Tag Archives: savings

Postoffice

Economics Editor of RTÉ David Murphy has written a blog post explaining how the Government is shaping banks’s interests rates and those of An Post, via the National Treasury Management Agency, to effectively reduce people’s ability to save.

In his post, he writes:

“In 2001, former Finance Minister Charlie McCreevy introduced SSIA savings accounts in which the Government contributed €1 for every €1 from depositors. In those days the State wanted people to save more – but now as there is less disposable income it wants them to save less.”

“Keeping money on deposit has become much less rewarding as interest rates have been steadily lowered by the banks.”

“Unless an individual is prepared to put money away for ten years, a lump sum of €10,000 won’t get a return higher than 2.5% per annum.”

“The Government is jacking up the tax on interest from savings to 45% from next January. As a result many people will consider tax free savings in post offices.”

“The interest rates offered by at An Post are controlled by the National Treasury Management Agency – which is likely to cut the rates if it sees an avalanche of savers moving money from banks to post offices. It has cut the rates twice in the past year much to the relief of the banks.”

“Financial institutions use deposits to lend to consumers and businesses. For example if a bank pays a saver 2% and lends at 5%, the difference between the two figures is the bank’s profit.”

“Reducing the amount paid to depositors has been part of the banks’ strategy to return to profit.”

“The Department of Finance is also happy to see returns to depositors eroded.”

“It would appear that the officials in Merrion Street believe engineering an environment of low interest rates and high taxes will prompt consumers to release some of their savings – and if they spend more it will add to economic growth.”

Sigh.

Read the full blog post here.

THE DEPARTMENT of Health and drug manufacturers are close to a deal that could cut the State’s drugs bill by up to €400 million.

Yay!

Although the deal will save the HSE significant sums of money, its impact for consumers will be limited. This is because the prices of most generic drugs, which can range up to 94 per cent of those of their branded equivalents, are not affected.
The mark-up charged by pharmacists to private patients also remains unaffected. The prices Irish consumers pay for their medicines are among the highest in the world.

Oh.

Why trust one drug and not the other? That’s politics, innit?

State’s drug bill could fall by up to €400m under new deal (Paul Cullen, Irish Times)