Latest figures suggest that the Irish Government will collect roughly € 32bn in 2010 taxes – this money is roughly spent as follows:-
Public Sector Pay & Pensions - €20bn
Social Welfare – € 20bn
Healthcare – €15bn
Capital Projects – €5bn (lots of tendering being done, but not much work being released)
In summary, the Govt will collect circa € 32bn and will spend € 60bn, resulting in a current account deficit of circa € 28bn per annum, a situation which is not sustainable. This deficit excludes any monies spent in rehabilitating the banks, which Europe deems is not “investment” but rather “expenditure”. Ireland, particularly Finance Minister Brian Lenihan has been commended throughout Europe for taking positive action in tackling the deficit - all that has been done so far is to take circa €4bn out of the equation and much of this may end up being usurped in interest payments on the significant sums of money borrowed to rescue the banks. Everybody is looking at where money can be saved without trying to totally kill consumer demand, so what about tackling the elephant in the room – The Black Economy !
So who’s driving the Black Economy ?
a) The Solicitor who pays his receptionist cash in hand for the hours that she works instead of putting her through the books.
b) The Painter who will paint your house for cash VAT free, taking the work from the legitimate painter, who pays his taxes.
c) The Hairdresser who cuts your hair in the evening for cash.
d) The Restauraunter who pockets the cash tips instead of paying it as legitimate income to staff.
e) The Teacher who does grinds after schools hours (or during the long summer holidays), taking work from the non-permanent/ relief teachers who have no summer income.
f) The Builder who does your extension for cash cash, while his workers pay is being supplemented by Social Welfare.
g) The Houseowner who employes the Cleaner/ Ironing lady for cash.
h) The Smoker who buys his cigarettes from the Duty Free courier.
i) The Band who do the gig for cash.
How much is being lost to the Exchequer every year – €5bn, €6bn, €7bn or more ? – a significant sum is being lost to the real economy every year by the intransigence of people who accept the existence of the black economy – it’s not just the Government at fault here – we are all to blame !