As February nears its end and the 1st of March looms large, we witness the end of Winter almost a month earlier than usual. As the days grow longer, we reflect on the people who are homeless and the families without a roof over their heads.
There are 10-thousand people homeless in the Republic of Ireland, and 12-thousand either homeless or on a housing list in Northern Ireland. The answer to this problem depends on who you ask: The ‘A’ plan is to build more houses for the growing population, with the estimated need at 35 to 40-thousand houses per year going forward. Despite this huge need for houses, we only built 18-thousand in 2018 and are set to build 23-thousand in 2019.
I think that the difficulties in building large volumes of houses are the Central Banks’ rules on lending, the availability of land in urban areas, and the lack of a skilled work force. The Banking rules on mortgages are; for first time buyers, you must have 10% of the property’s value in dry stuff, cash (or other acceptable equity, such as a site). For second time buyers, that increases to 20%. The most anyone can borrow is 3.5 times their basic income. The reality faced by anyone looking to buy a house in modern-day Ireland becomes very stark indeed, as in our cities such as Dublin, 3-bed estate houses are valued upwards of 330k, and 4-bed houses often breaking 495k (almost a cool half-mil).
This effects the age at which families now get their mortgage at. This also pushes the age of marriage, having a family, and the mortgage 10 years on. Nowadays, you are almost 40 years of age when you are fit to buy a house. It’s worth noting that of the number of houses changing hands in 2018, 55% were purchased by cash customers, most of which go back to the rental market. The people who lose their house through financial difficulties have their house sold, sometimes to a vulture fund by the banks, at two thirds of the value.
It’s also worth noting that 28-thousand mortgages are in arears for more than 2-years, which means there’s an awful lot more heartbreak on the horizon. There are 37-thousand mortgage cases before the Courts for discussion. This is 8% of all mortgages. So, the end game for customers, distressed mortgages, and banks still have a long way to run.
What do we do about the Irish Health Service? The HSE is in crisis, it could be said. Our health service is not fit for purpose, problem after problem in our health service appearing each year.
In 2016, a trolley crisis where patients were lined up in corridors in our A&E departments in every hospital, waiting for treatment, the numbers counted every day on our national airwaves. The situation remains unsolved to this day.
2017 we had the failure of Cervical Check care system where the scans were misread, mistakenly giving the wrong result, and some scans due to time delays were not readable by lab technicians.
In 2018 we decided after a 14-year delay to build a state-of-the-art children’s hospital in Dublin, on state owned land on the grounds of St James’ Hospital. The cost of the build in 2012 was agreed and estimated at 450 million Euro. Now that the build is underway the price has jumped to 1.7 billion. This equates to 6,500 per square metre, the most expensive hospital ever built. This would not happen in the private sector. No accountability even from minister Harris.
Now in 2019 we have the nurse and frontline soft strike The demand in pay terms is 12% Nurses starting pay in 2019 is 29,300. This represents 3,000 less than their pay scale in 2008. The cost of peace in this pay claim would cost the public purse 300 million at a time when only 1 in 4 frontline jobs are being filled as they arise. These vacancies are filled by agency staff at a cost of 1.2 million per week.
But all is not lost, the cost of the new children’s hospital is now going to be audited by consultants in the private sector to examine where the overrun in cost has come from. These consultants are only charging 450 thousand to answer the question. In 2018 the health budget was 15.5 billion. But the overrun cost by year end was 700 million. We can only wonder where the budget will finish for 2019, even allowing for the extra 1 billion euro that was given in the 2018 budget.
Now kicking and screaming we are in 2019. We all take a look at where we are in our lives and what promise 2019 holds for us. We worry about the speed our respective lives are running at and then our bank balances.
On January 2nd 2019, when we all reluctantly went back to work, the first thing we noticed was the change in the hospitality V.A.T. rate, from 9% to 13.5%. Reflecting on our first cup of tea or coffee of 2019, the standard “take away” cup of tea has gone from €1.50 to €2.00, a 33% rise, the standard cup of coffee has gone from €2.00 to €2.25 a 12% rise. V.A.T. only accounts for 4.5%. Those of us who need a “ take out cuppa”, eat out, or just buy a sandwich, or the average three coffee each day at work, question the wisdom of our government to impose this extra charge on the common people.
The tourist, and the Bed and Breakfast customer are a sector that has created seventy thousand jobs extra in five years. The tourism and hospitality industry account for 235 thousand jobs in 2018, with a tax take for our state of 466 million from this sector.
Now Paschal our Finance Minister expects to collect an extra 66 million euro in tax for 2019. Those of us who work in retail or hospitality or in small time business, know only too well that with a 30% rise in the cost of insurance in 12 months, now the V.A.T. rate of 4.5%, gas 7%, electricity 9% and 50% of us getting an increase in the Commercial Rates, Paschal’s figures may need to be adjusted because there is a reason we live and work in the shadow of the “Hidden Heartlands”.
As we all look on at the Brexit debacle, the 31st March is getting very close and no deal is in sight, the British Prime Minister has lost another vote with M.P.s in the Parliament, the date next week will be the crucial vote. Will it be the 3rd time lucky or unlucky for Theresa May?.
We live in ever changing times.
The Government are looking at the whole system by which Irish workers contribute to their standard of living after they retire from work. As I understand it, listening to all the pundits discussing the matter this week, broadly speaking there are essentially four types of pensions in Ireland. You have public sector pensions, the state contributory pension (not means-tested), state non-contributory pension (means-tested), and the ever elusive private pension.
Public sector pensions are paid to all state employees such as members of the Defence Forces and An Garda Síochana, teachers, nurses, civil servants etc on retirement, once they have served the country for enough years. Public sector pensions are guaranteed by the state (tax-payers) and while in theory public sector workers pay into their pensions during their working life, the pensions they receive are extremely generous, and for the last number of years the Government has been paying these pension liabilities (along with all other state pensions) out of the state’s current account.
Now, the state contributory pension is available to all workers who have paid the requisite number of class A, E, F, G, H, N, or S social insurance contributions during their working lives (currently between 16 years of age and 66 years of age). There are all sorts of rules applied to qualifying for this pension (whether a full pension or a pro-rata pension), but most people who work most of their lives and pay PRSI and PAYE will be entitled to some form of contributory pension when they retire, including the self-employed since the late 1980s. Currently, the pension age is 66, interestingly, if you have an entitlement to the state contributory pension, you are entitled to work and earn as much as you like (if anyone will have you) without affecting your pension entitlement. The maximum rate of this pension is €243.30 per week.
However, in contrast to the contributory pension, the non-contributory pension is somewhat more straight-forward. If you are of pension age but don’t have an entitlement to a contributory pension, or if a non-contributory pension would be more beneficial to you, you can seek to be means-tested for entitlement to a non-contributory pension. If you seek to be means-tested, the state will take into consideration your cash income (including income from work), the value of capital (for example, savings, investments, cash on hand and property but not your principle private residence), and any income from property personally used. Now, if you can prove that you are not of means, the maximum weekly rate of non-contributory pension payable is €232.00. Now, even if you have some income, you might still be entitled to a non-contributory pension, provided it is less than that of the maximum rate. For example, if you have income from work of €50 a week, and it is your only means, you should be entitled to a weekly non-contributory pension of €182.00 per week.
So, what’s all the talk about? The problem facing the nation is that we are living longer and there are more of us who are totally dependent on the state pensions for support in retirement. Today, 66% of private sector workers have made no provisions for a private pension. That means many private sector workers will have to survive on less than €250 a week in their old age. Do you think that is something you would like to have to do? Remember, retirement could account for almost one third of your life (if you’re lucky). Could this piecemeal amount sustain you through those golden years? If you don’t then you might want to consider a private pension. Currently, private pensions are voluntary for all workers. The Government are exploring the possibility of an opt-out system of private pensions for private sector workers, which would see the Government and your employer contribute equally with you to a private pension. This is often referred to as the 1-1-1 system and is used in other parts of the world. So, for every €1 you contribute to a private pension, your employer would contribute €1 and the state would contribute €1. The system would be voluntary but unless you specifically opt-out of the system, it would be applied to your pay packet. Now, all this is just talk at the minute but no doubt something has to be done to mitigate the impending pension bomb that is coming down the tracks.
Perhaps Pascal and friends will make positive changes to our PRSI, PAYE, and USC system to build up the state pension fund before the ratio of retirees to workers is out of kilter. It is worth nothing that before the economic crash in 2008, the state pension fund was worth a whopping €18-billion, but most of it has gone to pay our banking debt. Is it any wonder those of us who go out working on a daily basis feel disenfranchised by the system. And on that note, I leave you with this gem; stress at work doubled between 2011 and 2016 from 8.5% to 17%.
Where to now for the National Broadband Plan (NBP), Ireland, and more importantly rural Ireland? With 74% of the country having a broadband service, there are 542,000 homes and businesses left without an adequate service. The present high-speed broadband plan was first announced by Fine Gael in their 2011 manifesto; three Ministers for Communications later, and a few dinners thrown in for good measure, progress remains slow. The decision is now in the hands of the Government, which now has sight of a report compiled by Peter Smith, on whether or not the NBP has been compromised. The findings of the report appear to indicate that the tendering process has not been compromised by the relationship which evolved between Minister Denis Naughten and David McCourt, a key figure in a US investment firm, and the only remaining consortium bidding for the NBP contract.
In 2015, the preferred bidders were reduced from five to three. The remaining bidders comprised of; 1. Eir, 2. Siro: ESB Networks-Vodafone, and 3. ENET: Granahan, John Laing Plc, and the Irish Infrastructure Fund, SSE (SSE pulled out of the consortium in July 2018). By July 2018, all but the remaining ENET consortium players had pulled out of the bidding process.
Having spent 275-million-euro so far, the Government claims they intend to see the NBP through. Despite initial estimates putting the total cost of the NBP at half-a-billion-euro, it is currently estimated that the plan could cost three-billion-euro to implement. The NBP may yet have a journey to run, so, rural businesses, farmers, workers, and families may have to continue to suffer because of an out of touch Government not keeping pace with the investment needed in an economy which is growing and changing by the day.
With the bank holiday still fresh in the mind, we look back at the highlights, the history, and memories of Strokestown’s new Halloween Harvest Festival.
On Saturday, the children picked their pumpkins and decorated them in the community hall. Over 300 pumpkins found new homes, all looking well, painted, and some pumpkins even ended up with hair. There was also some children’s theatre performed by the new local theatre group; Enchanted Croi Theatre.
When the theatre was over, the crowd moved down to Bawn Street, to do so they walked down along Church Street and did lots of trick-or-treating along the way, on the specially made sweet stalls made by some local volunteers. On Bawn Street, the Town Team had erected a new marquee to cater for the children. There were games, treats, and music by a local Irish music group. The whole crowd was entertained by the musicians on the festival stage trailer. As laughter rang out through-out the air from the marquee, the adults enjoyed a free cup of tea or coffee, and of course; barmbrack with a ring. It was a pity that all the fun and games were cut short by darkness on a cold autumn evening, but Sunday was yet to be enjoyed.
Sunday started frosty and cold but the gods provided a beautiful day, which made the golden straw glisten in the sunshine before it was bailed on the street, ready for threshing. As the marquee filled up with the youth again, the mobile tea room was busy. The Mid Roscommon Vintage Club showed off their beautiful old cars, tractors, and motorcycles. There was a through back to 1946, with a tin-smith showing his magic; making tin rose petals, ornaments, coal shuttles, and all kinds of wares from sheets of tin.
Everyone was being entertained by the various music acts on the music trailer with a fantastic performance from the Owen Kennedy Country Band. The boys were there with the 1946 Fordson Major powered by a six-cylinder Perkins engine, which was driving the old fashioned 1950’s threshing machine. As the three-man crew got her going, grown men stood in awe, and watched as the corn was fed through the machine. Watching the thresher operated on a pulley belt from the Major, the men compared their ages, and we discovered that those under the age of 42 years, had never seen the thresher move from farm to farm. So, those of us of a certain vintage loved to see it back in town and we hope the Harvest will be good again next year.
Every day, in all our lives, the cost of Insurance is spiralling out of control. There are three major problems in the system, as far as I can see. The number one problem I see is the government, number two is the greed driven by multinational insurance companies, and number three is certain swathes of the population gripped by injury (or not) compensation culture.
I’ll start with the government. Every government over the last thirty years have promised to take the insurance groups to heel but each time the industry is hauled in to account for the high cost of insurance, they put forward the extortionist costs of the legal system in Ireland, and the number and value of claims increasing.
Secondly, the insurance companies never open up the books to show the losses and profits each year, like some other service providers. So, please Mr. Varadkar, bring forward legislation to change what is happening to our 18 to 25-year old, first time drivers, who are being quoted between four and six-and-half thousand euros per year for insurance.
Third on my list are the 3,000 whiplash cases in Ireland in the first six months of 2018, with an average claim of twenty thousand euro. In the UK the cap payable for this injury is four thousand pounds. The question must be asked, if in one year we can reach almost six thousand claims, could they all possibly be real?
Solicitors and their ilk explain that they must accept claims as valid, because a claimant will arrive, make a statement, produce a medical certificate from a doctor, and be willing to wait one to five years for compensation while paying for their own recovery. As far as I can gather, there has only been one case of fraud in such a case over the last fourteen years, in which a conviction has been secured, so, maybe judges, barristers, and solicitors should throw the book of quantum in the fire before our pubs, hotels, community halls, street festivals, and parades have to be curtailed because of the cost of public liability renewals.
The Irish economy ten years on. 2007 was the last of the celtic tiger good years, unemployment down to 4.7% of the population, over 93,000 homes being built, Fianna Fail in power, and Brian Cowan was driving the bus, the Galway races tent in full swing, then came the crash in 2008. First half of the year full of rumours, July and August political holiday, and bad news; words used like we never heard before, liquidity problems, bank guarantee, bond yields, bad debt and insolvency. The tax for our sorry state was 21.4 billion in 2008, by the end of 2008 the unemployment rate had soared to just shy of 16%. Ajai Chopra was appointed to manage our finances by the European Central bank. Jumping ten years on, the good times have returned or have they? Luke Ming Flanagan is burning a fifty euro note outside the financial center in Dublin’s Docklands (he was probably better to smoke it). Leo is now running the political show, and Michael Martin is extending the confidence and supply rope, maybe for two more years, the cliff edge the government is on could be tough with ten thousand people homeless. But let’s get real folks, the overall budget for 2018 is eighty thousand million, the unemployment rate is back to 5.2% but let the workers of Ireland not get carried away, the most you can hope for is a two hundred euro widening of the tax band in this years budget, because as a nation our debt is two hundred and five billion and to service that debt costs us nine point five billion, the same size as our education budget. So I suppose the decision not to burn the bond holders at every level was well founded (or was it)?