Grinched! Paschal’s miserly Covid plan
Donohoe splurges many tens of billions but skimps on compensating consumers, short-changing us on tax breaks and protections. Bah humbug, say experts
THE European Central Bank is printing €1.85 trn (that’s €1.85 million million) in new money. And it’s giving it all away – mainly to Governments, banks and big businesses – to revitalise the EU economy. This comes after spending €2.6 trn spree to fight the last financial crisis.
The tidal wave of new money is fuelling the many tens of billions – and still counting – that our Government is splurging on Covid-19 measures.
But despite calls from some economists to distribute some of this largesse more widely – i.e. directly to us, as many Governments do – consumers here appear to be shortchanged.
I’m not an economist, but it seems to me that all this money-printing has to end in tears, or at least in rising inflation.
But whether it does or not – and in fact even more so if it does as we are the ones who will suffer – shouldn’t taxpayers be getting some of it, as they do in many countries?
Other countries are also printing money like there’s no tomorrow but they are at least giving their citizens a decent wedge of it to help them get through the pandemic.
US taxpayers received a cheque for up to $1,200 each as a cheque in the post – as unemployment benefits were boosted up to around $900 a week.
Yep, that’s right… the mean ol’ right-wing USA under Donald Trump is handing out more money to taxpayers and the unemployed than we are.
South Korea, Taiwan, Serbia and China are among other countries who gave or are giving money away to their citizens as the simplest way to boost their economy – and cheer everyone up in the process.
There’s a lot of talk about the impact of the pandemic on our mental health, but what could a be better way to ease our worries than a cheque for the equivalent of €2,100 in the post – as Japan plans to hand out to households.
Even the sensible British and Germans got something.
Britons were able to get 50% off their meals out – with no fuss or delay and literally at the table where they ate – plus a whopping VAT cut from 23% to just 5% for the hospitality sector.
Germany also slashed the VAT rate for its far less significant hospitality sector to just 3%.
What do we get?
A VAT cut to 9% in the last budget – that merely reversed a previous increase the ink was barely dry on – and the stingy ‘stay and spend’ scheme.
This tax break is worth up to €125 per year but only if we log receipts, using qualifying restaurants or vacations in Ireland at a time when we’re not supposed to even leave our own county or were in complete lockdown.
Independent TD Denis Naughten has blasted it as ‘pointless’ as the whole country was either in lockdown or confined to their county since it came in.
‘The €140m that has been set aside (for this year)... is not going to be drawn down,” he told the Dáil. In fact, Finance Minister Paschal Donohoe admitted in response, that only €440,000 had been claimed at that stage.
Mr Naughten called instead for the unused money to be used to back vouchers for hotels and restaurants that currently being heavily promoted by a State agency, Fáilte Ireland.
I heard its commercial on the radio on the morning that I wrote this article. It goes: ‘Give them an Irish accommodation gift voucher because we can all do with a break in 2021.’
But these gifts may prove worthless if businesses in the beleaguered sector go bust, Mr Naughten warned (see panel).
We asked Fáilte Ireland whether there was any State guarantee attached to the vouchers it was urging people to buy in hotels and restaurants.
‘There’s is no current Government scheme to honour vouchers for tourism and hospitality businesses should they fail,’ a spokeswoman admitted.
Experts Taxback.com has not only called out the Government over the miserly stay and spend scheme (see panel) but also on the equally stingy Covid-19 tax measures.
‘As valuable as the Temporary Wage Subsidy (TWSS) was, it was essentially a support for employers,’ said Marion Ryan, consumer manager.
‘Employees in receipt of this payment would have received the same (if not less) income during that period, so it does seem incongruent with the spirit of the scheme that they should face tax liabilities as a result.’
‘Similarly, workers who lost their jobs as a result of the pandemic and received the Covid19 Pandemic Unemployment Payment could also face tax liabilities in the future.’
The raw deal for consumers in the pandemic doesn’t stop there.
The Government is not only standing idly by but is actively complicit as consumer rights are being compromised in the pandemic.
Many organisations, including many State agencies, are getting away with using Covid 19 as an excuse for basically abandoning any pretence at customer service.
‘The consumer has also suffered quite significantly in the pandemic, particularly in the case of airlines and travel,’ said Dermott Jewell of the Consumers Association of Ireland.
Airlines – with Aer Lingus being a chief culprit – blatantly flew near-empty planes into Covid 19 hotspots so they could avoid reimbursing passengers who didn’t want to fly there.
The Government not only did nothing about this practice, it even sent a letter to Brussels asking for a special derogation for travel firms to give vouchers instead of refunds.
‘A lot of people are still waiting for refunds (from airlines and travel companies). Or have been given vouchers that they may not be able to use,’ said Mr Jewell.
He agreed that consumers are getting the thin end of the wedge whenever goodies are given out – or taken back in extra taxes.
‘We are consistently told we are doing well as consumers but you have to take that with a pinch of salt,’ said Mr Jewell.
Asked whether the Government was being Scrooge-like in how it is treating us, he replied: ‘Given the time of year, yes, people will liken it to Charles Dickens’ most miserable friend.’
There’s only one thing to say to that: Bah Humbug!