianna Fáil and Fine Gael. This is the same Fine Gael that spent 5 years in government, promised to reform politics in Ireland and did nothing, except make a mess of abolishing the Seanad.
The issue here is not about Dáil reform or reforming the political system. It's about trying to do the things that people want i.e. solving problems. The issues are well known - Housing Crisis, Health Crisis, Poverty, Living Wages etc. At a European level, the refugee crisis is tearing the heart out of the EU and the majority of people want to see a solution, with at least some humanity shown to the people suffering under appalling conditions in Greece and other countries.
It can be assumed that all politicians agree that these issues need to be dealt with. So why can't 158 elected representatives apply their collective grey matter to tackle these problems, particularly the national ones? Take each issue one at a time. Devise a plan, identify the obstacles to solving the problem, work out ways to overcome these obstacles and implement the plan. Housing is a problem - build more affordable houses. In the past councils and corporations built houses for rent so why can't that happen now. What is stopping it and what needs to be done to start it up again? The same should apply with the health service and the other issues.
It's ironic to think how both Fianna Fáil, Fine Gael and the Labour Party were prepared to 'jump through hoops of fire' to raise money to pay bondholders who gambled on reckless banking practices, yet they bicker and squabble among each other when it comes to dealing with the problems of the people they are "listening to". The same urgency should be shown when it comes to raising money to fund these social problems. Dáil reform will not be necessary if the politicians elected to it do what the people who put them there are asking them to do. After all, that's supposed to be the purpose of a national parliament - to act in the interests of the people it represents. However, taking into consideration the current navel-gazing and soul-searching of the main political parties, it's hard to imagine that representing the people who elected them is foremost in their minds. And the real killer is that most of them don't even realise that's exactly what they were elected to do.
05/03/2016
Now that the election is over, it is plain to see that Ireland has followed Greece, Portugal and Spain in rejecting pro-austerity governments. So much for Ireland being the 'poster boy' of Europe and its policies.One of the key issues of the election was water charges and the establishment of Irish Water. This was very badly handled from day 1 and previous experience in relation to water taxes should have warned politicians about the sentiment of Irish people when it comes to paying for water. After all, it never seems to stop falling out of the sky here.
That said, caution needs to be exercised by those declaring a victory over water taxes. A glance at any newspaper and the comments of the two main political parties, Fine Gael and Fianna Fáil, show that the spin has already started. Both parties are talking about the charges continuing following a review, while Fianna Fáil is in favour of abolishing Irish Water. Representatives of neither of these parties have mentioned privatisation. Water charges have now been introduced by Fianna Fáil in the past and by Fine Gael in 2015 it can be assumed that both support this measure. However, a crucial issue is whether it will be privatised in the future!
As regards privatisation, there is one simple question - who gains? The answer is the owners of a privatised water company. Private water companies make billions in profits by charging for water. It seems that the real issue is which party's political cronies will be given the largesse? Why can't the government take on the responsibility of providing a very basic human need, invest taxes in water infrastructure and see a return to the exchequer from a fair charging system? The original reason put forward for water charges was conservation, but that's no longer on the agenda, as people do not pay for the amount used.
Irish Water was created for national balance sheet manipulation i.e. to keep its borrowings off the national debt. This failed due to the 'low charges', which according to the EU was direct subsidisation from the government. This is the bottom line here - don't add to the national debt. No problem adding to the national debt to buy an election but not so in relation to a basic human requirement. The government could have (and should have) invested in water infrastructure after years of neglect but in order to keep the borrowing off the national debt, a 'vehicle' had to be created - Irish Water. Fine Gael was ambiguous, to say the least, about the future plans for the privatisation of Irish Water and the Labour Party was virtually silent. The Labour Party misread the mood of the population and spurned an opportunity to save itself by opposing water charges in government when things began to get out of control. This would have brought down the government but probably saved the Party from the wipeout it received in the election.
In conclusion, the priority is to legislate, by way of a constitutional amendment if necessary, that the privatisation of water will never happen in Ireland. If privatisation is off the agenda, then a rational debate can take place, in the context of overall tax policy, about how to fund water infrastructure into the future in Ireland.
Saturday, 5 March 2016
Friday, 5 February 2016
General Election 16
17/02/2016
The outgoing coalition government composed of Fine Gael and the Labour Party were using the 2016 budget of tax cuts and 'stable' government' as a platform for re-election. However, this tactic has not worked and both parties have been losing support in recent polls. The strategy is now changed to frightening people and 'enterprising' Richard Bruton is out of the traps early comparing Ireland and Greece (see article below). One must question if there is some problem within Fine Gael with Greece. Michael Noonan has previously made disparaging remarks about Greece and failed to support debt relief for the Greeks. Now Richard Bruton, along with Enda Kenny is trying to scare Irish people that Ireland will suffer like Greece if Fine Gael and Labour are not re-elected. People weren't taken in by the stability platform and hopefully they won't be scared into voting for a return of the coalition. For the most part, politicians are powerless anyway when it comes to running the country, so it hardly matters at a macro level who is governing the country but voters should try to elect people with some sort of social conscience and public service ethos, unlike the previous group of mercenaries that were in government.
http://www.independent.ie/irish-news/election-2016/rightcol/irelands-way-or-greeces-way-bruton-warns-voters-34460723.html
08/02/2016
I don't remember agreeing with Fianna Fáil on any issue but I agree on this. The abolition of the Universal Service Charge (USC) will favour the higher-paid by putting more money in their pockets and the higher their earnings the more they will save. Unlike people on lower wages, who will spend any extra income and increase domestic consumption, wealthier people will, more than likely, spend extra income on foreign holidays or imported goods. It looks like Fianna Fáil is 'changing tack', as mentioned below (07/02/2016) but walking the walk is different than talking the talk. Most people are aware that promises made during an election campaign are seldom honoured.
http://www.independent.ie/irish-news/election-2016/fine-gaels-plan-to-abolish-the-usc-favours-the-rich-fianna-fil-claim-34434185.html
07/02/2016
It looks like Enda Kenny was wrong about people's lack of economic knowledge. According to a report in today's Irish Independent, people want the problems in Ireland sorted out rather than tax cuts. It is obvious that for the majority of the workforce in Ireland, tax cuts don't add up to much but proper hospital care, housing, education and other social services will save them more money than they would gain from cuts to income tax. The Taoiseach's mantra about cutting taxes and 'jobs that pay' is being exposed for what it is - a catchy soundbite. It will be interesting to see if the main political parties change tack and actually come up with solutions to the country's problems. The government bears the responsibility to tackle the social problems facing Ireland and Fine Gael policy abdicates that responsibility. Deal with the issues rather than throw a few crumbs to working people in the form of money borrowed on our behalf. A few tax cuts and the creation of a low-wage jobs environment is not what Ireland needs or wants.
http://www.independent.ie/irish-news/election-2016/parties-are-told-fix-our-country-before-tax-cuts-34430071.html
06/02/2016
The parties that made up the last government, Fine Gael and the Labour Party are running again jointly on a platform which emphasises stability and continuing growth. Yet today we read of two contradictory proposals from the members of the 'stability stable'. Firstly, Fine Gael has "abandoned plans for balanced budgets" (see article below), while on the other hand, the Labour Party are promising to prioritise paying off the national debt over the next five years. How the national debt can be paid off while continuing to borrow money is difficult to explain but no explanation is necessary because according to Enda Kenny, ordinary people don't know anything about economics.
http://www.independent.ie/irish-news/election-2016/we-wont-let-national-debt-overwhelm-us-again-joan-burton-34428406.html
06/02/2016
Fine Gael (FG), the zealots of prudence, have decided to delay the process of balancing the budget, citing the new buzzword expression 'fiscal space'. It seems the EU have relaxed the rules related to how much a country can spend, in relation to tax intake. As noted earlier, the tax intake is already questionable as there have been significant increases in taxes received from foreign multi-national corporations. It has already been pointed out by the Fiscal Advisory Council (FAC) that this income is uncertain into the future and should not be used as guaranteed income for budgetary planning. The FAC has also commented negatively on the government's plans in the run up to the last budget. The FAC's role is to comment publicly on the government's budget planning and whether or not it is meeting its stated objectives.
http://www.fiscalcouncil.ie
The bottom line here is that, if elected, Fine Gael will borrow even more money in order to fund tax reductions. Reducing income tax for people on high incomes benefits them to a far greater extent than those on lower incomes, so the net effect is that the wealthy benefit greatly and the cost is imposed on everyone because it's added to the national debt. Of course, anyone outside the tax threshold gets no benefit from tax reductions but they suffer the consequences due to lack of investment in public services. Borrowing might be acceptable if it were going to to used to invest in infrastructure or tackle the many problems in Ireland, for example, the health service. The average worker would not mind paying taxes if public services were improved. This is borne out by the acceptance of the 1% employment levy imposed during the economic crisis of the 1980s. However, for tax income to be used to pay interest on borrowings used to fund tax reductions, which mostly benefit the wealthy, is nothing short of robbery.
http://www.independent.ie/irish-news/election-2016/fine-gael-abandons-plans-for-balanced-budget-34425672.html
05/02/2106.
The outgoing coalition government composed of Fine Gael and the Labour Party were using the 2016 budget of tax cuts and 'stable' government' as a platform for re-election. However, this tactic has not worked and both parties have been losing support in recent polls. The strategy is now changed to frightening people and 'enterprising' Richard Bruton is out of the traps early comparing Ireland and Greece (see article below). One must question if there is some problem within Fine Gael with Greece. Michael Noonan has previously made disparaging remarks about Greece and failed to support debt relief for the Greeks. Now Richard Bruton, along with Enda Kenny is trying to scare Irish people that Ireland will suffer like Greece if Fine Gael and Labour are not re-elected. People weren't taken in by the stability platform and hopefully they won't be scared into voting for a return of the coalition. For the most part, politicians are powerless anyway when it comes to running the country, so it hardly matters at a macro level who is governing the country but voters should try to elect people with some sort of social conscience and public service ethos, unlike the previous group of mercenaries that were in government.
http://www.independent.ie/irish-news/election-2016/rightcol/irelands-way-or-greeces-way-bruton-warns-voters-34460723.html
08/02/2016
I don't remember agreeing with Fianna Fáil on any issue but I agree on this. The abolition of the Universal Service Charge (USC) will favour the higher-paid by putting more money in their pockets and the higher their earnings the more they will save. Unlike people on lower wages, who will spend any extra income and increase domestic consumption, wealthier people will, more than likely, spend extra income on foreign holidays or imported goods. It looks like Fianna Fáil is 'changing tack', as mentioned below (07/02/2016) but walking the walk is different than talking the talk. Most people are aware that promises made during an election campaign are seldom honoured.
http://www.independent.ie/irish-news/election-2016/fine-gaels-plan-to-abolish-the-usc-favours-the-rich-fianna-fil-claim-34434185.html
07/02/2016
It looks like Enda Kenny was wrong about people's lack of economic knowledge. According to a report in today's Irish Independent, people want the problems in Ireland sorted out rather than tax cuts. It is obvious that for the majority of the workforce in Ireland, tax cuts don't add up to much but proper hospital care, housing, education and other social services will save them more money than they would gain from cuts to income tax. The Taoiseach's mantra about cutting taxes and 'jobs that pay' is being exposed for what it is - a catchy soundbite. It will be interesting to see if the main political parties change tack and actually come up with solutions to the country's problems. The government bears the responsibility to tackle the social problems facing Ireland and Fine Gael policy abdicates that responsibility. Deal with the issues rather than throw a few crumbs to working people in the form of money borrowed on our behalf. A few tax cuts and the creation of a low-wage jobs environment is not what Ireland needs or wants.
http://www.independent.ie/irish-news/election-2016/parties-are-told-fix-our-country-before-tax-cuts-34430071.html
06/02/2016
The parties that made up the last government, Fine Gael and the Labour Party are running again jointly on a platform which emphasises stability and continuing growth. Yet today we read of two contradictory proposals from the members of the 'stability stable'. Firstly, Fine Gael has "abandoned plans for balanced budgets" (see article below), while on the other hand, the Labour Party are promising to prioritise paying off the national debt over the next five years. How the national debt can be paid off while continuing to borrow money is difficult to explain but no explanation is necessary because according to Enda Kenny, ordinary people don't know anything about economics.
http://www.independent.ie/irish-news/election-2016/we-wont-let-national-debt-overwhelm-us-again-joan-burton-34428406.html
06/02/2016
Fine Gael (FG), the zealots of prudence, have decided to delay the process of balancing the budget, citing the new buzzword expression 'fiscal space'. It seems the EU have relaxed the rules related to how much a country can spend, in relation to tax intake. As noted earlier, the tax intake is already questionable as there have been significant increases in taxes received from foreign multi-national corporations. It has already been pointed out by the Fiscal Advisory Council (FAC) that this income is uncertain into the future and should not be used as guaranteed income for budgetary planning. The FAC has also commented negatively on the government's plans in the run up to the last budget. The FAC's role is to comment publicly on the government's budget planning and whether or not it is meeting its stated objectives.
http://www.fiscalcouncil.ie
The bottom line here is that, if elected, Fine Gael will borrow even more money in order to fund tax reductions. Reducing income tax for people on high incomes benefits them to a far greater extent than those on lower incomes, so the net effect is that the wealthy benefit greatly and the cost is imposed on everyone because it's added to the national debt. Of course, anyone outside the tax threshold gets no benefit from tax reductions but they suffer the consequences due to lack of investment in public services. Borrowing might be acceptable if it were going to to used to invest in infrastructure or tackle the many problems in Ireland, for example, the health service. The average worker would not mind paying taxes if public services were improved. This is borne out by the acceptance of the 1% employment levy imposed during the economic crisis of the 1980s. However, for tax income to be used to pay interest on borrowings used to fund tax reductions, which mostly benefit the wealthy, is nothing short of robbery.
http://www.independent.ie/irish-news/election-2016/fine-gael-abandons-plans-for-balanced-budget-34425672.html
05/02/2106.
The general election will be held in Ireland on February 26th. The political parties and independents will be announcing their manifestos and plans over the next few days. However, the main questions are; will any party deliver on its promises, or to what extent will they fulfil the measures outlined in their election promises? Are the proposals contained in the various manifestos what Ireland needs?
The Taoiseach (Prime Minister) was interviewed on RTE radio this morning and it would not inspire confidence about the future of Ireland if the current government is returned to power. His basic message is to keep the economy growing, providing jobs that 'pay' and the benefits will cascade down to everyone. It is widely acknowledged that external factors, such as the price of oil, low interest rates and QE by the ECB, have been the main reasons for Ireland's recovery. These benefits, coupled with the high rate of sterling vs the Euro have helped Irish exports to the UK, our main trading partner, as well as worldwide. Taxes received from foreign multi-nationals have also seen a dramatic increase in 2015, perhaps due to more scrutiny by the EU or more sinister, their efforts to return this government to power.
Nevertheless, this government has been in power for five years and has failed to address some serious issues facing Irish society. Firstly, there is the health service, which has deteriorated during the tenure of this government. One of Fine Gael's key election promises was 'universal health care' but the government now admits that this could never have happened under the plans proposed by Fine Gael. Reform of the education system is another area, particularly the pupil-teacher ratio, which was to be reduced over time. It could be argued that the government 'inherited' these problems but other issues emerged during its term in office.
Firstly, there is the housing crisis. This is a direct result of government policy to repair bank balance sheets by driving up the cost of houses. Houses are now unaffordable to people on average incomes, unlike in the past, when anyone in a steady job could aspire to own their own house. The core tenet of Enda Kenny's interview was about growing the economy and creating jobs 'that pay'. Leaving Cert economics students would be aware that if you drive economic development, you have to have the infrastructure e.g. housing, public transport, an energy policy etc. to complement this growth but these are all conspicuous by their absence. Enda's talk about jobs that 'pay' does not seem to mention a living wage and instead we have all the issues facing employees related to part-time work, zero-hours contracts and the continuous pressure to dilute employees benefits and entitlements. In relation to employment we are entering the area of "there are 5 jobs for everyone in Ireland and I've got 3 of them".
Another problem of the government's own making is the proposal to charge for water. This is an example of a 'blank page', planned and designed by this government and we can see the results. Irish Water is a total catastrophe, whatever way you look at it. The introduction of property tax was another unmitigated disaster, where the government had to involve the Revenue Commissioners in order to force people to pay this tax. Incidentally, both government parties opposed property tax prior to being elected.
The real problem with this government, and governments in general, is the low tax policy. Firstly low taxes facilitate employers by allowing them to keep wages low, peddling the idea that take-home pay is good in relation to gross pay. This ignores all the stealth taxes that have been introduced by the government. Jobs can then be created with poor pay and conditions, on the basis of being competitive, and cost savings go towards profits. The government will then at the same time claim to be solving the unemployment problem. However, there is a disconnect between this policy and the government's role in providing public services, such as education and healthcare. Many people are on comparatively low pay, are living hand-to-mouth and can't afford to pay for a house or healthcare, things associated with a civil society. There is a severe shortage of housing and no social housing to speak of resulting in exorbitant rents. The combination of low pay and reduced tax intake suggests that the government will never be able to provide decent public services and will have to continue borrowing to pay for the day-to-day running of the country. If the government had a progressive tax system, reductions in take-home pay due to higher taxes would drive wage growth, resulting in business paying its fair share. Wage growth also has a knock-on effect on inflation, lack of which is one of the problems facing many countries worldwide.
Voters need to become more aware of the way the country is being run and not get taken in by soundbites about tax reduction or the type of handouts being bandied about in the run up to polling day. It's ironic that billions of Euros have been 'found' in election year after all the cuts, extra taxes and charges of the past five years. Politicians seems to be past-masters at spending the money they borrow on our behalf but who benefits?
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