Gross and Net Pay Chart in Ireland 2012
The chart below compares gross and net pay in Ireland across different levels earnings from €5,000 through to over €100,000. The blue columns are gross earnings and the red columns represent the corresponding 2012 take home pay. The calculations are based on a single earner with standard employee and PAYE tax credits. Some points to note – earners only begin paying tax around €11,000. The effective tax rate only reaches 20% at €35,000 gross earnings. The marginal tax rate is 52% for all earnings over €36,000. Someone working full time on the minimum wage pays about 4% tax.
Click to enlarge.
Defined Benefit Pensions Are Dynamite
The idea of promising today to pay someone a percentage of their average lifetime earnings when they will be due to retire in 30 years from now is absurd. Firstly, we don’t know what their average lifetime earnings will be and secondly, we don’t know if the underwriter will be capable of paying out in 30 years time. These types of pensions can only end in disappointment. As it is usually the State that provides these types of pensions to State employees, the seriousness of this issue hasn’t become fully apparent yet – but it will. In years to come there will be a huge public sector pensions crisis when the huge numbers at work today will be retiring.
Household Charge Should Subsidise Commercial Rates?
With unemployment static at over 14% for nearly 2 years now and the business sector, particularly local retail, still very weak, the household charge offers a good opportunity for local councils to lay off on commercial rates. If the household charge is here to stay (for the record, I’m against it completely), then city and county council’s should take this opportunity to reduce their dependence on businesses and make a serious dent in cutting property rates. They should spread the burden of providing services across households and businesses. At the moment, the largest share of local authority budgets are shouldered by businesses through rates.
Price of Petrol and Diesel in Ireland – 1991 to 2012
Here’s a simple chart showing the prices of a liter of petrol and diesel since October 1991 when compared to the official CPI. The prices are in euro cent and were sourced from the AA Ireland website. The CPI data was taken from the CSO. It is interesting to note that until mid 2009, motor fuel in Ireland was relatively cheap compared to other costs of living. Since then it has increased dramatically and has remained above the CPI line.
One Year Since #GE11
Yesterday marked the 1 year anniversary of one of the most decisive general elections in the history of the Irish politics, especially since 1932 at least. Fianna Fáil’s hegemony over Irish national politics was smashed to pieces, from winning 77 seats in 2007, the party returned a miserable 20 seats in 2011. Probably not since 1918 has there been such a dramatic drop in party support when the Irish Parliamentary Party were virtually wiped out. PR-STV and multi-seat constituencies saved Fianna Fáil last February, the result in other circumstances could have been total obliteration. All other parties enjoyed significant gains at Fianna Fáil’s expense. Labour nearly doubled their seats, Fine Gael were only a few short of a majority while Sinn Féin managed to have an unprecedented 14 TDs elected. We also saw the rise of a new far left grouping called the United Left Alliance who with only 5 TDs have certainly made their mark on Irish political life over the past 12 months.
Government Stimulus Plans Don’t Work
Government stimulus packages just don’t work. First of all, they increase national debt. National debt is a way of making future generations pay for spending today. And as we seen with countries like Greece, the more you borrow, the more it costs to fund that borrowing which creates a negative downward spiral. The opposite to debt is printing money, which just speeds up the effect of borrowing and discounts the current generation’s spending power and savings – put another way, if the economy is faltering and the Government inject some cash into it, your hard earned savings become less valuable.
SIPTU and National Children’s Hospital
SIPTU got permission to proceed with knocking Liberty Hall and replacing it with a building 50% larger. The same week, An Bord Pleanála refused permission for the desperately needed National Children’s Hospital. Yes, the State always knows best, without any suspicion of interference or undue influence. Our planners and councils are truly remarkable people. At a time when we’ve got patients lying in hospital corridors and also at a time when we’ve got a capital city with oodles of empty office space – at least we can depend on the State to make the right choice.
Privatisation in Ireland 2012
Why would the IMF support privatisation of Irish semi-states if it was, on a whole, bad for the Irish economy? Sure, some might argue that the IMF want their pound of flesh, regardless of how they get it, but that’s not how the IMF operates. If the long term disadvantages outweigh the short term benefit, privatisation wouldn’t be on the table. The IMF, as much as anyone, doesn’t want to be coming back here in 10 or 20 years time with another brief case full of cash to bail us out. That’s because privatisation is a good thing, and it yields long term, as well as short term advantages for the economy.
Second Greece Bailout Farce
The second Greece bailout is a bit of a farce. 160% debt/GDP isn’t sustainable for an economy that hasn’t got any growth prospects. Why would the EU overburden a malnourished economy? It’s counter productive. If Greece needed to be bailed out last year, widely missed all targets, needed an even bigger bailout again, then the EU is behaving in a strange sadistic manner. Let them default, let them exit the euro and let them survive on zero borrowings for a decade or so. It’s hard to say really who is worse, the EU or Greece at this stage. It’s like going in front of a judge for bankruptcy proceedings and the judge orders the lender to lend you even more money and to come back again in 6 months time. The Guardian newspaper has a nice summary of commentary here. My favourite line by some punter by the name of Elisabeth Afseth: ”It’s a bit like a game of tennis: two sets down and the opponent has three match points in the third. Greece just got back to deuce.”
Not Another Government Jobs Plan!
Earlier this week the Government announced (yet again) another “jobs plan”. This time they pledged to create 100,000 new jobs (that was later paraphrased by a member of Government as a net increase of 100,000 jobs) by 2016. That’s a pledge to increase employment by an average of 57 jobs per day by the end of 2016. Seems like a lot, but it is about 5.5% of the current number employed in Ireland. I like this target, and Governments should be no different to anyone else and they should set themselves targets. However, let’s not fall further into the illusion that the Government has a hand in directly creating jobs, or let’s not fool ourselves into believing that Enda Kenny and Eamon Gilmore are in fact the primary drivers of job creation in the economy!