News Ireland daily BLOG by Daily

Wednesday 9th October 2013

How the Irish Budget will affect pensioners and young families

Cuts to child benefit and old-age pension ruled out


CHILD benefit and the old-age pension are safe from cuts in the coming Budget, but a raft of smaller allowances will be hit to make up €300m in social welfare cuts.

The dole and core social welfare rates will also be maintained in Budget 2014.

But Fine Gael is demanding tough measures to target the so-called “welfare culture” of people being paid so much in benefits they have no incentive to work.

As the Budget negotiations intensify, the Cabinet has gone to war over where the axe will fall.

As revealed in yesterday’s Irish Independent, the Coalition has agreed that the package of spending cuts and tax hikes will be €2.5bn, down from €3.1bn.

But Fine Gael and the Labour Partyare now squabbling over the use of the ‘spare’ €600m.

The Government is looking to safeguard the key social welfare payments – the benefits that go to parents and the elderly.

After last year’s €10 cut, the headline child benefit rate won’t be hit again. However, small savings within the overall child benefit scheme can’t be categorically ruled out.

Likewise, the pension is protected but this doesn’t mean additional allowances won’t be touched.

Social Protection Minister Joan Burton is also coming under intense pressure from Fine Gael to deliver social welfare reform and tackle the culture of entitlement.

But Health Minister James Reilly is also being blamed for holding up the entire budgetary process with his failure to estimate the spending requirements for his department.

The uncertainty over the health allocation has knock-on effects for the plans in other departments.

PROTECT :Labour believes Fine Gael is trying to protect Dr Reilly’s Budget by putting the squeeze on Ms Burton.

The Social Protection Minister has provisionally had her level of cuts for nextyear brought down from €440m to “the general ball park of €300m”.

But this figure is not set in stone and there is a risk of it being moved upwards if more funding is required for the health budget.

Tanaiste Eamon Gilmore and fellow Labour ministers are backing Ms Burton’s demand for her cuts to be reduced.

Public Spending Minister Brendan Howlin says there is “room for manoeuvre across all big-spending departments”.

But a government spokesman said no assumptions could be made at this stage.

The new Budget target will result in €400m less spending cuts and €200m less tax hikes in Budget 2014.

The Coalition will bring in up to €600m to make up the balance of the adjustment from some once-off sources, including:

* €20m in Central Bank profits.

* €150m from the sell-off of Bord Gais.

* €200m savings on the cost of debt repayments.

* €150m from reductions in the Live Register.

* €80m from other once-off measures.

The Government is also relying on the economy to grow by 2pc next year to ensure that it hits its Budget targets.

But it now admits the economy will hardly grow at all this year – although it believes unemployment is falling faster than expected.

The Department of Finance made the admission last night as it scaled back growth projections for this year and 2014, in the economic outlook underpinning the Budget.

Gross domestic product is seen expanding by just 0.2pc this year and will rise 1.8pc next year.

However, the figures presented by the department are skewed by the fact they were based on the old €3.1bn figure, and not the €2.5bn adjustment.

Meanwhile, the ESRI, maintained its view the Government should stick with the plan to take €3.1bn out of the economy in the Budget through tax hikes and spending cuts.

The ESRI said the Government “may get away” with its reduced €2.5bn adjustment, but it echoed concerns from the IMF that more might have to be done in 2015 than expected.

Anglo Irish customers overcharged €1.2bn, A court told


Bank’s liquidator confirms overcharging but says he doesn’t know amounts involved

The court was told last month that former Anglo chief executive David Drumm, who moved to the US after resigning from Anglo in 2008, is willing to testify on Mr Flynn’s behalf about the overcharging .
Anglo Irish Bank and its successor Irish Bank Resolution Corporation overcharged customers by an estimated $1.6 billion (€1.2 billion) and continued to overcharge since the Government liquidated the bank in February, a forensic banking specialist has claimed in a US court.

Expert witness
The expert witness made the claim in a legal challenge taken against IBRC’s application for bankruptcy protection in a court in Delaware by developer John Flynn and related parties who claim they were overcharged $11 million onloans of about $200 million with the bank.

Mr Flynn, who is best known for his involvement in the redevelopment of part of Smithfield in Dublin and his shareholding in the Blackrock Clinic, the private Dublin hospital, has taken a separate lawsuit against IBRC in a New York court over the overcharging.

IBRC, formerly Anglo, is seeking “Chapter 15” protection from creditors under US bankruptcy law that allows foreign companies to have overseas liquidations recognised by the American courts.


In August the bank’s liquidators KPMG sought protection in Delaware to prevent creditors seizing about €1 billion in US assets.

KPMG has been paid €5 million in fees on IBRC’s liquidation since February while the firm’s lawyers A&L Goodbody are earning an estimated €1 million a month, it was disclosed in court yesterday.

Mr Flynn, who attended court yesterday, is challenging the bank’s petition as it would block his lawsuit in New York along with others taken by borrowers and creditors of IBRC in the US.

Lawyers for the developer, a US resident, claimed that the liquidators were trying to stop Mr Flynn’s New York litigation “with unclean hands” because the overcharging had continued under their watch.

Testifying by video-link from Belfast, Eddie Fitzpatrick who runs financial services company Bankcheck, told the court that he had analysed accounts for 16 customers of the bank and found that the overcharging continued after the bank’s liquidation in February – a claim denied by the liquidators.

Mr Fitzpatrick, a witness for Mr Flynn, said the overcharging was “sophisticated,” “intentional” and a “fraud” on customers, saying that it continued “well past 2004” and “it continues to this very day.” He estimated that the bank was still overcharging Mr Flynn between €80,000 and €100,000 a month.

One of IBRC’s two special liquidators, Kieran Wallace of KPMG, who travelled to the US to testify in court, acknowledged that the bank overcharged Mr Flynn interest “before 2004” but that the quantum was “up for debate.”

He said that he was “very comfortable” that the bank was not still overcharging and that former IBRC management addressed the problem in 2012 when affected customers were contacted and refunded.

Variable rate
The liquidators said in a statement last night that the majority of Anglo’s “variable rate” customer loans in the Republic, Isle of Man and the US from January 1990 to July 2004 were overcharged, and that a quarter of “variable rate” loans in the UK were overcharged from September 1991 to June 2005.

Mr Wallace told the court he was charging €295 an hour for work on the liquidation, while solicitor Mark Traynor of A&L Goodbody said he was charging €400 an hour.

The court was told last month that former Anglo chief executive David Drumm, who moved to the US after resigning from Anglo in 2008, is willing to testify on Mr Flynn’s behalf.

Canada is the new Australia for Irish workers


There has been a massive shift in the number of Irish people choosing to work in Canada, according to migration specialist

The company said that more than half chose Canada as their first country of interest at their recent overseas recruitment road show.

VisaFirst said that most applicants interested in Canada were under the age of 36 and eligible to apply for the working holiday visa for Canada, unlike Oz and NZ where the cut-off point is 31.

Edwina Shanahan, Manager at said: “Over the last two years we have seen significant increases in the number of Working Holiday visa grants to Irish workers going to Canada – from 3,500 in 2012, to 6,500 in 2013 to 10,000 which have been confirmed for 2014. Our guestimate forecast would be that this could rise to 15,000 in 2015.” said that one of the reasons for this is the fact that the Canadian Working Holiday Visa (WHV) can be held for two years, as opposed to just one for New Zealand or Australia.

The working holiday to Canada will also allow applicants to bring dependants and children are permitted to attend schools, again unlike Australia and New Zealand.

Ms Shanahan said: “All occupations are in demand throughout Canada and there are routes to permanent residency (PR) through the provincial nominee programme and Canada experience programme once you have a job offer and a year’s Canadian work experience which applies across a wide range of occupations including managerial, professional, technical & trade work.

“We are currently trying to fill positions in Canada for electricians, artic drivers, concrete finishers, welders.”

HSE urges people to get vaccinated against flu


Up to 1,000 people could die in a particularly severe flu season, according to immunisation office

The Health Service Executive is urging people in at-risk groups to get vaccinated against the flu.

Those in the at-risk groups are everyone aged 65 and over; anyone over six months of age with a long term illness requiring regular medical follow-up such as chronic lung disease, chronic heart disease, diabetes or those with lower immunity due to disease or treatment; pregnant women; and residents of nursing homes and other long stay facilities

This year’s seasonal flu vaccine protects against the three common flu virus strains expected to be circulating this year based on advice from the World Health Organization.

It is important for all those in the at risk groups to be vaccinated again this year as the virus strains in the vaccine have changed since last year.

The flu jab is available from GPs or pharmacists.

Anyone under 18 should attend their GP. The vaccine and consultation are free for those with a Medical Card or GP Visit Card.

Research by the HSE Health Protection Surveillance Centre, as part of a wider European study estimates that over the last eight flu seasons between 200 and 500 people in Ireland died each year from flu related illness, and up to 1000 people could die in a particularly severe flu season, according to the head of the HSE’s National Immunisation Office, Dr Brenda Corcoran.

“This study starkly highlights that flu can be a very serious and sometimes deadly illness, especially for people who are older or who have a long-term illness. The flu vaccine is the best defence against flu, yet every year many people in the at risk groups fail to get vaccinated and so put themselves at risk of serious illness or even death,” she said.

Why we’d be mad to rule out climate engineering

Spice pipe and balloon experiment     

If climate change continue then all options to lessen its impact, including geo-engineering, must be considered as a last resort

Tests to see whether climate engineering work could see water droplets sprayed into the atmosphere.

The release of the report by the International Panel on Climate Change (IPCC) last month threw into stark relief the clear message on anthropogenic global warming and sounded the direst of warnings against our continued inaction. For the first time, and to the alarm of some, discussion on geo-engineering (or, more correctly, climate engineering) was included in the report.

A single paragraph couched climate engineering in cautious terms, in bland language, and stated that deliberate intervention at large scale would be an imperfect solution with potentially serious negative side-effects. Even that level of caveating prompted consternation from some quarters who said, with limited legitimacy, that inclusion of climate engineering in the report somehow normalises it.

There often appears to be no role for cautious moderates who see the value in careful, thoughtful and transparent research in this public debate.

You are either to be damned for even thinking about climate engineering, and assumed to be in it for money or glory, or you are pandering to the anti-science, anti-technology eco-fascists. Most serious thinkers, however, sit somewhere between the two, broadly positive about careful research without severe climatological or societal impact but instinctively against deployment. Although the point is laboured, a distinction between research and deployment must be part of one’s personal framing.

Mine is simple. We are better off knowing everything we can about all our options, however unpalatable, while being mindful of undermining efforts on greening our energy sector and, more than that, our own lives. Deployment of technologies at global-scale with trans-boundary effects must be a last resort.

Personally, I believe the IPCC should have gone further and stated that climate engineering deployment should only be considered under careful and robust global governance, only in time of great need, and only when it is clear that we are a long way down the path to decarbonisation.

This last point is a current focus of debate and here we might look to other disciplines where prerequisites are common. For example, quitting smoking is a necessary condition for a lung transplant. The critical point is that difficult decisions are made impossible without an evidence base. No one should be racing to deploy a particular technology now, but careful, transparent and objective research is needed, given the gravity of our situation.

However, there are some high-profile and vocal objectors to even thinking about deliberate intervention. Al Gore thinks those researching geo-engineering” are “crazy”. Clive Hamilton, author of Requiem for a Species, is a vocal opponent, citing sinister vested interests and a lack of transparency in his latest book Earthmasters. It is not clear how Hamilton, after having written about climate change and the end of the world, could then write a book about those who would even consider solutions that don’t fit his worldview, and rationalise his position.

Lastly, cultural historian Philip Hoare squared up to astronomer royal, Martin Rees, in the Guardian for daring to suggest that we might have to think about climate engineering. Hoare strikes out to decide for himself how good or bad various options are for “plan B”. He even goes for a tabloid-esque “apocalypse rating”, failing to inject some ironic humour into a subject where it is clearly inappropriate. I have some questions and challenges for Hoare, and Gore and Hamilton:

• Your current stance undermines your previous assertions on the severity of climate change. Can you imagine no future scenario where climate engineering might be justified?

• Show me anywhere on the Keeling curve where the environmental movement (which I consider myself to be an ardent supporter of) has made the slightest bit of difference to the amount of CO2 in the atmosphere.

• Why do you insist on wilfully confusing people who research climate engineering with those who blindly advocate deployment?

• Suggest an alternative given the probable failure of conventional mitigation and severe climate stress. If it involves “a new energy system” or “a wholesale change in personal-to-global attitudes and geopolitics” then please tell me when this is going to happen.

Here’s my take. We’re probably not going to sort ourselves out in time and it will take some pretty serious consequences for the necessary political will to be garnered.

We might get lucky and change our ways before some apocalypse but, even so, the most vulnerable will suffer greatly. We will have had many opportunities to avoid such hardship and not taken them: we can hardly claim that global warming is unintentional now, and someone, somewhere will try climate engineering at a global scale, whether it be for self-interest or out of genuine fear, or both. Or maybe not, and maybe we’ll sit on our hands and watch the drier parts of the planet burn in hell.

Either way, knowledge of, and evidence about, potential climate engineering solutions will be at a premium. How can we ever be better off not knowing?

To suggest otherwise smacks only of quasi-religious dogma. Yes, there are spineless politicians looking for an easy route (hint: this isn’t it, doesn’t even look or smell like it) and yes, there are lunatics who might try this unilaterally – strong governance is needed now, even on small-scale outdoor experiments.

Yes, by all means challenge the science, the ethics and the issues around ownership, intellectual property and governance. Challenge those who appear unreasonably enthusiastic or those with ambiguous motives. What is really needed is decent, fair-minded and robust commentary.

To start with, stop suggesting the Spice project was cancelled due to a public outcry. The truth is that the project team itself called off 10% of the project due to our own discomfort around ownership and governance of the technology, and to suggest otherwise belittles the agonising we went through.

Climate engineering research is vital to prevent misinformation and poor decision making. Humility and thoughtfulness among those researching climate engineering must be our leitmotif.

Very few serious researchers are strongly in favour of deployment. Most, like me, would see it as tragedy; nothing less than a total abdication of our responsibility of planetary stewardship, were we to actually get to the point where deployment of global climate-altering technology was deemed necessary. The IPCC’s latest report clearly indicates that with every decision we make to value the economy more highly than the environment we make climate engineering more likely.


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