We penny-pinch on water yet lose thousands to USC

Bank charges usually tot up to no more than a couple of hundred euro a year. If you put your mind to it and switch banks, you could save maybe 50 quid.

That’s worth having (see main question) – but there are bigger fish to fry. Switching mortgage lender takes much the same effort – yet it could save 30 grand.

But only 38 out of 684,000 mortgage-holders switch each month, a Central Bank study showed. That’s not the only example of skewed financial priorities.

Every year we avidly await tax breaks at Budget time.

Governments stand or fall based on whether we get a few hundred extra or not.

Yet a fortune in tax breaks goes a begging because we don’t bother to claim them – €880 a year, according to Taxback.ie!

Another costly financial contradiction is our aversion to paying fees for advice.

Fee-based financial advisers are few and far between. Instead we have thousands of commissionbased brokers. They get ‘a cut’ on the products they sell, or steer you into.

But how good is their advice if they get thousands more for picking one product over another?

The Central Bank works itself into a tizzy scrutinising these guys, yet controversies keep popping up that wouldn’t happen if we just paid a flat fee for fair advice.

Another misplaced financial priority is the trade off between water charges and universal social charge.

Whatever you feel about water charges, they were already whittled down to €13 a month, while USC can cost thousands.

USC is the hammer blow of austerity designed to cut through all the fairness built into the tax system to grab your gross income.

Yet while water charges cause uproar, we’ve hardly heard a peep of protest about all the pre-election promises to abolish or slash USC (from many parties) being shelved to pay for ever-more pledges to independent TDs.

Somewhere, a media consensus emerged assuming that we weren’t interested in cutting USC any more. We had become devout socialists overnight, apparently, and wanted all the money that would have been used to cut tax instead spent on social services and pandering to independents.

At heart, Irish people probably lean a bit to the left. But most feel we’re already socialist enough with a third of our income paid in tax for social transfers to the less well-off.

Maybe if we lived in Scandinavia, we wouldn’t mind paying more tax for better services. But not here. We know that if we give our politicos any more money, the chances are they will just squander it.

It would be far better to iron out inefficiencies first – such as the €700m spent on over-priced pharmaceuticals by the HSE.

So why do we still hand over thousands in USC without a quibble, while we kick up blue murder about water charges?

Like the five-grand commission trousered by the broker for ‘free advice’, and unlike water charges, we don’t pay USC separately.

We don’t think about it as much as we would with a separate charge. Water is also tangible, essential to life and easy (if sometimes wrong-headededly) to wax lyrical about. USC is an accountancy exercise. Who’s going to get angry about that? Unlike water charges, we also don’t see how badly our USC money is spent. It disappears into the bottomless tax pit.

Ironically, we might be better off with less general taxes like USC and more targeted charges like those for water, where we can see (and get annoyed about) where our hard-earned money is wasted.

That’s not going to happen. The USC/water charges saga proves that the best option for politicians is to pick our pockets with general tax rather than splitting things out into identifiable charges that people get upset about.

USC will last for years, just like the ‘temporary’ income and health levies it replaced in 2011.