Christmas Bonus scrapped

by Bob Cratchit Wed Nov 11, 2009 20:23

Does the government really think those on welfare hoard their Xmas / Hannukah / Holiday bonus?

Oh well if they did they could over years accrue enough to put a deposit down on a blackberry.

But no. They don't hoard or save it or even have the less than feckless wit to put it aside for a snowy day.

All Social Welfare payments are returned within days to the Economy primarily through the utility or retail sector.

Ergo .:. 223,000,000€ less will be spent in the Irish economy this Christmas.

How much does 223 million stimulate a moribund retail sector?

How deflated might it be without it?


& then they are the kiddies........ maybe they'll invest in flu remedies for them.

by Shopper Wed Nov 11, 2009 23:29

But the major supermarket chains have the retail sector so by the balls that that money will mainly flow into their accounts abroad. Poor people buy the cheapest food out of necessity and that is to be found in the likes of Lidl and Aldi and Tesco. These stores are a major problem to our ailing economy as they are holding Irish agriculture to ransom and laying waste to the local retail traders because they cannot possibly compete. Whilst it is true that poor people spend their money and are the engine of the retail sector, the fact that these few foreign chains control the market means that this money will largely go abroad.

Now if we started to build Co-op non profit supermarkets like they do in some other countries, employing locals and using mainly local produce which they pay a fair price for, THEN we would be moving in the right direction and money spent by people on social welfare would stay in the economy instead of fleeing abroad..

by Cecil R Thu Nov 12, 2009 14:11

The Scrooge analogy is facile as he was wealthy but just would not
spend it and it was his own money. If the Government were to pay the
Christmas bonus it would have to borrow the money on the international
capital markets and add it to the debt burden of future taxpayers -
social welfare recipients and others alike. Moreover the Government
manages money in trust for the community as a whole - it is not in
some sense under the ownership of the Government. It belongs to the
people whether it is raised by borrowing or taxation.

The economic analysis presented here is also facile. Welfare
recipients may spend their money with a higher propensity than others
but they will spend it on imports as well as domestically produced
goods and services. The country has a high marginal propensity to import
so much of the bonus if paid would leak out of the economy.

by TaxHaven Thu Nov 12, 2009 22:23

are they not closing all 100+ tax loopholes before attacking welfare recipients? It's only right. And why are we not up in arms about this? It seems it's ok to rush through taxes on the poor but feet get dragged when it comes to the rich. Says it all really

by Cecil R Fri Nov 13, 2009 00:46

The measure is not an “attack” on welfare recipients. It is the withdrawal for this year at least of a discretionary extra payment which is not part of the social welfare code proper. It was very well flagged in advance. Remaining tax loopholes should be closed too where they no longer serve a useful purpose.

The working poor and self employed are often poorer than welfare recipients. See the article on comparisons in the Irish Times today. This puts the argument about the Christmas bonus in some context.

by Sean Fri Nov 13, 2009 13:14

Of course the withdrawal of the Christmas Bonus is an attack on the poor. It may well be a discretionary payment but it is an essential one for many thousands of families.

The Scrooge analogy is very appropriate. Like Scrooge, this is a wealthy country, one of the wealthiest in the world in fact. This is very evident from its ability to give the banks a massive financial guarantee to prevent their collapse. The cost of the Social Welfare Christmas Bonus (as outlined in the above statement) is a mere 0.5% of the cost of the bank bailout.

Like Scrooge's initial reaction, until he was confronted by his own mortality and the spectre of the type of world his policies would create, the government's (and Cecil's) reaction is one of Bah Humbug!

by TaxHaven Fri Nov 13, 2009 17:14

"Remaining tax loopholes should be closed too where they no longer serve a useful purpose."

I think this sounds like "the ghost of Sceptic past"!!!. Of course there's no hurry with those loopholes really, unlike the xmas bonus. That needs to be rushed in along with other cuts to the poor. Maybe idly consider those loopholes in the summer, or maybe the summer after that. Wouldn't want to shock the rich people by taking them away too suddenly would we? No, the poor are better able to cope with such things. Bah humbug indeed! Merry xmas cecil ( sceptic II). I'll be thinking of you when, as an unemployed dad, I shop for my kids with 200 euro less in my pocket.

by Cecil R Sat Nov 14, 2009 10:02

The “poor” are not the same as welfare recipients and only a minority of welfare recipients have dependent children. Many thousands are not in families at all though the words “poor”, “vulnerable” and “families” are much bandied about in this debate. Many of the real poor are working and their taxes will have to go to paying this bonus to non-working and often wealthier welfare recipients. There is provision in the welfare code for extra payments in the case of seasonal expenses and hardship and tens of millions are spent this way each year. The Christmas bonus is as blunt, as inequitable and as wasteful an instrument to address hardship as can be imagined and should be abolished altogether.

As far as the public finances are concerned this country is almost insolvent. There is an appearance of normality because we are borrowing five hundred million a week. We seem wealthy because we borrow so much to pay ourselves such high public sector and welfare payments. Note that even 0.5% of the contingent cost of NAMA is huge amount of money that will have to be borrowed thus increasing the debt burden.

If the banks are not sorted somehow the economy will collapse altogether and what future for welfare payments then? A conservative guess is that the IMF would abolish half of all welfare payments and reduce the rest by between 50% and 70%.

The welfare bonus was bought in at a time when payments rates were very much lower in real terms then they are now. The bonus was brought in cynically in 1980 by Haughey to buy the following year’s general election and since then no Government has had the cojones to stop it until now when circumstances force themselves.

Nobody would have accused Scrooge of being stingy if the had refused to borrow money on behalf of his clients so as to pay it to other people whether they needed it or not and and where his clients faced insolvency and were not in much of a position to protest.

by Unemployed Sat Nov 14, 2009 18:07

"If the banks are not sorted somehow the economy will collapse altogether and what future for welfare payments then? "

Well, what about the credit unions? or a GOOD BANK? Economy will not collapse. It didn't in the past when banks failed. It won't now. Thats just scaremongering.

NAMA will not get any real credit flowing. That is not really it's purpose at all. Banks will just use the money for their own ends, possibly to even start speculating again.They have no stomach for lending to plebs at all. They never really did at the best of times.

I agree that welfare needs to be cut to balance the books but the type of welfare that needs cutting is CORPORATE WELFARE and EXTERNALITIES.

As for Anglo Irish bank, Your argument falls flat there Cecil. No money will be lent from Anglo. Yet a large part of NAMA is to do with Anglo loans. And most problem loans were to a total of 30 people. Quite fishy! How does that equate with your welfare theory? Its Corporate / Developer / Banker welfare, plain and simple. Should we cut that too? Pah!

Tax loopholes first. Then take the passports off tax exiles. Then cut Anglo out and let it die. Then re-negotiate the "ray burke" corrupt gas deal with shell.
(more corporate welfare)

Then slaughter the foreign supermarket chains with special "community destruction" tax. (more corporate welfare / externalities)
Then set up a good bank and local non profit supermarket co-ops who pay Irish farmers a fair price and whose money stays in the community.

Get the private health companies to pay the public health system the millions they owe or withdraw facilities from them. They owe MILLIONS!! Corporate welfare? (more corporate welfare / externalities)

Abolish the HSE and simply place one administration office in each hospital and open one co-ordination admin office, then give each hospital a budget based on population it services, allowing inter hospital co-operation through co-ordination office. A special swipe card for every patient with med details on it.

Bring in a "drink tax" in A&E of say 200euro. If you are drunk in A&E then you pay a drink tax before being seen. Too much health resources are wasted on drink related injury etc. If you were pissed, you were asking for it. Let the drink companies create a fund for such people since it is their product that is responsible. Remove cheap drink from supermarkets by taxing it to death. (more corporate welfare, taxpayer paying for the results of selling a product)

I'm just throwing out a few ideas here but some of these measures would be a start. There are many possibilities if only those in power had backbone and were not just servants of the rich. As it is going, they will drive the country into the hands of the IMF. while systematically attacking the poor whilst ignoring the real welfare problem in Ireland: CORPORATE WELFARE

by Cecil R Sun Nov 15, 2009 16:07

I don’t defend NAMA but most expert opinion favours some initiative to salvage the credit system and this crisis has no precedent in the history of the State. Arguing about the banks or other revenue possibilities does not obviate the need for major spending cuts of which the non-payment of the bonus is a part. The crisis is so severe that both cuts and a broader tax base are needed. Meanwhile it is excessive borrowing that threatens insolvency – measures need to be taken very fast to arrest the position or there is risk of insolvency. New taxes on capital or A&E charges are not going to deliver meaningful savings soon.

by Sean Sun Nov 15, 2009 18:58

The bellow of Mr. Bumble rings loud as he responds to hungry Oliver's plaintiff request for more gruel.

None of these so called experts have ever had to live on a pittance. These wouldn't be the same experts that told us that the boom would come to a gradual end rather than a sudden crash (the Smooth Landing theory), would they?

by Fred Johnston Sun Nov 15, 2009 19:10

So what do we propose to do about it as the government continues to shit all over us and protect their friends at the same time?

by Cecil R Sun Nov 15, 2009 21:42

Protesting about the non-payment of the bonus is the wrong issue. This is an inequitable and untargeted transfer to welfare recipients already in receipt of very high rates of welfare and pension payments. The people paying for it and not getting a bonus are themselves often a lot poorer than the welfare recipients. Even if it could be afforded the bonus should be discontinued. It was only ever an election gimmick that became a habit. Now that it cannot be afforded it should certainly not be paid. Entities like the Workers Party are just garnering cheap publicity for themselves out of this.

by Socrates Mon Nov 16, 2009 00:47

so we know you are against the xmas bonus. Lets hear your other theories as to what should be done. How should rich people contribute? Any thoughts there?

by Cecil R Mon Nov 16, 2009 20:13

Who are the rich or rather at what point is the threshold between rich and non-rich? This is an important question for those who shout “tax the rich”. This thread is about the Christmas bonus and not taxation. However the purpose of taxation is not to “tax the rich” but to provide sustainable revenue for the public services. New taxes cannot solve the public finances problem in the short term except to a very limited extent that they are punitive heavy new payroll taxes on the public sector only including the commercial semi states and the 7/24 allaince. In the medium term a reformed tax system should tax all income (including from social welfare receipts) at a non punitive rate; capital gains at about 20% and in my view also a fixed annual tax property and land – the centrepiece of a new tax to supplement the present direct and indirect regime. Wealth taxes won’t work at least not in Ireland. Generally the canons of Adam Smith should be followed with great care. They are an unsurpassed guide to good practice even after more than two hundred years.

by Bob Cratchit Tue Nov 17, 2009 10:48

If we may measure poverty in percentages; such as the percentage of income which is capital to be saved or must be expended on food, lodging or utility then so can we do alike with wealth. If we may exclude the poor from life insurance, private health insurance, private education & private transport then so can we include the rich in not only all expenditure (the benefits of which for the most part go outside the national economy dear Cecil) of such types but reserve for them the highest premium policies of insurance, the most expensive education & the biggest or fastest cars complete with extras.

If we may exclude the poor from adecquate nutrition and note that many hundreds of thousands in Ireland as millions in Europe suffer what is termed "food poverty" and thus do not starve in a third world sense of malnutrition but may not readily afford a balanced diet then likewise we can include the richest amongst those who have access to the finest food.

If we may speak of the poor in rags with crooked teeth we may also speak of the rich in their finest cloth bedecked with jewels.

The poorer one is the more of one's income is spent on merely staying alive & the more certain one is to stay alive for less time.

The richer one is the more of one's income may be put aside for a rainy day, a sunny day, a fine dust of snow on the Alps day or a lazy day on a deserted beach. The richer one is the longer one lives.

It ought be very clear.
But I suppose Cecil is looking for precise figures in the sense the most dismal of sciences, "economics" enjoys?

How about 10 years less life for the poor and 10 years more life for the rich?

by AndyB Thu Nov 19, 2009 12:54 snoopyb510 at yahoo dot co dot uk

The decision not to pay the Christmas bonus this year is wrong from more than one perspective.

I myself have been receiving it in the past year. After an accident I have become disabled and was no longer able to work. Finding a job, being sidabled at the moment in our economy is nigh impossible - I've tried and I've tried hard. Having three children, the Christmas bonus has helped us give our children a Christmas in the snse of having a few presents for them, a decent Christmas dinner and having a few Euro for the added bills on heating and electricity last year.

This year...a different story. The only way to have a Christmas will be through lending money. Of course as unemployed and disabled there is not a snowballs chance in hell to get a loan from a Bank, so we'll have to go to a money lender which will add to the problems. The choice is a tough one - Christmas for our children on the cost of going from 'barely getting by each week' to 'basically impossible to get by each week', or no Christmas for our children.

Those who say it is good, justyfiable and reasonable to axe the bonus should try and live on the bare essential minimum, should try to have to explain to their children why there is usually no money all year to give them anything at all, why there now won't even be a Christmas.

Taking money from those who need it the most, those who are heavioly dependant on help is wrong. Sure, the bonus is a "voluntary" payment. Is it moraly right for a country that claims to care for it's weakest citizens, to be social, to want to work actively against poverty and help those in need, to scrap a bonus like that? Not really. Not when money has been squandered away, even this year.

Will there be a price to pay for the Government? I am certain there will be. Those who are being left alone this year at Christmas, who are left alone by their Government this year at Christmas will surely remember it come the next elections.

I sincerely hope that those supporting the axing of the bonus will have a very very happy Christmas and they should enjoy it. The situation where they might find themselves on the opposite end of the table can come faster than they think.

by Father Christmas - For Rich and Poor alike Thu Nov 19, 2009 16:28

Andy B

Such common sense. Why is the Government so inept?

Are politicians so far removed from our history and the impact of the money lenders, the pawn shops etc.

Christmas is not the preserve of the rich, it is for all people to engage with. It is about Caring and Sharing. It is the exchange of gifts from one person to another as an affirmation of the fact that caring and sharing is still core to the human being.

Before the Budget let us have a chance of regaining the ground of a grant of the Christmas Bonus.

Let there be a mustard seed of honesty enter the equation and factor in an equivalent amount to the cost of the Christmas Bonus, to people who need and to their families.

Savings can be made in the most extraordinary of ways so let us start thinking!

For a start - what about the 342 million missing in old Irish currency?

What about on the next Strike Day encouraging all to give up their brown change and make the Banks work a little extra and investing it in a Fund for our National Debt!

What about giving the bonus and explaining to people why they ought to buy Irish goods this Christmas?

What about buying vegetables based on the season, buy Irish and even look to home grown markets?

The US$ is losing ground internationally. This means we purchasers in Ireland can go to the US and buy cheap. This is often the preserve of the rich in cash. Let's appeal to their nature and encourage them to change tack this year and buy locally.

I am sure there are lots of ideas for the Taoiseach Mr. Cowen. He after all, can always change his mind, and being from Co. Offaly, he must appreciate the benefits of home grown ideas.

by RatsDesertASinkingShip Thu Nov 19, 2009 21:37

The politicians don't care what a basket case they are making this country into. They can retire somewhere else on their fat pensions and payoffs and expenses. Somewhere where you can get proper healthcare and public transport and park your yacht safely. As for the rich, well they can do the same.

by AntiGovernment Sun Nov 22, 2009 15:54

Ok im not one for going into a big long shpeel about this but can they be allowed to get away with this, whatever there reasons are ? Surely there not doing themselves any favours and opposition parties with have a field day with this in the up and coming elections. What im trying to say is will this destroy the present government. I hope so. Surley they have gone too far taking away peoples christmas bonus. How can they even try to justify it.

Someone please tell me that they wont get away with it. PLEASE !

by Accidentallypoor - Life Mon Nov 23, 2009 19:38 imyourstruly at hotmail dot com

I find myself in a position that I never imagined and though some of it was bad decisions made in times of extreme stress(from marrying a complete and utter abusive and violent A******e and then getting divorced) I also had an accident at work (as an A&E nurse) which has led me to be surviving on Disability allowance.

A few of years ago I would never have envisaged this scenario; me alone with 2 children to feed and keep warm, presents coming as very much a third concern this Christmas.

I do not own my home, I have no other means of income and though I have heard people comment that it must be wonderful not to have to worry about paying a mortgage, well you know I think that the uncertainty of not knowing whether I will have to move on at any stage if the Landlord decides to sell ( he like everyone else is struggling Im sure) compensates for not knowing if I can pay the mortgage, after all I have also been in that position.

To have the thought that at Christmas I would be able to purchase some gifts for my children was so nice.

I do hope that the Goverment ministers and party Officials feel good spending masses on expenses, expensive taxis, chocolate fountains and parties to please each other.... dont give a thought to those who cant do anything to help themselves, you keep yourselves warm, turn up the heating a little higher and browse through the skiing holiday brochures, God forbid that you might have to have just the one family holiday this Winter.

As for the dear Mr Cecil, of course your idea for giving a fine to those who come into A&E pissed is in principle a grand one. BUT, have you ever been in A&E? Have you ever worked there with real people?

I can tell you that I have dealt with lots of kids and people of all ages who for one reason or another have ended up in A&E with drink related problems and if we were to throw a huge fine at them to go along with injuries physical and mental, sustained by the accident or incident, it would destroy so many of them.

Get real man, you are just plain bitter and living in your cosy little house methinks. Have you ever been one of the 'poor' whom you claim to know so much about?

Last year before Christmas, the Australian Government gave all its citizens a payment, this consequently went directly into the economy, and though the Government got into greater debt, the wheel kept turning and kept them afloat. The moral was also boosted no end Im told first hand. Making people feel better motivates them, quash them and they get sick.

If our Government wish to get this Economy going, they should stop stifling the people at the bottom who are compelled to put the money straight back, they dont have a choice to save it!! It has been proven in the past that putting money back into the pot is the only way......Spend our way out of a recession, that doesnt mean huge credit for people, just let people live a little and get the Economy going again.

Cut expenses (ie Duck ponds and Wisteria plant trimming in the UK, sure this place is no different) Stop bonuses to the already wealthy and take a good look at your own life and think how lucky the majority of people are.

I still consider myself to be extrememely lucky, Im alive and well and have two wonderful children with me.