Everyone on Board for the Great Hamster Wheel

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1Feel like your pay rise, if you get one, is barely covering the cost of living?  That the tax cut you’re going to get next year will only bring you back to where you were this year?  Feel like you’re running just to stand still (if you’re lucky)?  Welcome to the great Hamster Wheel where you can run and run and go absolutely nowhere.

Christmas is coming and Santa is bringing a big bag of price increases.

Health Insurance:  Now is a busy time for health insurance renewals and Charlie Weston reports a series of price increases.  Aviva is to increase prices by 5.1 percent in January.

‘The Aviva price adjustments come just months after similar hikes. At the start of the year, the insurer announced a rise of 3.5pc. And in the summer, it announced rises of 5.1pc, effective from the start of last July.’

Other insurers have also announced prices increases.

The health insurance market is getting more complicated.  72 Aviva health plans (yes, 72) will experience increases, many won’t while 47 plans will be withdrawn.  These will entail increases of €150 to €200 per year for many policy holders.  Weston quotes one independent broker as saying that most plans only have a life-span of 12 months.  Sign up if you will but realise that your plan may not exist after 12 months.

Hands up all those who would just rather pay for their health through social insurance – one plan to cover all contingencies – and share that cost with employers.

Public Transport Fares:  urban bus, Luas, rail and Bus Eireann fares are going up, though some travellers will experience a decrease with a number of zones being merged.  Some of the increases will reach 15 percent meaning an additional €70 per year.  But while there will be winners and losers in these price increases and changes, over the last four years public transport has experienced considerable inflation:

  • Rail fares:  17.3 percent
  • Bus fares:  21.4 percent
  • Overall inflation:  1.6 percent

That’s a substantial gap.

Private Rents:  Not only is there no end to rent increases, there actually accelerating.  Here’s what the Private Residential Tenancies Board reports over the last year (up to the second quarter) for a one-bedroom tenancy.

Hamster Wheel 1Minimal rises in Galway or Waterford.  But rents are rising in Cork and Limerick and in Dublin they are ballooning.  In money terms, monthly rents increased in Dublin by €81 while in Cork and Limerick they are rising by €26 and €19 respectively.

These numbers only go up to the second quarter this year.  DAFT reports that in the third quarter rents rose at the fastest since 2007 – by 3.2 percent.  Yearly increases in Cork, Limerick, Galway and Waterford – above 10 percent – are now exceeding Dublin.   Rents are not only rising, they are spreading.

* * *

Increases in health insurance, public transport fares and rents.  Average weekly earnings are also rising but they are concentrated among managers and professionals (as we will see in the next post).   And we get tax cuts.  But in the great hamster race everything cancels out everything else.

The next election will be dominated by tax cuts.  But who will raise the issue of living costs?  Does anyone have a coherent health policy – apart from piling in more money, which is necessary but not sufficient; not when we have a three-tier health services (those covered by insurance, those covered by medical cards and those who fall between the two)?  Is anyone going to propose increased public transport subventions which badly trail European norms?   And how are we going to fix our broken housing market – from the homeless and those on waiting lists, to those in a highly inflationary private rental sector and those still trapped in substantial arrears?

Or are we all going to follow the Fine Gael line:  here’s a tax cut, here’s some cash, now go away and don’t be bothering us.

Are we just going to grease the great hamster wheel?

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