Mis-selling and misunderstanding

By raising PRSI, this government has proved itself no better than mis-selling banks it slavishly serves.

Budget 2013: Michael “Tweedle Dumb” Noonan. (Not pictured: Brendan “Tweedle Dumber” Howlin.)

Why is the government attacking the banks for mis-selling Payment Protection Insurance, and then doing exactly the same itself?

With this hopelessly ineffective coalition hog-tied by an ideological insistence on not raising income tax or reducing base rates of social welfare, there was little enough room for cuts or revenue-raising.

So what do you do?

Cut everything that isn’t base-rate welfare, and raise everything that isn’t income tax.

But as ever, the government (and much of the electorate) has misunderstood the concept of social insurance, and the fact that for it to be justified, people have to get something in return.

Why, for instance, should self-employed people be forced to pay PRSI when the chances of them ever getting anything for it are about as much as the Green Party ever being seen again?

The banks are rightly being hammered (and wrongly, in some cases, being able to avoid responsibility) for selling insurance policies that would more or less never pay out.

Rather than adopting the principle of paying for something and actually getting something in return, the government seems to have copied this scam of selling a dodgy insurance policy for their own use.

It should come as no surprise, of course. They’ve already decided to ape the banks when it comes to their funding issues and the foisting of private debt upon the general public, so a little mis-selling of insurance shouldn’t bother us.

Commentators (particularly the myopic ‘spokespeople’ for small and medium enterprises and economic think-tanks) tell us that ‘we must incentivize people to work’ – but where is the incentive for the self-employed in paying huge sums and getting nothing in return?

Their other favourite word – ‘competitiveness’ – was nowhere in evidence as the government once again studiously avoided doing anything about the laughably expensive childcare costs in Ireland.

Competitiveness is not simply getting people to work as cheaply as possible – it’s creating a situation where they can work, because the social infrastructure around them allows them to do so.

Forget taxes, and the idea that a small rise would cause a modern-day equivalent of the Flight of the Earls – it is the astronomical childcare costs that mean Dublin families must cough up thousands of euro of taxed income just to be able to go to work – with the rest of the country not far behind.

As if that wasn’t enough, there was another dig at women with the introduction of taxation on maternity benefit, as a less-than-generous system is further watered down to appease those bankrolling the economy.

And just how bound are we by these ideological insistences?

Well, our friends at the Iona Institute – not exactly paragons of reason – saw plenty to kick up about in the reduction of child benefit, but had nothing to say about the reduction in maternity benefit.

Next time they tell you they supposedly have the interests of mothers at heart too, you’ll know it’s lip service.

In fact in Ireland, lip service is about all that most people now paying PRSI will find they are entitled to.

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