Monday, October 15 08:09:58
Serious misgivings have emerged about the scale of savings being achieved under the Croke Park agreement in advance of the latest EU-IMF-ECB troika visit to assess progress under the bailout. It is understood that experts from the European Union, International Monetary Fund and European Central Bank are becoming increasingly frustrated with how the Coalition is implementing the bailout by cutting services to the public rather than tackling vested interests in the public service and professions.
While the troika is satisfied that overall targets for deficit reduction are being met, there is concern at the way they are being achieved, according to sources involved in the process. It is also understood that there is concern about the budget overruns in health. Signs of growing discontent have also emerged on the Fine Gael backbenches, with several TDs becoming increasing critical of the Government's approach to making savings in the public service pay bill.
Confirmation by chairman of the implementation body PJ Fitzpatrick to the Public Accounts Committee (PAC) that increments and allowances are not part of the Croke Park deal has aggravated Fine Gael TDs. The disclosure that departments are calculating savings made through early retirement by adding 80 per cent to salary savings on the basis of non-pay economies has also created problems. One department, Agriculture, did not claim savings in line with the norm applied by other departments on the basis that they were "excessive, relative to actual costs".
Minister for Agriculture Simon Coveney confirmed yesterday that his department did not claim these extra savings, saying it was "simply being accurate" by not adding massive non-pay savings. He said that while the standard calculation method for estimating savings for departing public servants involved adding a substantial non-pay element, that system had not been applied in Agriculture because those savings did not apply immediately. The Irish Times
Dublin based aircraft leasing company SMBC Aviation Capital is set to merge with two related companies located in Amsterdam in what will be one of the biggest corporate transactions involving an Irish corporate. This will add about $2 billion in aircraft assets to SMBC's portfolio in Dublin, bringing its assets managed here to $10 billion. The plan will be announced today alongside the official launch in Tokyo of SMBC, which has been rebranded after its acquisition earlier this year by Sumitomo Mitsui Banking Corporation of Japan for $7.3 billion from Royal Bank of Scotland.
The business was previously known as RBS Aviation Capital. Its launch in Dublin will take place on Wednesday. Subject to regulatory clearance, SMBC is set to merge with SMFL Aircraft Capital Corporation and Sumisho Aircraft Asset Management. Both companies are based in Amsterdam. All three entities have the same ultimate parent company although they have operated separately from each other until now. The merger will result in the number of owned and managed aircraft in SMBC's portfolio increasing from 240 to 331. The Irish Times
Just over half of water charges for business users in Ireland are collected, according to the Commission for Energy Regulation, which will be the State watchdog for water services. Denis Cagney, director of gas, legal and renewables at the regulatory authority, said the collection rate for non-domestic charges in Ireland is 53 per cent, compared with 78 per cent in the UK. The Irish rate is thus almost one-third lower (32 per cent) than the UK's.
Despite the poor enforcement rate, however, Mr Cagney told the Dublin Economics Workshop conference in Galway it was "very important to get the inevitability of paying for water bedded down". Highlighting the difference between Ireland and other European countries in the attitude to paying for water services, Mr Cagney said, historically, countries reconstructing after the second World War faced difficulties with scarce resources and the "culture of paying for vital resources became embedded".
Ireland is the only country out of 34 in the OECD where households do not pay directly for water services. Commercial operations are obliged to pay water charges. The commission will be the regulator for water services and Mr Cagney acknowledged there was "zilch" possibility of universal water metering being in place by the 2014 target date. Last week Bord Gais, which runs Irish Water, confirmed that just 15 per cent of homes would be metered by 2014 when, under Ireland's bailout agreement, it must introduce charges. The Irish Times
HM Revenue and Customs (HMRC) is investigating millions spent by former billionaire Sean Quinn Snr using his credit card, flying his company jet and helicopter, and other benefits-in-kind he may have received leading the Quinn Group. The probe by the UK taxman is looking at Quinn's spending over the five years 2005 to 2010 as it attempts to determine what personal perks the now bankrupt entrepreneur availed of and if tax was payable on them.
The Sunday Independent has previously revealed how Quinn paid for items from wedding cakes to premium sports TV subscription bills to the mortgage on his home by putting the bill through his company's books. James Morrissey, a former spokesperson for Mr Quinn, previously described such payments as "commonplace in business". The decision by HM Revenue to submit numerous questions to Mr Quinn's official assignee in bankruptcy, Chris Lehane, suggests it may not agree. It has already delivered a discovery assessment setting out its concerns to Mr Lehane who in turn has asked Mr Quinn for his response. The Irish Independent
Golden Discs once dominated music sales in Ireland with 35 stores in 2000, but online competition left the company facing closure in 2009. However, the chain survived in a slimmed-down version with 15 outlets. Managing director Stephen Fitzgerald puts that down to matching or beating online prices while launching an online download store with 10 million tracks. "As a music store, we faced the online challenge before anyone else," he said.
Online retailing has allowed Irish companies to tap into markets they could never have reached conventionally, said Alan Coleman of Wolfgang Digital, a marketing firm. For example, Celtic Wedding Rings now sells to America, while Sligo company Voya is selling seaweed cosmetics to Kazakhstan. Surprisingly, the internet may actually help local stores because Amazon in the UK has started making deliveries to corner stores for consumers who can't be at home to get them, and this may spread to Ireland, he said. The Irish Independent