Budget 2023 – A Taxing Problem?

By Marc Westlake

Published on: October 6, 2022

Financial Updates

You know when you go to the doctor and they take some blood tests and it comes back with a high cholesterol reading and they say “we are going to prescribe Lipitor, but I’d also like you to see our dietician who will suggest some lifestyle changes that will be beneficial”.

I recently had my own bloods retested and my cholesterol is now back down to a nice level. Changes in diet and exercise have prevented me from having to continue to take medication to treat the symptoms of poor diet.

There is a concept in medicine known as “prevention rather than cure”. In other words, we are far better off exercising good hygiene and sanitation to prevent cholera than we are to try and treat people with cholera.

Many of the measures announced in the Budget seek to treat the symptoms of a Global energy crisis rather than attempt to address the causes. I accept that everyone is going to have to face much higher energy bills this winter, but my question is this: is it better to throw money at people to pay the bills and continue to burn fossil fuels at the same rate or would we collectively improve our situation if we spent the money on trying to deal with the problem – our over dependence on fossil fuels in the first place?

There is a precedent here in Ireland

The Ardnacrusha hydro-electric power plant on the River Shannon was completed in 1922. It is estimated that the cost to build was equivalent to one fifth of the Irish state’s annual budget at the time. Large infrastructure projects like Dams clearly have an impact on the surrounding environment and a difficult line must be walked between the impact on the local ecosystems and the benefits of renewable energy. The Core values and Strategic Priorities put forward by the World Commission on Dams (WCD) have achieved generalised acceptance by all stakeholders as pillars of a decision-making framework that ensures sustainable outcomes.

Iceland aspires to be carbon neutral by 2040

Iceland is a world leader in renewable energy. 100% of Iceland’s electricity is produced from renewable resources. Of total energy consumption, 85% of the total primary energy used in Iceland is derived from domestically produced renewable energy sources. Geothermal energy providing around 65% of primary energy and hydropower around 20%.

Ireland might not have the advantage of a plentiful supply of geothermal heating, but it could increase electricity production from wind turbines. One of the criticisms of sources of renewable energy like wind power is that it doesn’t always blow when the power is required. Again, a little joined up thinking goes a long way. My Nissan Leaf is a 100% electric car and often sits on the drive with its battery not connected to anything. The grid simply needs to send out a signal when its windy overnight to ask my car to start charging and efficiently store off-peak electricity rather than have me plugged in drawing peak electricity generated from gas turbines.

Now I accept that one car charging on renewable energy isn’t going to solve the problem overnight but in the past we didn’t reuse carrier bags or recycle our plastics.

The accumulation of relatively modest efficiency gains would have a big impact on the overall dependency of the State on fossil fuels and help to address the causes of the current energy crisis rather than its symptoms.

We have a range of Paris Aligned investments available to our clients, which are tax efficient in an Irish context and will ensure that your savings go towards helping solve the problem Read More Here

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