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THE GOVERNMENT WILL clock up a bigger deficit than expected next year because of the hit to the public purse from Irish Water, the ESRI says.
In its latest quarterly economic commentary, the economic think-tank said the forecast revenue from water charges in 2015 was “likely to be less positive than previously expected” after developments over the past 3 months.
That would force the government to boost its subsidies to the controversial semi-state agency and would punch a bigger hole in the budget deficit – which the ESRI predicted would stand at 2.4% next year.
It had forecast a deficit of only 2.1% in its previous commentary, which came out about a week before the Budget was handed down.
But the ESRI noted the government faced an even bigger time bomb in the form of Irish Water’s market test from the European Commission, which it need to pass to keep the quango off its balance sheet.
If it fails to receive at least 50% of its revenue from private sources, its borrowing must be included in the general government deficit, which poses a further risk to the 2015 deficit forecast,” the commentary said.
The ESRI predicted the government would have to spend an extra €200 million on total subsidies next year when compared to 2014.
The market test
Last month Environment Minister Alan Kelly announced a cut-price regime of water charges in the form of two flat rates that will last until the end of 2018.
The government said the two rates – capped at €60 a year for single-person households and €160 for all others – would bring in €271 million, on top of €229 from businesses.
In return, it expected to have to hand over €399 million for Irish Water’s operating expenses – 44% of the total, or about €50 million less than the maximum allowed under the market test.
But one recent poll found one-third of all households would refuse to pay their water charges.
Meanwhile, the government said it was targeting one million registrations by Christmas – although to meet its domestic income target it needs virtually all eligible households to get on board.
Unemployment down, growth up
Elsewhere, the ESRI predicted unemployment would reach its lowest point since 2008 next year and would fall to “just over” 9.5% during the year.
That would include nearly 50,000 more people being in work than this year, although it expected only a 1% rise in average hourly earnings for workers after several years of falling wages.
Economic growth would be over 4.5% according to both Gross Domestic Product (GDP) and Gross National Product (GNP), which many consider a better measure as it only gauges income that stays in domestic hands.
“This reflects increases in personal consumption and particularly stronger growth in investment than had previously been anticipated,” the commentary said.
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So this basically proves that water charges will have to be increased exponentially overtime?
No it proves there are one off set up costs in establishing a large scale utility and nearly all the revenue intended for supplying service and updating infrastructure for the initial period will likely be wasted enforcing compliance and chasing sponges who expect others to pay their taxes and to fund their water…
Well, the climb down the government made earlier in the year (to €160 pp) will have to be reversed.
You speak the truth. All these protests will end up costing us more than if we just payed the bloody water rates.
Agreed… Imagine the Garda overtime bill the last two months and the legal bills from the likes of Ms. I almost died being pushed into a bollard when I tried to attack the Taoiseach…
In addition to not paying their share for water, the people that do pay taxes now have to pick up the cost of our own water, their water and the bill for all of the above.
@ Drew. I still bet your not paying the higher rate that was initially introduced in the water bill. Bet you’re gonna pay the new lower rate the protesters acquired for you and still moan about it.
IW isn’t the governments only tax stream so stop stirring it.
Some great articles available online about the UK experience of privatised water, huge bonuses and bills going up all the time, average bill around the four hundred pound mark now.lots of waste and the usual phrase that lessons will be learned and shareholders approved the rises. That’s what’s in store for us if this goes ahead. If anyone thinks we’re going to have a lean efficient service here they’d want their head examined. Look at all the misleading information and cockups so far and presume that’ll continue indefinitely.
Exactly,but there’s no surprises there really,those in employment are already overtaxed but one way or the other the shortfall will land with the taxpayers, eventually everyone will still end up paying the huge water bill,not what the country needs right now, we are still borrowing billions just to keep the country afloat.
You only copped that one now Caillte.?
What school did you go to.??
http://i61.tinypic.com/4vl47n.jpg
Cailte…as sure as the hole in your arse my friend.
The regulator just reduced water bills by 5% in the UK this week.
That’s nothing compared to the 64% rise since privatisation.
Privatised in 1989… 25 years ago. If you break that down year by year compounded that’s just under a 2% rise a year. Well below The UK annual rate of inflation. Thus in real terms water bills in the UK have actually fallen not risen since their instigation…
Balls in your court kiddo…..Try and find something that hasent risen by 64% compared to its cost 25 years a go.
Careful now Drew…..The ‘ I can’t pay’ brigade don’t take too kindly to that kind of sense
sorry must have been referencing from some doggy site.
try this one. 82% in 10 years. that’s double inflation
http://www.theguardian.com/money/2013/feb/09/rising-water-bills-profits
your only kidding yourself drew if you think profits wont be maintained to keep shareholders in their accustomed life stile.
balls back in your court kiddo
Simon, would there be any chance that the water system, quality and security may have increased at all in that period? I.e are people paying more, but getting more as well. Just to compare apples with apples.
Drew . Do you not have something more important to do, like telling us to pay the banks Billions we don’t owe, or bailing out the gambling bondholders, your talents are wasted here.
And the hidden charge €40 euro on top of your bill for the meter iwill only pay my w/charge if iget a meter i can read myself
Scrapping it is the most sensible thing to do at this point. That’s unfortunately precisely why it won’t happen. Country is run by arrogant morons who reward incompetence with European commissioner jobs.
Simple solution DO NOT pay the €9 billion and do not pay the junior bond holders.
What a great idea. We’d save a fortune and there would be no downsides… None at all.
It’s not like the cost of borrowing for Ireland would skyrocket for generations turning Ireland into Argentina the second. It’s not like it would break the terms of the bailout. It’s not like we’re dependent on foreign investment who would flee at the sight of such instability.
All in all, we need politicians who represent the people and who will make decisions that are popular with the people… that always works out well.
http://m.independent.ie/business/irish/ireland-stupid-to-guarantee-banks-timothy-geithner-30738356.html this guy reckons we were stupid to pay them. Should have got help from Europe.not going alone should have been looked at.
Geithner still isn’t advocating the burning of bondholders, but that the EU should have shared the burden. That’s fair comment since the bank guarantee stemmed the tide of collapse across the EU at the time. The major fear was a domino effect, an Anglo collapse would have brought down AIB and BOI starting a chain reaction across the EU.
A lot of people are of the opinion that we should have gotten help from the eu. Can you please acknowledge that cos this insistance that we should plod on alone is getting a bit staid. Do you think it was right to saddle the Irish people with all these bank debts and not to insist on help from Europe. We should have threatened to leave the eu if we didn’t get aid.
Ciaran, this government are well practised at breaking agreements, terms etc, the irish people bailed out the banks after they gambled and lost and what do we get in return? The scourge of IW and the banks turfing people on to the streets at Christmas time. Ciaran,please wake up and look around you.
That’s the problem its not that people don’t want a better water infrastructure and good clean water for all of Ireland. Its that this is another quango, being a disaster from the start. Cronyism, lies, threats, bullying and the governments refusal to guarantee that it will never been privatised. Going by the governments behaviour last few months back peddling. Refusing to answer questions. Who would trust them
Refusing a referendum..
That’s rubbish, the problem is that people don’t want to pay for it and they’ll find something to complain about to justify it. Irish Water has been a farce but it’s just made it easier to complain about.
I hate when people say “I’d have no problem paying if they weren’t spending all this money on consultants and Denis O’Brien meters”. Of course you would, you’d find something else…
Good for them, the Gov found a right farce to extract money, we don’t need any excuse, people like you and Dennis O’B are enough.
I heard that if you don’t pay water charges then it could cause us to be more at risk from terrorist attacks and also if we don’t pay it could cause global warming!
that’s not all , if you don’t pay then Europe will suffer a huge political storm and all the mountains and rivers and lakes will be washed away and all the people who are cronies will be in a bad way so they will ………….
That’s true Hulk Smash & if you refuse to pay you gain automatic entrance to the ISIS Waterboard Supporters Group! Then you’ll spend the rest of your days being vilified by the likes of Drew & will be forevermore known as a ‘sponge’ even though you pay for water already! Great little country for sponges!
General taxation is the way to go ,spread it ,everybody pays something ,it can’t be avoided ,the problem is the management of it ,the water stay.s in the people’s hand,s as should be .
Don’t believe the the ould craic that metering will preserve the water ,if it does to some extent then the charge rate will go up ,they already stated that ( they made a mess of setting it up and rewarded the minister with a plum job I ask you where would see it ) Jeasus wept
General taxation is the opposite of everyone paying…… As its only then the producers paying.
The failed status quo has to end & the IW charge is shell of a lot better than the SF higher income tax alternative.
everyone pays tax, so everyone contributes. those with less money spend less, those with more money spend more, and we as a nation protect the vunerable. very simples
The forecast was 1.2 billion better off then expected this year so why is this an issue?
Privatisation will be the next stage if these predictions come to pass. Irish water needs to be scrapped and a comprehensive independent review of our water infrastructure carried out. The vast majority of protesters are not opposed to paying for the water they use but object to paying twice, to an unnecessary and expensive quango and to the cronyism inherent in the awarding of the gmc sierra contracts…things all citizens should be concerned about!
or just sick of this shite everyday of the week
“‘Enda’s neighbour jumped ‘better qualified’ people for State board’ reads the Irish Daily Mail. The newspaper reports that Taoiseach Enda Kenny’s neighbour and local party colleague got a job on a State board even though the Department of Education rejected him for the role.”
Not that I have any intention of paying, but I still haven’t received my Irish Water Registration Pack.. Anyone else not get one??
With everybody burning theirs or sending them back, I’m gonna hold on to mine and frame it. I might auction it later in life.
More scare mongering!
Depends on whether you know what ‘exponentially’ means. What it does prove is that the money has to come from somewhere, so by the time defaulters have been chased down (and probably let off) and GMC Sierra have been compensated for delays to their programme due to protests we will need to forget about stupid top-rate tax cuts and get on with paying for upgrades to essential services from general taxation.
Enda, is that you??
Tordelback , you must so love the current system where everyday people get screwed to protect those with money to burn.
Ok and what right would a private company have to be compensated cos people don’t want to be their customers. You live in a strange world.though with this govt in power it’ll probably happen, just give the state sex abuse victims less compensation and give it to Irish water for loss of earnings.
can GMC Sierra bring a case of their shareholders are in prison ?
And give them our road repair money too don’t forget. Have they given some from hospitals and schools too do you know?
The game goes on, they want you to talk about IW as if it always existed and always will. It’s all a con, mind games, don’t fall for it. Those dirtbags are looking down their noses at the people laughing at us. Fook them
I’m so broke it’s scary yet I know we need to pay for our water in some way so as to improve the infrastructure for future generations. I don’t think people have a problem with that?
The really scary thing here is why won’t the government set it in stone in our constitution that IW can never be privatised? I’m totally baffled as to why they refuse to do this when it would make the majority of protestors including myself a little happier, follow that by sorting out the management of the company and stop wasting money before its even been begun and we will be very happy.
The government is suffering over this and will seriously suffer in any upcoming elections yet they still refuse to give the people the guarantees they want. If a politician is willing to go against the majority of the peoples wishes then there is something going on that they are hiding from us as we know a politician will do anything to stay in power and won’t risk that unless what? I don’t know the answer, but that is exactly what they are doing and it scares me for what is to come.
I remember reading a few years ago that countries like the UK, USA and China are buying up water rights all over the world due to expected shortages in the future and spending billions on desalination. Is this something to do with why our government won’t give us the guarantee we are demanding? Will our water belong to one of those nations in years to come?
I will have to give up an essential to pay but I will pay as this is my country and it is my responsibility as much as each one of yours to ensure our children have a proper water infrastructure in the future, however I will not pay until it is set in legal stone that our water is ours and will never be anyone else’s and when people in IW management walk a day in my shoes and see what it is like to worry about having food and a roof over their heads as is my reality and many many others.
My heart bleeds for you and Dennis O’B but, I’m sure you will work out some other scam to fleece the sheeple.
We must not have all of ireland sold off to the world.
Yes, many of us worrying about just how long we can keep a roof over our heads.
These leaks and repairs are priority though and surely the water purity issues are crucial? My heartfelt sympathies to those about Galway. how long have they been buying bottled water again and again?
They’ve not been using the money they’ve been getting up to now on upgrading why would they start now? It’s all a con job…. Dont pay, don’t listen to the scaremongering… They want to sell us off and believe you and me there will be no going back then..
I will only pay for water if i can read my meter
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