Monday, October 13, 2014

THERE was a lot of talk last week about how the economy was performing better than expected, prompting the Central Bank to review its growth forecast upwards from a little over 2% to approximately 4.5% for the year.

Great: does that mean we are all on the way to having more money in our pockets? Sadly, it doesn’t. Yes, we need to have a vibrant economy or everything suffers, as we all have seen over the past seven years. But the growth was mostly in exports, and while they are very important to the overall health of the nation, there wasn’t much growth in other sectors, the ones you and I find ourselves in.

People will tell you that there is a rise in consumer confidence, which, in turn, will lead to growth in the retail sector, but we shouldn’t lose the run of ourselves just yet. Remember, there’s another budget around the corner – yes, it comes once a year – and while those in the know tell us it will be generally neutral, let’s just wait and see.

And while we may not be hit with more direct taxes this time around, that won’t be the end of the matter. If you were in the Tallaght area of Dublin lately you would have seen that election posters are up again – junior minister Brian Hayes’s successful bid for a place in the European Parliament creating a vacancy in the Dáil.

One of the candidates is advocating a big no to water charges. With all the figures being quoted about how much the service will actually cost, don’t be surprised if you see that particular topic gain momentum yet again, especially now that Irish Water has admitted it cut the free water allowance given to children because of statistical assumptions without any hard evidence.

Initially, that allowance was going to be 38,000 litres a year, but now it has been cut back to just 21,000 litres. When that piece of news broke, it was first thought to be the result of some scientific tests that were carried out, but now we know that is not the case. In fact, Irish Water has admitted it never carried out a study to determine exactly how much or how little water a child actually uses.

At the moment there is something of a phoney war taking place with regard to these charges. In other words, they are now in place but we haven’t received the bills. All that will change in January and, trust me, the news won’t be sweet.

But one thing that is not phoney is the property tax. It may have started off collecting small change, but not anymore. A total of €385 million has been collected in property tax so far this year, compared with €200 million for the same period last year – a rise of more than 90%.

Another good luck story for the state this year is the amount of extra tax it has collected – to date, €703 million more than expected. A total of €11.8 billion has also been collected in income tax and the universal social charge from workers this year, so forget the notion of getting something back from the budget. With those kinds of figures, all we will really be getting is what was ours in the first place.

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