Government View:

The Irish government appears to favour the "lets get more money from those still working" approach. The problem with this is where to strike the balance between what is reasonable and what is beyond fair. Having just witnessed another budget, the first thing that struck me was the increase in the health levy, and I worked out that this would have a much higher impact than any income levy doubling that appeared to catch every commentators' eye. I'm bemused as to why, on day+1 of the budget, not one of our so called "tax experts" mentioned the real impact of the health levy and how it alone would be responsible for a huge tax hike. Tax analysts, take a bow for being so short-sighted. I'm now certain that I know more than you guys!

In any case, I do feel that the government are beginning to take too much. Surely there comes a point at which it is morally wrong to take too much? We're not at that point yet, but if future budgets continue to take from the middle classes and taxes continue to rise, as has been hinted at already, then I believe that the person in the street will revolt in his or her own way.

People Power:

As we lose more from our pay packets, our natural inclination is to spend less. And its that very factor which, in the end, will force the government's hand. And it's absolutely brilliant because we, you and I, really do have the power. It's all about how wealthy each of us think we are. If I go out tomorrow and fell "wealthy", I am automatically inclined to spend money. If I feel ripped off, then I will keep my hard earned money in my pocket. That's what I mean by the coffee culture. I'm not specifically talking about coffee, but I am taking, in general, about the raft of goods and services which have grown to support my every whim and desire, during the boom times.

I want to go on holidays -- where can I fly to ? I want to have a haircut every 2 weeks, I want a coffee from that shop on the corner before I get to the office. I must have this, I must have that...... and so on.

Guess what, I don't need any of it. But here's the important point - the government NEEDS me to go out and spend money on these services. By spending this money, they get double the tax, because of VAT. All governments do. Spending like this then increases the governments revenues, it creates more demand, thus creating more jobs, and suddenly... boom-- we're in the good times again.

Now, how do you think the government will get us to that critical "spending point" again? By taking more in taxes, that creates the inverse effect. That creates a society of savers. A society of being cautious with money. A society that our fathers and mothers endured for so long in the 60's, 70's and most of the 80's. Is that what this government want - do they want us to wait 10 slow, painful, taxing years before we feel wealthy again ? If so, they're certainly going about it in the right way !

Reducing Expenditure Tips:

I don't feel wealthy, so I've decided to revolt in my own way. This is what I'm doing now or planning to do very soon:

a) buy electrical items from a non Irish website, where VAT is charged at the local country's rate. This is one thing I really don't want to do, but I'm loathe to give our government more VAT until such time as they reduce the VAT rate to account for the recessionary times we live in. Alternatively, go out with cash to a local Irish retailer, and offer him a cash price which is appx. 90% of the marked price of the item. You can draw your own conclusions about what inference I am making. I'm certainly not advocating that the retailer break any law. But I do want our government's VAT take to reduce in order to force them to reduce the rate...

b) Don't use toll roads, where possible. Plan your journey so that you leave earlier, allow more time and take alternative routes which don't force you to pay for something which you have already paid for in road taxes. Our road tax is already very very high, it's criminal that any toll roads have ever been allowed to be built in this country. The so called "experts" would have you believe that tolls are an accepted worldwide model. That's correct only in the context of much smaller road taxes elsewhere. Show me another country with road taxes as high as ours? Again, not fair, so revolt...

c) Save every penny in a post office or high interest account. Try not to stuff everything in a low interest demand account, perhaps look to split some into 1-month or 3-month notice accounts.

d) Get rid of subscriptions that you don't need. That includes subscriptions to gyms, satellite channels you don't or rarely watch, book and magazine subscriptions and so on. My direct debits are already beginning to reduce.

e) Landline Phones: reduce phone costs by shopping around. If you still have a landline, like me, look at various offers from other providers such as Talk Talk, BT, Perlico etc as bundle deals can be much cheaper. Alternatively, if you have a really good, high bandwidth, reliable broadband connection (3Meg+ minimum) then consider swapping to a VoIP based service, which have minimal line rental charges and cheap phone calls. You can retain your existing number also.

f) Mobile Phones: stop talking on your mobile to someone you'll see an hour later, and use it for emergencies instead! What a novel and money saving idea. 15 years ago we never needed mobiles. I know some people who spend EUR40+ every month, most of it not needed. Stop talking, unless absolutely necessary. Keep calls short, and change to a pre-paid account with non-expiring call credit. 

g) If flying, don't buy any food at airports, ever. Ever. EVER. The biggest rip off in the western world. Airports were built on dirt cheap land, outside of towns and cities. So there's no real "high rental" cost. High rentals were introduced by airport owners, seeing that they had a total "captive market" for goods bought on site, hence leading to the absurd prices the service operators now charge. In most cases food costs in airports can be 250% more than at the highest prime retail locations in the world! Plan ahead, and just buy the occasional drink airside. Bring your own sandwiches.

h) Car share where possible, especially on school runs. For people living close together work out rotas so that everyone benefits.

i) Swap your electricity provider - we finally have a choice, so vote with your feet therefore enhancing competition and reducing the cost to you.  While on that subject check and reduce energy costs, see the energy saving tab for more.

j) Stop buying a paper everyday and listen to the news instead. At almost EUR2 for a non-tabloid version it's too expensive in Ireland. Perhaps buy one a week instead. Another small fortune saved. 

k) Resist the impulse buy - one of the hardest things to do. You've had a bad day, you see something you like and you say to yourself.. "I deserve that". Think about it first. But it's important not to give up too much, so set yourself an allowance for small niceties per week and stick to it. That sticky bun sure looks tempting...

Rant over for now. 

R.