Will these IMF Suggested Cuts be in Budget 2013 ?

A recent report from the IMF  titled  “Ireland: Selected Issues”  made some observations and comments on ”  Medium-Term Fiscal Consolidation in Ireland”.

There were a few suggestions in the report for possible cuts in spending – and it will be interesting to see if any of these cuts make an appearance  in Budget 2013 which is due to be announced on December 5th this year.

Public Sector Pay :

The IMF report points out that the average public pay/GNP per worker in Ireland  is one of the highest among advanced European economies, which is suggestive of a public wage premium over private pay . The report says it may be possible to achieve paybill reductions within the framework of the Croke Park Agreement through allowances, sick pay and reduction in premium/overtime payments. However, if significant progress within the CPA framework proves elusive, pay rate adjustments may be necessary.

Public service pensions

The 4 percent average levy on public pensions in 2011 appears to have generated relatively small savings in the public pension bill. With a 53 percent increase in pensioner numbers between 2008 and 2011, ( partly due to early retirements and redundancies)  –  the net public service pension bill has risen by 49 percent since 2008.  This cancels out one-third of the savings in the net public  pay bill.

The report also points out that  the  public pension scheme reforms currently being introduced  will apply only to new entrants and will not help to reduce the rising public service pension burden for almost 30 years. The report goes on to say that  the average public service pension is roughly double the state pension and suggests that  a review of the scope for further savings in the pension bill is warranted.

State Pensions  :
The IMF report states that the rate for contributory pensions (paid to about 80 percent of state pensioners) is only 5% above the rate for non-contributory pensions.   They suggest that these rates could be equalized as the link between PRSI contributions and pension entitlements appears weak; and contributory pensioners more likely have occupational pensions.   (We assume they are suggesting a cut in the contributory pension rather than an increase in the non contributory one?)

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Household benefits package  :  The increasing cost of providing universal  free TV license, telephone, electricity and travel for the elderly was also mentioned in the IMF report. They make a suggestion of  abolishing these benefits and instead introducing a  corresponding increase to the means-tested pension. They point out that there  would still be considerable savings, as only one-fifth of pensioners receive means tested pensions.

Medical cards

The IMF report mentioned that the medical card means test for people over-70 is much more generous than that for the under-70s and over 95 percent of the over-70s population have medical cards.

The IMF report suggests that a standard means-test for all ages could be considered.  They also suggest the use of  more graduated medical card coverage (like the GP-only medical card)  as well as incentivizing greater generic drug usage.

Child benefit 

In the IMF report – there are a couple of suggestions on how to cut child benefit expenditure in Ireland . One method  would be to treat it as taxable income. Another suggestion is to reduce  the universal component of the payment in conjunction  with offsetting increases in qualified child allowances and family income supplement (which are means-tested).

Student Fees – Third Level  :  The IMF report points out that the annual cost of subsidizing college fees for 160,000 Irish students in 2010  was about €1.2bn.   Total (public and private) expenditure per college student is €9,800 in Ireland as opposed to €7,700 in the OECD, but the private share is relatively low (14 percent in Ireland as opposed to 33 percent in the OECD) .   A suggestion of reintroducing fees that vary by course—as existed till 1995—”would generate substantial progressive savings which could be deployed to supporting low income students.”

8 thoughts on “Will these IMF Suggested Cuts be in Budget 2013 ?

  1. why dont the imf and the irish government look into immigration in ireland put a cap on it they way they did in the uk there are thousands of ppl from out side the eu such as nigerians chinees who are scamming the the social walfare systom they are sending millions out of the state weekly go after them please dont be hitting the irish ppl who need this payment just to survive

    • Because they are afraid of being called Racists. Political Correctness and Multiculturalism has failed society. We should have halted immigration when the economy started to suffer. There are no jobs available here but Immigration is up. That should tell anybody with some common sense something.

    • i have to completely disagree with comments made by john, Joseph and Christine. its absolutely ridiculous that you turn back to foreigners and try to disgrace them for the mistakes and loop holes in your country’s governing system. we have been working as hard as you’s to make this country (in its glory days) better. foreigners worked their asses off in the building and service industries. We didnt TAKE anybody’s job. we did jobs that the irish didnt want to do. e all worked hard payed more tax than the irish (probably) and get humiliated by you’s ?????
      in regards to scamming the country;- i would completely agree with cheerful dub. look at the dole. you have scum-bags living of our money (in Dublin anyway). you have young people who are well able to work staying in the dole. why?? because they can get away with it and the government doesnt do anything about it because they want their votes and they are scared of consequences. look at areas like finglas, ballyfermot, tallaght, cabra, etc etc. are those places and people like that because the non eu people are scamming the country?? people need to open their eyes and see whats happening vefore pointing fingers to someone because somebody else has your same opinion.

  2. I agree with Joseph, there are far too many Africans and non eu people here living off the state.We cant afford them, send them all back including asylum seekers, we havent work or money to help our own people.Also deport all foreign criminals it costs us money to keep them in jail. We need to get tough for tough times.

  3. According to the latest census figures from 2011, in the Glway City and County area some 675, or 2 out of 3, non-EU residents is on full dole. That is huge and no need to do a cost benefit analysis, they’re costing Ireland a lot of money. Indeed, the overall rate of jobless non-nationals in the area, both EU and non-EU, is more than 50%. We cannot afford that. We have to get tough. Copy the Danish system. Scrap welfare and benefits for non-EU residents and replace with start-up aid of 500 euros a month payable for 12 months only.

    • BlueGalway – I don’t know where you get those figures from – but they are clearly wrong. There are 912 unemployed non EU people in Galway City & County . This is from a total Non EU Co Galway population of around 23000 . Where are you getting your figures from ??

  4. I agree with the comments on non-irish getting dole to be looked and our country does need to get tougher.

    one comment i will make is that the social welfare needs to be looked at (not reduced). it should be done on a case by case bases. We need to look at people who are really looking for work against people that have been on the dole for years and who are well able to hold a job but choose not to. (not judging the people who actually have a valid reason not to work)

    i lived next door to a couple who where both 21 and on the dole. its a disgrace that people so young have no ambition, all work is good work. why should they who probably have little PRSI paid be put in the same pool as me who has have 11 years of PRSI build up?

    also, a person i know had a baby at 18 now lives in an apartment paid for, never worked a day in her life (still doesnt) because she is a single mother. prior she was living at home and was in a really good living environment why wasn’t her living situation looked at before a decision is made? if it was she wouldn’t be living in an apartment but at home.

    i feel if they hire a lot of staff for 1 year to go through all people who are on the dole and evaluate their situations, not only will their findings pay for this staff but will also save the tax payer a lot of money annually. we do not have the resources to keep this clean, no wonder there are people cheating the system…. its to easy and i’m sorry but Ireland is becoming weaker and who pays for this!!!!!

  5. I agree with the statement made there, anybody who has a child should not be giving a new home to move into they should be giving bump beds for the home they grew up in if they don’t like that then they can go stay in a cheap hostile make it hard on people not easy so they can use the free education this contrary provides to better there selves and make a better future for the children.if they are not willing to work then I’m sorry but I don’t want be paying to keep people anymore and long term people on the dole should be cut off maybe by dropping it by 20 a month till it hits zero no excuses u don’t want to work there is plenty of space on the street and strew house to go for something to eat let them decide what standard of living they want. It has to be this way as the system has being abused and if u give people to much help they will just take advantage and rob a living

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