Minister for Finance Paschal Donohoe
Last night.
Government Buildings. Dublin 2.
Minister for Finance Paschal Donohoe announced that tax revenues were down 18.6% – or €983 million – compared to July last year. ..
Meanwhile…
The Dept of Finance has confirmed to me that Ireland’s net annual contribution to the new EU budget will be around €1.5 billion. That is five times what it was in 2018.
— David Quinn (@DavQuinn) August 6, 2020
An economist told me it works out at about €650 per working person per annum.
— David Quinn (@DavQuinn) August 6, 2020
This morning.
Anyone?
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One of the wealthiest countries in the EU is being asked to contribute to the budget – well, strike me down with a feather.
one of the Wealthiest? Doubt that.
Feel free to check for yourself.
You’re going on GNI then, but not taking into account that the gross national debt in 2020 (Jan) was €215 billion, the State’s national debt is one of the largest in the world and a multiple of what it was before the crash (€43 billion).
As a simple example:
person A has assets of € 200,000 and no debt
person B has assets of € 300,000, but a debt of € 500,000
Which is the wealthiest?
If they were companies (and a country is more like a company than a person), person B would have the higher enterprise value. A more valuable entity.
“the State’s national debt is one of the largest in the world” – not even in the top 20
Anyway what’s your point – Afghanisthan has the lowest national debt per capita in the world.
definitely A.
All EU countries have debt too:
Look at these 3 countries showing (approximate values)
GNI/person; debt/person; GNI-Debt
Germany: €45,750 – €26,250 = €19,500
France: €46,360 – €35,250 = €3,750
Ireland: €56,250 – €44,900 = €11,350
who is richest? second richest? third richest?
an important difference being that france and germany opted to take on debt to invest in infrastructure in their countries (which equates to wealth), whereas we were forced to take on debt to invest in infrastructure in, eh, france and germany
France and Germany’s debt created wealth in France and Germany, but, so did our debt
The point Rob is that you pluck out GNI as an indicator, thinking that it represents the wealth of a country based on an average, but don’t accept that, based on an average, we are a country with one of the largest debts. Quid pro quo and all that.
We are one of the richest countries in the EU by any metric you wish to consider; you are denying objective reality by suggesting that we aren’t.
@newsjustin. We’re not talking about enterprise values plus we’re talking about a country, not a company. Companies might be run better
You chose to compare countries to people.
So I compared them to companies.
Chill
@Cian.
GNI is not the actual income that persons get. It’s an indicator of an averaged income into the state per capita.
Ireland is however a haven for the likes of Google, twitter, Paypal, EMC (Dell), Apple, etc.etc. a lot of whose incomes are posted as coming into the state, but leave it just as quick, however with little or no PPP. Germany and France haven’t a similar relationship with those companies that would yield that kind on % to their GNI
On the other hand, the Debt is actual.
The median income (2018 figures) was approx € 35,000 per capita. Now, that’s a long way off your figure € 56, 250.
€35,000 less € 44900 – well that tells the true wealth of the individuals Minus €9,900.
@GiggidyGoo
haha
I showed your ‘but what about the nation debt’ was a red herring… so now you are jumping back to GNI being the problem? Why not ask Rob?
Why don’t you do some work: What is the median income in France and Germany? and see how they compare to “poor” Ireland.
Well, haha yourself Cian. As per usual, you tried to muddy the waters. You boldly wrote
GNI/person; debt/person; GNI-Debt
So, it wasn’t me jumping back to GNI, but answering your post.
You no more showed me anything to discount my post. Ireland is not a rich country when richness is defined by money moving through it (not staying in it) by legalized money laundering.
Maybe you need to do a bit more googling yourself?
I found that thread very illuminating actually
Per capita, it is, of course true.
You can’t be in any doubt that Ireland is a very wealthy country surely?
If we are so wealthy, then why has our national debt continued to increase over the years?
and why can’t we afford to house our people or provide decent healthcare and transport ?
To pay to bail out banks.
And political mismanagement (Janet)
+1
Most of the national debt increases since 2007 was to make up for the lost tax and pay the day-to-day bills – primarily Social Welfare & Health costs.
Just to take issue with you a little there, Justin: bailing out the banks only represents quite a small portion of the increase in national debt; the vast majority of it went on current expenditure.
So it would more accurate to say:
1. political mismanagment
2. bailing out the banks
@Cian – Can you put figures on that, and take into account the debt repayments to banks, bondholders, the losses suffered by NAMA sell-offs (Not talking about what NAMA ‘bought’ the loans for, but the actual money that it costed us)
And then maybe go into the reasons for the ‘lost tax’ and the increases in day-to-day bills. The lost taxes and increases in day-to-day were not the cause of the debt – they were the result of Ireland taking a massive hit and having to pay off banks and bondholders by a spineless government which gave false information to opposition parties, as well as the odd gifting of assets cheaply to those in the know.
@GiggidyGoo
I’m talking about government spending – forget all that banking stuff for a minute.
The crash happened (credit dried up; banks stopped lending; building work stopped; unemployment rocketed; disposable income crashed…which then hit secondary services). This hit the taxman.
Comparing 2007 (pre-crash, full employment) to 2011 (crash, high unemployment):
Total Tax that the government has to spend went from (2007) €47.2bn… (2011) €34.0bn …. a drop of €13 billion!
There was €13bn less to spend in 2011 than in 2007. So they had to either slash spending (this was very difficult as some things, like social welfare, increased substantially – extra dole) and/or borrow money and put it onto the National Debt.
The taxes (government income) were made up of:
VAT: (2007) €14.5bn.. .(2011) €9.7bn
CGT: €3.1bn… €0.4bn
Stamp: €3.1… €1.4bn
Corporation: €6.3bn… €3.5bn
Excise: €5.8bn… €4.7bn
Income tax increased slightly by €200m (this was because of much higher tax rates applied to fewer working people)
Note: that 13billion was just the tax ‘missing’ in one year.
@Cian
No, sorry. A flippant ‘forget’ the banks and all that doesn’t wash.
Course it will.
And…. https://www.independent.ie/irish-news/courts/project-eagle-probe-two-businessmen-face-prosecution-for-fraud-over-13bn-nama-sale-39428176.html
Thank you Mick Wallace for shining a light on NAMA’s Northern Advisory Council. Popcorn ordered.
Ireland received billions and billions of EU funds for 30 years when we were a poor state. Its incredibly hypocritical to get upset over the fact that we’re now a net contributor when we’ve become one of the richest states in Europe, in large part thanks to the EU. When German tax payers were paying for Irish roads it was fine, but when Irish tax payers are paying for Polish roads its not?
you could argue that with all the Poles over here working and paying tax that it is *their* taxes paying for Polish roads! :-)
Roads were cheaper then. The Flintstones weren’t involved.
Seth, just FYI, all families pay taxes. You might not have heard of indirect taxation. I invite you to google it instead of peddling mistruths.
My father is over 90 and lived here in the 40s and 50s. Ask him if we’re rich and he’ll tell you sharpish just how rich we are compared to those times.
Did your Da vote Fianna Faíl all those years? Did he have to emigrate?
An economist told me David Quinn is a complete berk, so there.
Is it not the case that Ireland’s EU bill increase is due to the tech companies funneling their funds through here?
Such profits earned elsewhere are a component of Gross Domestic Product (GDP) – hence Krugman’s pejorative term ‘Leprechaun Economics’.
However, these are specifically excluded from Gross National Income (GNI), which is the basis on which national contributions to the EU budget aka the Multi-annual Financial Framework (MFF) are calculated.
The logic is set out here:
https://assets.gov.ie/4910/181218123252-71a2c297f26b419fa3696d7349e3e788.pdf
I should add that the attached link, while explaining the difference between the two attributes the 34% increase in 2015 GDP generally to aircraft leasing operations in Ireland. It conveniently – deliberately – ignores the considerable spike in GDP arising from Apple’s greatly increased tax payments to the State as a consequence of the EU state aid investigation launched in 2014.
While this investigation was ultimately found to be without basis, it is notable that the investigation itself led to Apple paying – and continuing to pay – significant tax in Ireland from that point forward.
The €650 cost per annum per working person is a simplistic and disingenuous stat (aside from the fact I think that is not a bad price to pay for EU membership). Also what would the cost be of not being a member of the EU? The implication that I would be €650 better off if Ireland left the EU is false. The UK is about to find this out the hard way.
Is the €650 a net or gross figure? Does it take account of direct EU funding sent back to Ireland (i.e. in payments to farmers and part-funding of infrastructure and other projects)? Does it take account of indirect financial benefits of being part of the single market – lower prices for goods that might otherwise be subject to tariffs? It also can’t take account of other benefits of the EU – the ability to work and travel freely in other EU states. There could be a time and money cost if I had to get a visa and queue in line every time I went on holiday to an EU member. The EU negotiates complex trade deals with other blocs and countries which benefit EU citizens – this would not be possible on our own.
Since the EU forced the phone companies to not rip us off on roaming costs (calls and data) I’ve probably saved €650[1] each year alone!
[1]Technically I haven’t saved that much… but I will pretend it is this much for humorous purposes.
Good value.