Jill Kerby

CANVASSERS AT YOUR DOOR? HERE ARE SOME QUESTIONS FOR THEM

Some people dread political canvassers knocking on their doors, especially if they are still eating their supper or about to sit down to their favourite TV programme. Around here, canvassers who knock on my door are the ones who should be in dread.

“Will you give us your Number 1?” they ask with a big smile.  “Only if you tell me how your candidate/party stand on certain issues,” I reply with an even bigger smile.

I share the great HL Mencken’s view that every election is nothing more than “an advance auction of stolen goods”. But I grudgingly accept that ‘democracy’, however flawed, with its illusion that every vote counts, is still better than a outright monarchy, theocracy or single party dictatorship.

The reality is that our style of national government – elected, but parochial and  with power highly concentrated in a small, senior committee of ministers (and mandarins) within the greater cabinet means there is very little policy that the ordinary citizen can influence through the ballot box. Our membership of an increasingly powerful, centralised and autocratic European Union and the globalisation of the powerful financial industry has emasculated the power of so-called sovereign nations.  

In the end, much of the promised reforms and changes we hear from aspiring politicians on the doorstep is just noise. This is why it’s so important, regardless of what party gets in – that you do your best to build a personal financial ark for yourself and your loved ones.

This means understanding exactly who you can and can’t control, especially about the financial issues that affect your life. These include the amount of money you earn and how much tax you pay; how you spend, save and invest the money the government allows you to keep; what schools you send your children to; how you access healthcare and take responsibility for living as healthily as possible, and how you wish to live in retirement and old age.

These are some of the issues that the senior politicians can influence and change. There’s a chance that you might be able to plant a kernel of an idea or a reform of existing policies or taxes or charges that could actually be delivered for the good of everyone (and not just their favourite constituents or vested interests).

Here are some such issues that I plan t raise, starting with taxation ones:

-        The Irish government has no control over interest rates as we do not have our own currency. But it does control deposit interest and investment exit taxes. At 40% and 41% these taxes discourage prudent saving and investing and should be reduced or abolished. The 40% DIRT tax – a compulsory higher rate tax on income - is also charged on child savings, despite children (or their parents on their behalf) not being permitted an annual individual income allowance.

-        VAT at 23% is one of the highest rates in Europe. Lowering it back to 21% or lower will encourage consumer spending and boost domestic job growth.

-        The reduction of USC is welcome, but what about equalising the rates? Why are only self-employed people subject to the 11% rate on income over €100,000 and not everyone who earns above this arbitrary amount?

-        Some self-employed people are demanding access to the same social insurance benefits that apply to PAYE workers, for whom employers pay 10.75% PRSI in addition to the workers’ 4% gross income contribution. This option (to pay 14.75% PRSI on gross income) should be introduced.

-        Only people with natural, adopted or foster children can leave the maximum €280,000 worth of their assets tax-free to these heirs. This discriminates against individuals and couples who cannot have children of their own or who are unable to adopt. This arbitrary, tax-free sum should be extended to adults with no offspring.

-        If public servants are to receive a refund of all or part of the Pension Levy imposed on them since 2010, so should the €2.4 billion pension levy on private sector pension fund holders since 2011 be refunded.

-        All state and public sector Defined Benefit pensions (which are neither adequately funded nor invested) should be converted into funded/invested Defined Contribution ones.

-        The state old age pension is unsustainable and has to be reformed. PRSI contributions earmarked for this benefit should be voluntary.

-        Hundreds of millions of euro have been lost in the misselling of investment and insurance products due to commission remuneration. Commissions should be abolished.

Jill’s 2016 edition of the TAB Guide to Money Pensions & Tax is now in all good bookshops. If you have a personal finance question for Jill, email her at jill@jillkerby.ie or write to her c/o this newspaper.