NAMA is the National Asset Management Agency. It has been set up by the Government to manage the bad debts of Irish banks. It will work as follows:

NAMA will buy bad loans from the Irish banks.

It will pay for these loans with Government Bonds, not cash. The banks will hold these bonds for a fixed period of time. During that time, the Government will pay interest on the bonds to the banks, and at the end of the life of the bonds, the Government will pay back the capital amount of the bonds to the banks.

The amount of Government bonds issued will be decided by a panel of international experts who have previous experience in dealing with the bad debts of banks.

The banks will take these bonds and place them with the European Central Bank. In return, the ECB will give the Irish banks cash. This cash will be used to recapitalise the banks so that they can start lending to business and consumers again.

In the meantime, NAMA will start to manage the loans it has bought from the banks. This will involve pursuing the people who took out the loads to ensure that they are repaid. In some case, this will involve acquiring the assets (land) against which the loans are secured, and re-using or selling this land in order to realise its value. This process will occur over a 10-15 year period. Any value realised will be used to pay interest on the bonds, and invested, so that NAMA has sufficient funds to pay back the capital amounts of the bonds.

At the end of NAMA’s existence, if it transpires that NAMA hasn’t realised enough value from the loans to fully pay back the banks, a levy on bank profits will be introduced to make up the difference.

No Comments »

When it was originally announced, one of the more difficult aspects of the Pension Levy was that it applied to all income of all workers who were members of Public Sector Pensions Scheme.

This affected a lot of part-time workers, who were either in a scheme or who were entitled to a retirement gratuity, like retained (part-time) Firefighters. All such workers were required to pay a levy of 3% regardless of how much they were earning.

This was addressed in the Supplementary Budget in April, when the Minister changed the arrangements in relation to the Pension Levy such that the first €15,000 of income was exempted entirely from the Levy.

This was a welcome change, but it appears to have been overlooked somewhat by the media, to the extent that a lot of part-time workers are not aware of it.

I thought I’d do my bit to redress this by publishing the change here.

No Comments »

I am reluctant to make grand promises about being able to create jobs in County Leitrim in the short term. Councillors do have a role in economic planning, but their statutory ability to steer the County Manager in a particular direction is often limited.

That said, the Council does have one specific power which has a direct impact on sustaining and creating local jobs: the power to set commercial rates.

As with every other County Council, Leitrim County Council will struggle to balance its books this year. Its funding from the Local Government Fund has been reduced and it is generating lower revenues from both commercial rates and motor taxation.

However, this does not prevent the Council from taking a pro-active approach to the issue of rates. By recouping expenses from other areas, the Council could introduce a rates holiday for new businesses, which would remove a significant burden from local entrepreneurs while they find their feet in these very difficult times.

For instance, if Councillors were willing to forego the Cathoirleach’s Allowance, which costs the Council several hundred thousand euro over the term of the Council, the money could easily be diverted to a rates holiday for new businesses.

All of this will come up for discussion when the Council meets towards the end of the year to frame its budget for 2010.

If we are to sustain jobs in County Leitrim, we need to start being creative with the powers we have. Some sacrifice on the part of Councillors, and a rates holiday for new businesses, would be a step in the right direction.

No Comments »

There has been a lot of confusion about the changes that were made to Mortgage Interest Relief in the April Budget.

Hopefully, this post will clarify what is going on.

Firstly, it is important to note that both first time buyers and persons on their second or subsequent mortgage will continue to benefit from this relief.

Any person who has taken out a mortgage in the last 7 years, either to buy their first home, to move to a new home, or to undertake repairs to, extensions to or refurbishment of their home, will continue to be entitled to relief.

If, however, you changed your mortgage for some other reason, for example, to switch lender to benefit from a better rate, and 7 years has elapsed since you bought your first home, moved home, or upgraded/refurbished your home, you will no longer be entitled to relief, despite the fact that your current mortgage may still be less than 7 years old.

In addition, there will be a temporary moratorium on relief during the months of May and June to allow the Revenue Commissioners communicate with lending institutions to ensure that they have all necessary information in relation to individual mortgage accounts.

This moratorium will not apply to First Time Buyers or mortgage holders for whom the Revenue Commissioners have all relevant information. Any mortgage holder who is entitled to relief, but who is affected by the Moratorium, will be entitled to a full refund of the relief in July.

You can confirm this on the website of the Revenue Commissioners. Click here to access the relevant page.

No Comments »

I found that this little device helped me to reduce my electricity bills.

The premise is quite simple. If you know which devices cost the most to use, you subconsciously use them less.

Simple.

Click here to buy one of these Smart Meters

No Comments »

The Green Party in Co. Leitrim has fired the first shot in its Local Election campaign by announcing that any Green candidates elected to Leitrim County Council will enter into a voluntary cap on expenses.

This cap will be set at €3,000 per annum, which in addition to a Councillors salary of €17,000, means that Green Party councillors will receive no more than €20,000 per annum from Leitrim County Council. The national average for Councillors is €33,347.

In addition, Green Party councillors will not undertake any foreign travel, and all expense claims made by Green Party councillors in Co. Leitrim will be published on the group’s website at the same time as they are made.

Annoucing the move, Green Party candidate in Manorhamilton, Gerry Farry, said:

“An investigation by the Irish Independent this year revealed some of ludicrous charges that Councillors across the country were making on the public purse. For instance, one Councillor charged the full cost of his Masters Degree to his Local Authority, while another charged for trips to places like Buenos Aires and Hong Kong”.

“At a time when the taxpayers funds are becoming ever more scarce, this is totally unacceptable.”

The party’s candidate in Dromahair, Johnny Gogan, said that if elected, Green Party candidates would use their expense allowance wisely.

“As chairman of Leitrim’s Mobile Cinema company until last year I was able to oversee an expansion and re-branding of the company’s services while the Council was cutting its grant to the facility by fifty per cent. We intend to be just as creative with Council resources when in office”

“It doesn’t make sense for every councillor to attend every event on every subject. We will evaluate the various seminars and conferences that come up, and if we feel that Leitrim has something to gain from our attendance, one of us we will go along.”

“We certainly don’t see any point in leaving the country to attend events. There is enough for Councillors to be doing at local level without having to be jetting around the globe.”

Carrick on Shannon candidate, Garreth McDaid, said that Councillors should set an example when it comes to the public purse.

“Extreme pressure will be put on the Local Government Fund over the coming years, and we want Councillors to do their part to ensure that services are protected to the greatest extent possible.”

“The Council’s budget should be used to maintain roads, provide recreation facilities for young people and protect our environment; it should not be used to pay Councillors to attend conferences at luxury hotels.”

ENDS

No Comments »