The international money markets simply do not believe things are improving. Whatever the Taoiseach says about the economy growing, buyers of bonds today looked for a yield of 6.15% on Irish bonds – 3.71% higher than the yield on German bonds. We are paying more than twice as much as Germany to borrow money, hardly a sign of confidence in Government assertions that it is just a matter of volatility in the market and that it has clear strategies and has everything under control. Ireland’s economic policy now is Micawberism, stumbling along from day to day in the hope that something will turn up.
The controversy surrounding the Taoiseach’s rambling interview in Galway probably provided a welcome diversion from the need to respond to probing questions about economic indicators. How could he seriously maintain things were getting better when the people who deal in the big money are saying, ‘We do not believe you’.
However, if all politics is personal, there are signs as worrying as a 6.15% interest rate. The Revenue Commissioners wrote advising that they owed us €47.16 due to an overpayment. This seemed odd, because only four weeks ago they had paid a refund on the assessment for 2009; had there been a miscalculation?
Reading through the calculation sheet attached to the letter, the overpayment related to the tax year 2005, something that would have been settled four years ago. What had prompted them to start going back through previous years of income tax assessments? Was it the change of address that prompted a new official to look through the old files? Or are clergy liable to be treated with suspicion, prompting a second look at the numbers? Or is it something else? Is it that the revenue officials have been told to examine closely every return in the hope of increasing tax revenues?
Perhaps it is reasonable to double check every return to ensure every liability has been met in full; perhaps a simple clerical check offers the potential of millions of additional revenue for a cash-strapped government. Imagine they went through a million tax returns and found that there had been significant errors. Imagine these errors were so substantial that they averaged €1,000 each across a million tax payers. A million additional payments at an average of €1,000 each is a lot of money; it is €1 billion. One could do a lot with a billion – or not as the case may be.
€1 billion is less than 5% of what has been wasted in the disastrous effort to save the wretched Anglo Irish Bank. €1 billion is a mere trifle in the context of what has been lost. If tax officials are really scratching around to find a few quid here and a few quid there, then we really are in trouble. It would be much more comforting to think of being under individual suspicion than to think that we are that broke.