Monthly Archives: April 2013

An open letter (to Minister Hogan and the Kildare County Manager) on the Local Property Tax

Dear Minister Hogan

So, I have paid my local property tax. I belive as I have said on numerous times that some form of tax on real property is a good economic idea. I have severe concerns about how this particular property tax is implemented but I guess it’s a start.

What I wonder however is this : it is billed as being for local authorities (which I think you are rationalizing anyhow so we might see a reduction….?) but I am unsure what, exactly, I get from Kildare County Council.

On their website they have a number of departments, which I guess correspond mostly to the activities they undertake. Let me go through them…

  • Community : this seems to be about festivals and apparently we have joint policing committees. The latter are of course powerless. It also seems to cover the county development board. I wonder if that is really something that Enterprise Ireland or IDA could not do just as well? Im willing to chip in here for the festivals and the social good that they do. It also seems to cover Comhairle Na nOg, but the last activity on their forum seems to be in 2008…..
  • Corporate Services : well this is management and if we can cut down the activities we do we will, I imagine , need less. So lets treat and all other management services as  as a residual.
  • Civil Defense : I guess some backup to the emergency services is a good idea. However since January this year this has now gone to the department of Defence so as my general taxes pay for the army and police (and well spent they are)  im not sure what part of my monies go to this?
  • Economic Development : this department seems to consist of a link to the county development plan. I suspect that that lives under corporate services?
  • Environment : this is the kind of thing we think of when we think of the council. However, I pay a large sum of money each year to AES for my bins; the litter situation in the main towns is so-so, and there is a marked increase in casual dumping. If I want to use the Sillot Hill recycling site I pay for that.  Commercial waste etc I would imagine should be served from commercial rates. I guess the derelict sites section could be useful given the large number of brownfield and related sites now not being built on. I have filled in the nice form…
  • Finance : a management service
  • Fire Services : an undoubted public good but…I already would pay for the service were  I unfortunate enough to have to use it. Im happy to pay towards a decent fire service (mind you id be much happier to pay for a service that was organized and managed on a national basis not a hodgepodge of individual authorities, one that had more Indians and less Chiefs…).
  • Heritage : again a social good and worth supporting.
  • Housing : social housing is a public good and im happy to pay
  • Human Resources : a management service
  • Information Technology : a management service
  • Leisure : this seems to be about allotments, and playgrounds and some public pools etc. Again, these are public goods. Again, Sallins seems to have none of the above. A playground would be nice to go with the pubs, bookies shops and brownfield sites we have in abundance…
  • Library & Arts : again an undoubted public good and one that I would be happy to support. Mind you, a library in Sallins would be nice…
  • Motor Tax : a collection service for the state
  • N.R.D.O. : apparently this is the national roads design office. Im not sure if it deals with the NRA on local issues or what but in any case the issues mentioned seem to have all been done. Im sure we are not still paying for staff to monitor the Osberstown interchange or the N7 upgrades?
  • Planning : well…what can I say. Sallins and environs is a microcosm of the catastrophic unplanned and fragmented planning “service”. A leisure facility given planning permission for a massive development now mostly unoccupied (supervalu and Dominos apart); the same so badly designed it flooded in an apocalyptic manner; meanwhile an existing site 200m away in the center of the village with the same permission lies derelict for 20 years; a massive tesco bang on the outskirts of Naas causing traffic chaos at an inadequate roundabout; a county town with a white elephant unfinished shopping center the size of Whitewater built in the main car park while the town itself withers as traffic wardening is enforced with sadistic zeal and people go to the aforementioned Tesco ; one could go on an on and on . And you want me to pay for this? Riiiiggght…
  • Procurement : a management service
  • Roads and Transportation : I already pay road tax and the county has the highest proportion of NRA roads in the country.  non national roads need management and this costs but when one looks at the cratered surface of say the Sallins to Clane or the Clane to Kilcock road one despairs. I shudder to think how bad the roads are going to be in a few years…
  • Water Services : we will be paying for these separately anyhow from next year or the year after so id like to see the rationale for dual charging for this?

So overall its hard for me to see the immediate benefit of the council.  Where there are some services that are or will be charged for it would be nice to see the extent to which these are charged to cover private benefit (my house not burning down) versus public good sharing (my house not burning down rendering me homeless and the fire spreading). Where  there are public goods these should be paid from general taxation. If this charge is part of general taxation (which of course it is) then why not simply call it so? If we want to divert some proportion of general tax to local authorities to spend on local provision of public goods, there are much simpler methods to do so.

I look forward to your response.

Property prices in Ireland pre and post transparency

In September 2012 the Irish Government finally published a reasonably comprehensive register of residential home sales. We now have 6 m data on property prices after this. While this chart here, which shows the cumulative 6m change pre and post publication is grossly unscientific, there does seem to be some effect. This cant be all down to the local propert tax as this was well flagged for some time. Would be worth a proper examination…

The richies are different….

So Richie Boucher, the CEO of Bank of Ireland, is on a salary and benefits package of over 800k.  The BoI AGM is on today, and the Irish taxpayer owns 15% of BoI.   The minister for finance has declined to vote to reduce this package (and that of the part time chairman…). At the same time the other minister for finance Brendan Howlin, has more or less decided to ignore the vote of public sector and will (despite having said he will get the labour relations commission to investigate how to ) impose or assume the pay cuts voted down.

This softly softly approach to Bank of Ireland contrasts massively with the hectoring bullying approach being taken to the public sector. While BoI has done ok over the last year and  Boucher’s tenure it is up the reality is it is still in the intensive care ward. If it finds itself needing billions more it wont go to the markets but to us. So, what applies to me should apply to Richie. But, it wont. So, why is it ok to treat Richie different? Are the richies that different

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Structure of Irish Government Finances 1995-2012 in Pictures

The government finances are something that always seems to baffle people. The CSO and Eurostat provide great detail but it can be hard to navigate. Below see some charts that I have extracted from these.  The raw data (in summarized form) are also below.

Total Irish government revenue and expenditure, in 000m. Note the reasonably broad balance over time and then the effect of the banking crisis...

Total Irish government revenue and expenditure, in 000m. Note the reasonably broad balance over time and then the effect of the banking crisis…

Breakdown of main spending headings of Irish government
Breakdown of main spending headings of Irish government

Main revenue headings as % total revenue. Yes, capital taxes are that small.....

Main revenue headings as % total revenue. Yes, capital taxes are that small…..

Are we really that highly taxed? Direct and Indirect taxes as % GxP

Are we really that highly taxed? Direct and Indirect taxes as % GxP

The interest burden on the state finances is going the wrong way...

The interest burden on the state finances is going the wrong way…

Public Sector wages (pensions are included in social section) are <30% total spending

Public Sector wages (pensions are included in social section) are <30% total spending

Total social expenditure (social welfare, state and PS pensions etc) now accounts for 50% total state revenue… See how that shot up when the recession hit?

Here are the data if you want to play round some more

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