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Explainer: How will motorists be affected by today's Budget announcements?

A major overhaul of the VRT system was announced in today’s Budget.

MOTORISTS ARE GETTING to grips this evening with a range of green-tinged measures announced by the government today as part of Budget 2021.

But what exactly has been announced and what will the impact be on your wallet?

The first (and most simple-to-grasp) change announced was an increase in the carbon tax.

From tonight, the tax on petrol and diesel will increase to €7.50, from €26 to €33.50 per tonne of CO2.

Estimates suggest this will add about 2.5c per litre of petrol or diesel. 

New legislation will also be introduced in the Finance Bill to increase the tax each year by €7.50 up to 2029 and by €6.50 in 2030 – to bring it up to €100 per tonne of CO2

This is ahead of the €80 per tonne of carbon target set out in the 2019 national Climate Action Plan.

The latest hike will apply to other fuels, like home heating oil, from 1 May 2021.

Speaking on RTÉ News after the announcement, Conor Faughnan, director of consumer affairs at AA Ireland, said, “We’re very disappointed with the fuel price increase.

“It’s not much… but it’s just a kick at the motorists and all it does is raise tax revenue. And it treats people — particularly in rural areas — as if they’re the source of the problem.”

Motor tax

Alongside the carbon tax increase, a couple of important reforms to the existing motor and Vehicle Registration Tax systems were also announced today.

For context, it’s important to understand that from January 2021, a new emissions testing system — dubbed the Worldwide Harmonised Light Vehicle Test Procedure (WLTP) — will be implemented across the State.

Leaving that aside for a second, Ireland currently has two separate motor tax categories.

About 500,000 cars in the State that were registered before 2008 are taxed based on engine size while nearly 1.6 million cars registered after 2008 are taxed based on their CO2 emissions.

That’s not going to change after today’s Budget announcement.

In fact, the government announced no changes to motor tax for pre-2008 cars.

Only the most polluting cars in the post-2008 regime will be taxed more than they were after today’s Budget.

This means that motorists with cars registered after 2008 that have a CO2 emissions rating of higher than 141g per kilometre will be taxed €400 instead of €390.

Meanwhile, a third motor tax category was introduced in today’s Budget to take the new WLTP into account.

From 1 January, new cars will be taxed in accordance with their emissions ratings under this new system.

This new motor tax category is designed to encourage people to buy cleaner, more efficient cars, meaning, for example, that vehicles with an emissions rating of 0g per kilometre will be taxed €120 per annum.

At the opposite end of the spectrum, drivers of gas-guzzlers with an emissions rating of between 201 and 225 grams per kilometre will be charged €1,200.

A new €140 rate applies to vehicles with emissions of 1g per kilometre to 50g per kilometre under the WLTP.

New rate bands

Changes were also announced today to the Vehicle Registration Tax (VRT) system, including the creation of nine new rate bands.

This will mean that cleaner vehicles like plug-in hybrids and electric cars that emit up to 50g of per kilometre will be charged at 7% VRT.

Cars with a 191g per kilometre emissions rating face the hardest VRT hit with 37% VRT.

Car dealers have reacted angrily to the changes.

The Society of the Irish Motor Industry has claimed that the changes will add €1,000 on average to the price of a new car.

Meanwhile, the Irish Car Carbon Reduction Alliance (ICCRA), which represents the majority of new car dealers said the hikes were “disproportionate”.

“Penalising motorists for driving conventional cars is not going to lead to an increase in electric vehicles,” said ICCRA spokesperson Denis Murphy.

“Rather than incentivising the wide-scale adaption of newer, more carbon-efficient cars, people are going to hold onto their current car for longer, resulting in hundreds of thousands of older less carbon-efficient models remaining on Irish roads for years to come.”

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    Mute Seriousnojoke
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    Jul 26th 2020, 1:12 PM

    Took a bus to town yesterday. Everyone was wearing masks. Very proud of Ireland.

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    Mute Billy McNamara
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    Jul 26th 2020, 6:28 PM

    @Seriousnojoke: Went into Dunnes today.NONE of the staff wearing masks.Security guard on front door without mask. What about that??

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    Mute Seriousnojoke
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    Jul 27th 2020, 12:45 AM

    @Billy McNamara: There is room for improvement indeed.

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    Mute Thornto84
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    Jul 26th 2020, 1:44 PM

    Just to add a bit of perspective to the article, it fails to mention that 9,928,960 people have recovered , there is only 5,649,118 currently infected, and of that 5,582,829 are in mild condition and 66,226 in serious or critical condition. Source: _https://www.worldometers.info/coronavirus/
    (FYI can’t post links here but just Google the above link to confirm)

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    Mute Dannys Dentures
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    Jul 26th 2020, 2:03 PM

    @Thornto84: 10 people currently in hospital here in Ireland

    11
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    Mute Macca Attack
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    Jul 26th 2020, 2:06 PM

    @Thornto84: it also states that 15% got very sick needing hospital care. That’s about 3million people. Most of them will need medical care for rest of their lives because of damage done to organs by the virus

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    Mute WCS
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    Jul 26th 2020, 2:15 PM

    @Macca Attack: I’m probably generally on your side of the divide in this argument (against people who downplay the virus), but genuine question, are there stats to support that the majority of those who need hospitalisation never make a full recovery ?

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    Mute Thornto84
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    Jul 26th 2020, 2:15 PM

    @Macca Attack: care to provide a source for this information or did you just read it somewhere ? Define very sick was it a couple of days, a week, a month in hospital ? I’ve provided a source you haven’t.

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    Mute Thornto84
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    Jul 26th 2020, 2:25 PM

    @WCS: it’s nothing about down playing the virus it’s about adding perspective to the constant fear mongering reporting being put out there, and letting people come to their own conclusion not just base everything on fear, it’s doing more harm than this virus will ever do

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    Mute Thornto84
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    Jul 26th 2020, 2:43 PM

    @Dannys Dentures: yeah a whole 10 people but hospitals and health service still not up and running 100%

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    Mute Macca Attack
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    Jul 26th 2020, 2:58 PM

    @Thornto84: it’s on worldometers if you cared to read it

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    Mute Thornto84
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    Jul 26th 2020, 3:22 PM

    @Macca Attack: sorry but don’t see it anywhere, care to send the link ?

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    Mute Isabel Oliveira
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    Jul 26th 2020, 4:33 PM

    @WCS: there isn’t any clear evidence either way yet .

    They don’t know if it’s post viral fatigue or if the sequels will resolve or not as not enough time has passed , if the sequels are from the disease or PTSD . As several health ministers in Europe have stated these reports must be taken with due caution as the data is not robust nor enough research has been made . So the general advice is to wait until data is certain and researched properly. I think that’s wise advice .

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    Mute Deirdre O'Byrne
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    Jul 26th 2020, 4:48 PM

    @Thornto84: and in other news, over 7 billion people – yes 7 billion – didn’t die in road accidents today. And of those injured, many recovered yadda yadda yadda.

    So why are these news sources only reporting road accidents – especially those causing death?! Is it something to make us fear driving?!

    Or is it, perhaps, that they are giving us information we need to stay safe.

    Where is this sense of “constant fear mongering” coming from?! Why doesn’t it apply to “fear mongering” around road accidents? Cancer? Suicide?

    And how, pray, tell, should the media report on something dangerous without being accused of “fear mongering”?!?!??? Should all reports start with “7 billion people didn’t die from this today”?

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    Mute Thornto84
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    Jul 26th 2020, 6:55 PM

    @Deirdre O’Byrne: another one that missed the point, the story reports approx 16m cases when that’s not the case so why report it, why not report that there approx 5m ACTIVE CASES ? Why insinuated there’s 16m cases ? But you seem to be happy with media outlets reporting half the story, good for you and last time I check we weren’t being bombarded about car accident pandemic, were we ? People like you can’t take small bit of good news or perspective for what it is.

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    Mute Deirdre O'Byrne
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    Jul 26th 2020, 7:58 PM

    @Thornto84: actually 16m cases is probably an underestimate.

    You seem to be saying that car accident injuries shouldn’t be reported – only *active* injuries should be reported, because when the media reports the total injuries they are “reporting half the story”?! That makes *no sense*! Seriously!!!

    And maybe, just maybe, the reason why we aren’t being told about a car accident pandemic is because it doesn’t fit the definition of a pandemic?!

    And where is the good news about approx 5m active cases? You complain about fear mongering, yet such reporting is considered “good news”?!?!??

    Finally to perspective. So what you are saying is that every report about car accidents should contain the disclaimer “but *your* chances of dying in a car accident is X”? Is that something that is actually needed? Are people incapable of figuring out the correct perspective for themselves?!

    Are you?

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    Mute Thornto84
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    Jul 26th 2020, 8:48 PM

    @Deirdre O’Byrne: what the does car accidents have do with it thought it just an analogy you were using but you’re still going with it bit weird really. Yes there is more than likely more case but at this very moment in time there is approx 5m ACTIVE case not 16m that’s the total since day one. Which head line would be more accurate
    and sound better; “Number of coronavirus cases worldwide hits 16 million” or “Number of active coronavirus cases world wide hits 5,687,966 with 5,621,808 in mild condition” pick one but I think I know which one you’ll pick, you seem like a glass half empty sort of person. FYI the the good news is the fact around 99% of the active cases are only mild or would prefer all of them were serious to say I told you so !?!

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    Mute Tom Ripley
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    Jul 26th 2020, 8:52 PM

    @Thornto84: I know someone who got it was close to death. Pulled through with colostomy bag forever more as reminder.

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    Mute Thornto84
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    Jul 26th 2020, 8:57 PM

    @Deirdre O’Byrne: sorry to answer your last question someone clearly has to give people like you perspective because you just missed the whole part that approx 99% of the active cases are mild condition instead you just focus on active cases, maybe you just see what you want to see

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    Mute Thornto84
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    Jul 26th 2020, 9:02 PM

    @Tom Ripley: I’m very sorry to hear that and feel bad but that person, but unfortunately it doesn’t change the numbers posted above. The comment is in relation to the wording of the headline nothing to do with the seriousness of the virus, not exactly right that it insiuates 16m cases when there’s only 5m active cases

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    Mute Deirdre O'Byrne
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    Jul 26th 2020, 9:58 PM

    @Thornto84: actually it is you who is coming across as trying to put your head in the sand by cherry-picking what should get reported. There are NO OTHER dangers or disasters where the number of people currently being affected is the metric reported. Yet you want this metric used for this event. Every other disaster it is the total number of people affected that is reported. Whether that be road accidents, earthquakes, or pandemics.

    I fail to understand why you are incapable of maintaining perspective when “more than 16 million people affected” is the figure. There are over 7 billion people on the planet, and whereas this is a new disease which, if let out of control could have a devastatingly historic impact on humanity, the fact is that we know how to protect ourselves, and we are doing so. And the total number of people who are going to die is probably (hopefully) going to be less than the 1.35 million or so people killed in road accidents worldwide every year.

    So why are you having such difficulty maintaining perspective?! I just don’t understand it!!! “16 million people affected”, in the context of a population of over 7 billion, is (so far and hopefully will remain so) nothing to get totally worked up over. So what is the problem?!??

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    Mute Deirdre O'Byrne
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    Jul 26th 2020, 10:01 PM

    @Thornto84: actually the figure for mild cases is 80%. But – so what? 99.999% of car journeys are safe, yet you don’t see that figure being reported either, in spite of the fact that car journeys are probably going to kill more people than coronavirus this year. Why is it that when 99.999% of car journeys being safe isn’t reported that you find yourself “losing perspective”?!

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    Mute Thornto84
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    Jul 26th 2020, 10:34 PM

    @Deirdre O’Byrne: few questions since you just dont get it. Is what I said right or wrong ? Did I present false facts ? Is there currently 16m infected with covid 19 walking the planet right now, based on known figures ? Has nobody reovered from this virus ? Care to offer a source for the 80% ? Do you not think it is right for people know how many have recoved from this virus ?

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    Mute Thornto84
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    Jul 26th 2020, 10:43 PM

    @Deirdre O’Byrne: for my own curiosity do you mind offering me a source or proof how pandemics are reported ? Also you be throwing around a lot of assumptions there, care to share where they came from it just your own opinion?

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    Mute Deirdre O'Byrne
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    Jul 27th 2020, 12:34 AM

    @Thornto84: whether what you said was true or false is beside the point. The point you were making is one of lost perspective because coronavirus is reported *exactly the same way* as *every other disaster*. The reports talk of 16m cases, but you say can’t maintain perspective unless those reports (uniquely) also give smaller figures like number currently infected. Why do you need coronavirus reports to give those smaller numbers in order to maintain perspective, yet you have no problem maintaining perspective when road deaths, earthquakes etc are reported in the usual way? May we please concentrate on that particular point of yours, as I cannot understand it, and I’m curious.

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    Mute cheapdeals.ie
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    Jul 27th 2020, 1:54 AM

    @Macca Attack: They say paper never refuses ink but this takes the biscuit. The overwhelming majority of people who need observation in hospital have recovered and do not having long lasting effects. Like any other respiratory virus, a small minority will need time to get back to normal and good health and an even smaller minority may have long term respiratory damage as they would with any other serious virus or infection of the lungs. Just be honest professor Macca, you just made that up to appease your own hysteria.

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    Mute Thornto84
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    Jul 27th 2020, 7:19 AM

    @Deirdre O’Byrne: So you didn’t answer one of my questions and but cares about facts, only person here that’s looking to twist figures to suit what you want is you, where’s your proof about that’s how they’re reported, and 80% figure you threw around? But you know what the big difference about the way you say it should be reported is that car accidents and I can only assume you mean deaths from an earthquake is that that an accident or a death can’t be undone where as a person catches this virus they can recover, hence we have figures for recovery and unfortunately deaths figures, where as accidents happened and can’t be undone.

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    Mute Thornto84
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    Jul 27th 2020, 7:21 AM

    @Deirdre O’Byrne: For you to say that this disaster should be measured as the same as any other disaster is complete bull as people can recover from and hence change that figure. At the end of this is when that figure is most relevant when it will be said X people were infected with this. Also they used to report the recovery figures but you must of given then advice on that said it’s wrong. I’m sure you’re a very smart person but you’re coming across a very bitter person suggesting that we should never know what the recovery figures and nobody should mention it. Maybe offer some proof in you’re argument too when someone asks, you couldn’t even answer 1 of my questions. I suggest you move on now you’re not making any sense

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    Mute Deirdre O'Byrne
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    Jul 27th 2020, 7:30 AM

    @Thornto84: I’ve answered all your *relevant* questions – the only questions I haven’t answered are those which are attempting to deflect attention from the “issue” you raised. And would you like to say how I’ve “twisted” figures (if it’s relevant)? And as for car accidents and earthquakes – most people who die in those disasters *die from their injuries* – injuries which in many cases can be survivable if they happen to be treated quickly enough etc. People can recover from car accidents and from buildings falling on them just as they can recover from a virus. Good grief you are really grasping at straws!

    Now would you care to expand on your point by, once and for all, and without deflection, and without risible analogies about people recovering, explain why the way disasters are normally reported doesn’t lead you to lose perspective but the same reporting on covid does. Do you accept that the reporting on disasters doesn’t usually come with caveats about “your chances of dying from this are X” or “most people will recover” or “the number of people currently affected is X” etc? So why is it that, when covid reporting follows the well-established pattern, you lose perspective?!

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    Mute Thornto84
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    Jul 27th 2020, 9:26 AM

    @Deirdre O’Byrne: Listen you’ve clearly lost the run of yourself and I dont even think you know what you’re talking about at this stage, let alone anyone else, rambling about car accidents and earthquakes and comparing it to catching and recovering from a virus. You haven’t provided me any proof or sources that I asked for to back up your statements and opinions, that’s just what they are opinions and statements nothing else. Now I’m done embarrassing you so I’m going to move on now, you bore me now.

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    Mute Deirdre O'Byrne
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    Jul 27th 2020, 5:20 PM

    @Thornto84: listen you’ve clearly lost the run of yourself and I don’t think you *ever* knew what you were talking about. You haven’t answered simple questions about how you came to your conclusions, instead deflecting with irrelevant nonsense and then trying to call me out when I don’t take the bait. It is irrelevant whether the serious injury rate is 99% or 80% when the “problem” is that the injury rate isn’t part of the usual reporting on the issue thereby contributing to “loss of perspective”. Now I’m done embarrassing you so yes, I think it’s time to move on.

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    Mute Raymond Dennehy
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    Jul 26th 2020, 2:50 PM

    China’s gift to the world. Boycott Chinese goods only weapon we have to fight their tyranny. It worked against apartheid South Africa.

    29
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    Mute Deirdre O'Byrne
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    Jul 26th 2020, 5:11 PM

    @Raymond Dennehy: of course the so-called “Spanish” flu of 100+ years ago originated in the U.S. What measures should people have taken against the U.S. for *that* monstrosity – which killed far more than covid 19 will. Or is it just Asians who should suffer when a virus arises there?

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    Mute jzT
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    Jul 26th 2020, 1:04 PM

    Vietnam are doing the right thing

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    Mute dublindamo
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    Jul 26th 2020, 2:24 PM

    So do all the people who still think it’s a hoax reckon the North Korean leader is now part of the big conspiracy?

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    Mute PV Nevin
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    Jul 26th 2020, 2:49 PM

    The salient issue is that the virus can be ‘crushed’ as sone scientists have put it.
    But the resources are not put into doing that
    Ireland Heading for Second Covid-19 Wave
    https://www.wsws.org/en/articles/2020/07/21/irel-j21.html
    https://www.wsws.org/en/articles/2020/07/25/pers-j25.html

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    Mute James St John Smith
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    Jul 26th 2020, 5:01 PM

    @PV Nevin: Work Socialist Website lol

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    Mute Caoimhín O'Cheallacháin
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    Jul 26th 2020, 7:08 PM

    I am sick and tired. Yes number of cases is 16million. But can you put it in context. How many people recovered? What is the actual percentage have died? Where have most people been infected? Shed some light please… I know this is a tough time but please enough of the gloomy headlines

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    Mute Thornto84
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    Jul 26th 2020, 9:47 PM

    @Caoimhín O’Cheallacháin: I went through those figures above and basically got attacked for it, people don’t like actual facts and perspective these days the scarier the headline the better it seems

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    Mute Deirdre O'Byrne
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    Jul 27th 2020, 1:19 AM

    @Caoimhín O’Cheallacháin: this pandemic is a very complicated issue, and so there are many “contexts” involved. The big big context, however, is that if this pandemic were let loose, it would have massive and long-lasting negative effects on humanity. So if you find the headlines gloomy, take true solace in the fact that the pandemic isn’t (quite) loose, though there are a few places in the world which are of concern. But as things stand, as I said above in a different thread, it looks like (fingers crossed!) this damn virus will claim fewer lives than a typical year of road accidents.

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