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Sunday Mon€y Comment - April 20, 2014

Posted by Jill Kerby on April 20 2014 @ 10:28

ENDA LOOKS INTO HIS CRYSTAL BALL … HEY PRESTO…SEES A €248 WATER CHARGE

 

You really have to wonder what kind of PR advice the government is getting these days. 

A political coalition is always a tough gig, especially when the minor partner, which once claimed (in a different century) to the champion the workingman and the poor is being hammered in the polls.

But this FG/Labour coalition keeps scoring one own goal after another, the latest being the lack of cabinet consensus over the new water tax…er, charge.

As ex-Green ministers, Sinn Fein and Fianna Fail deputies and various independents keep reminding us, the primary purpose of introducing water charges was to encourage conservation and the efficient delivery of clean water.

From October, when the ‘charge’ begins and then from January when the first quarterly bills must be paid, only about a quarter of our 1.6 million households will have metered bills. Everyone else will get an estimated one, based on the property size, numbers in the household and which end of a subsidy you are on.

So much for a ‘free’ water allocation for all.

The Troika informed the government(s) soon after its arrival in 2010 that as the last remaining EU country with no water charge, we had to introduce one, or else.

The paymasters didn’t outline how this had to be done, which is too bad because one of them should have pointed out that plugging the leaks – about 40% of clean, treated water never makes it to our respective taps – might be a good place to start.  The simultaneous installation of meters as the repair work was being done would also make sense after which accurate, representative bills could then be delivered.

Personally, I wouldn’t even have minded paying an estimate if I could see that real progress in upgrading the system was being undertaken.

We now know that the set up costs of Irish Water, with its legionary numbers of consultants, a payroll packed with thousands of existing, unionised local authority water workers, every one of whom will keep their employment contracts for another 12 years, and the installation of meters (which will cost €570 million alone) is going to make the cost of water here just as expensive as electricity and gas - that is, more expensive than in nearly every other EU country.

After a very acrimonious cabinet meeting and a quick glance at his trusty crystal ball, the Taoiseach said that we won’t pay more than €248 a year on average. (That figure is closer to half the average charge paid by most EU households.)

The math doesn’t add up, of course: when you multiply 1.6 million households by €248 you come up with €397 million.  Irish Water needs €720 million a year in operation costs and €500 million a year to refurbish the system. (Another €500 million plus has been loaned by the Pension Reserve Fund to install the meters.)

Since so much water thunders down from the skies onto my roof every other day and then courses through the gutters back into the ground (and fills my garden water butt in about three minutes) I’m looking into ways to not just to conserve water but to bypass Irish Water.

I’ve come across a company called Waterways Environmental in Balbriggan (waterwaysenvironmental.com) that will harvest your rainwater by installing an underground tank in your garden (or attach it to your house), then pump it back in for non-drinking uses like washing machines and toilets.  It claims to reduce mains dependences by 50%.

For a higher price – and full domestic packages for a typical three-bed semi-d, the water will cost under €1,500 I was told – they’ll install filters so that you can also drink and shower with the harvested rainwater.  This represents about 3-4 years of the more likely Irish Water annual charge.

As this latest state ‘service’ fiasco gains ground, I expect we’ll see all sorts of helpful new, private sector water service companies spring up. And if they don’t deliver what they claim… they’ll go out of business.  

Meanwhile, just in case there’s any confusion outside the Cabinet, Irish Water is a monopoly… with a great future ahead of it.

 

WHAT ANOTHER FINE MESS

It is a lending requirement that if you have a mortgage, you must have a mortgage protection policy so that in the event of your untimely death, the bank gets its money.

If you stop paying your mortgage, as a terminally ill woman, an AIB customer discovered recently, and you also stopped paying the separate mortgage protection policy, the bank will come after your heirs to pay off the mortgage balance.

That particularly sad case, which involved insurance premium arrears of just €260, which is probably about a year’s worth of premiums, was highlighted by an MEP candidate, FG senator Deirdre Clune.

After the intervention of the Irish Mortgage Holders Organisation, a charity, which is contracted by AIB to process their tough mortgage arrears cases, “an arrangement” have been agreed and the mortgage is expected to be cleared.

Every debt and insolvency manager has clients who have stopped paying this insurance. Every one of their dependents is vulnerable to a substantial mortgage debt if the policyholder dies uninsured. 

The IMHO can’t fire fight every sad case, nor should they. Why would anyone (let alone an indebted mortgage holder) bother to pay this insurance if the banks took the hit every time a family man or woman died?

The word needs to get out that whatever about being able to pay your mortgage, you need to keep paying the mortgage protection insurance otherwise this terrible debt will be paid from the forced sale of the property or from another life insurance benefit (if you have one).

What another fine (property) mess. What a way to run an historic debt crisis.

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