# Dermot Desmond jeered in Dublin airport?



## Shawady (25 Jun 2009)

Just heard a discussion on the radio this morning about a growing resentment in Ireland towards 'rich' people.
The interviewer mentioned that Dermot Desmond and his family were jeered by some people in Dublin aiport recently. 
Does anyone know if this true? I didn't see anything in the papers or on the news about it.


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## Caveat (25 Jun 2009)

If it is true, is it not more likely to have been due to his association with banking rather than simply 'being rich' ?


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## callybags (25 Jun 2009)

If it is true then it is a disgrace and a very poor reflection on us.


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## Howitzer (25 Jun 2009)

Celtic supporters maybe?


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## TarfHead (25 Jun 2009)

He wasn't born to money

Begrudgers


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## Caveat (25 Jun 2009)

I'm sure it's been said on this site before, but this reminds me of something Bono said about American vs Irish attitudes to success.

Something along the lines of:

American guy: See that rich guy with the big house on the hill? One day, that's gonna be me.

Irish guy: See that rich guy with the big house on the hill? One day, I'm gonna get him.


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## Shawady (25 Jun 2009)

Caveat said:


> I'm sure it's been said on this site before, but this reminds me of something Bono said about American vs Irish attitudes to success.
> 
> Something along the lines of:
> 
> ...


 
I only heard the end of the piece on the radio, but apparently Larry Mullin gave an interview in one of the Sunday papers about how he has noticed this recent attitude toward wealthy people. From what I could make out he wasn't too bothered about himself but he mentioned this thing about Dermot Desmond being jeered and thought it was disgraceful given the money he has been responsible for brining into the country.


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## DublinTexas (25 Jun 2009)

Well with the upcoming Redistribution of wealth that is needed to deal with our economy continuing to be in depression, the massive amount of unemployed, the massive amount of civil servants and the continuing effort to bail out builder and bankers I don’t think we are going to see very much jeering of rich people soon for a simple reason: There are no more “rich” people in Ireland left.


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## Staples (25 Jun 2009)

Caveat said:


> American guy: See that rich guy with the big house on the hill? One day, that's gonna be me.
> 
> Irish guy: See that rich guy with the big house on the hill? One day, I'm gonna get him.


 
Are you sure it's not "one day i'm gonna _tax_ him".


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## Kine (25 Jun 2009)

what did they say in today's papers, 4000 people fell off the millionaire list?


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## gianni (25 Jun 2009)

DublinTexas said:


> ... the massive amount of civil servants ...


 

38,000 civil servants (approx) for a population of 4,000,000 (approx). 
Doesn't seem all that massive.


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## liaconn (25 Jun 2009)

We've actually got quite a small Civil Service compared to other countries, although I agree that resources are not always allocated in the most efficient way possible.

Maybe DublinTexas meant Public Servants?


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## ashambles (25 Jun 2009)

> We've actually got quite a small Civil Service compared to other countries


I've heard that many times. But I'm little wary of it as I don't think I've seen numbers to back it up. Some facts become "true" because they're repeated a lot. 

Our civil service is most like the British model, who make do with slightly less. 488,000 for a population of 60m. And that's a country that maintains a relatively large foreign office and defense department. [broken link removed]

Comparing the civil service with other EU or OECD countries is monstrously difficult as the breakdown of public servant vs civil servant translates differently everywhere. A direct comparison might even be impossible. (Which for public servants throughout Europe is the ideal conclusion.)

As for Dermot Desmond I find it hard to believe he'd be widely recognized enough to be booed.

Around this time of year Dublin airport is often quite rowdy with drinkers waiting for delayed flights but maybe it was one slightly better informed person starting off a bunch of idiots who'd no idea who they were booing.


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## DavyJones (25 Jun 2009)

callybags said:


> If it is true then it is a disgrace and a very poor reflection on us.




Who is this "us" you refer to?


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## liaconn (25 Jun 2009)

ashambles said:


> I've heard that many times. But I'm little wary of it as I don't think I've seen numbers to back it up. Some facts become "true" because they're repeated a lot


 

Actually, its in the recent OECD report, published after extensive research by experts in the field.


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## Complainer (25 Jun 2009)

Shawady said:


> The interviewer mentioned that Dermot Desmond and his family were jeered by some people in Dublin aiport recently.


Maybe they were crew or management from Irish Helicopters with long memories - http://www.village.ie/Politics/Tribunals/Desmond:_Ireland%92s_fifth_richest_billionaire/1/


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## gianni (26 Jun 2009)

ashambles said:


> I've heard that many times. But I'm little wary of it as I don't think I've seen numbers to back it up. Some facts become "true" because they're repeated a lot.


 


_The OECD’s Report Towards an Integrated Public Service, is extensive, running to nearly 375 pages. Among the key findings and recommendations set out in the Report are: _

_General government employment in Ireland is relatively low among OECD countries. It is significantly less that the level of public employment in Norway, Sweden, France, Finland and Belgium. _
_Ireland has the third smallest total public expenditure as a percentage of GDP, (third to Korea and Mexico), and this figure has decreased over the past ten years. _
_If the Public Service is to become more responsive to meeting citizens expectations and achieving broader societal objectives, the OECD recommends thinking about the Public Service as a more integrated 'system'. _
_The full potential of ICT and e-government is not being realised by public sector organisations for citizens. _
_Performance measures and initiatives need to be better aligned with the overarching outcomes and high-level societal goals, in order for the general public to understand the benefits of the Public Service._


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## Jim Davis (26 Jun 2009)

Shawady said:


> I only heard the end of the piece on the radio, but apparently Larry Mullin gave an interview in one of the Sunday papers about how he has noticed this recent attitude toward wealthy people. From what I could make out he wasn't too bothered about himself but he mentioned this thing about Dermot Desmond being jeered and thought it was disgraceful given the money he has been responsible for brining into the country.


 
Dermot Desmond and Larry Mullen got alot of money out of Ireland.


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## TarfHead (26 Jun 2009)

Jim Davis said:


> Dermot Desmond and Larry Mullen got alot of money out of Ireland.


 
Dermot Desmond and Larry Mullen *earned* a lot of money in Ireland. Good on them - I wish I had done the same.


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## Kine (26 Jun 2009)

If I earned as much money as those guys did I would try and use it in the most tax efficient way too. If that involved an offshore aholding company (legal of course...)I would do it. 

the flip side is, should we tell Microsoft to stop pumping the billions through it's Irish operation because of our low corporation taxes?


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## Purple (26 Jun 2009)

gianni said:


> _The OECD’s Report Towards an Integrated Public Service, is extensive, running to nearly 375 pages. Among the key findings and recommendations set out in the Report are: _
> 
> _General government employment in Ireland is relatively low among OECD countries. It is significantly less that the level of public employment in Norway, Sweden, France, Finland and Belgium. _
> _Ireland has the third smallest total public expenditure as a percentage of GDP, (third to Korea and Mexico), and this figure has decreased over the past ten years. _
> ...



When you consider that, in practical terms, we have no armed forces worth talking about then the numbers, and more importantly the amount we spend, are quite large. I have no problem with that; the real issue is value for money.


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## lemeister (26 Jun 2009)

I wouldn't have thought Dermot Desmond would have gone through the main part of Dublin airport given that he has a private jet parked there.  I thought there would be a separate area to check in for owners of private jets, but maybe not.


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## DublinTexas (26 Jun 2009)

liaconn said:


> Maybe DublinTexas meant Public Servants?


 
Yes sorry I mean all of the people employed by the state, their bodies and companies whatever they are called.


			
				OECD report said:
			
		

> General government employment in Ireland is relatively low among OECD countries. It is significantly less that the level of public employment in Norway, Sweden, France, Finland and Belgium.


In the Nordic countries they might have higher taxes and more public service but there people get something for their taxes. Working public transport, hospitals where a person is seen swiftly and a public service where they are friendly to tax payers.


Kine said:


> The flip side is, should we tell Microsoft to stop pumping the billions through it's Irish operation because of our low corporation taxes?


 
And that would result in them closing shop with about 3000 people directly out of job. And in any case, once the great leader Barrack Hussein Obama gets his will Microsoft will have to pay taxes in the US even on foreign revenue, so there will be no reason for multinationals to be in Ireland anyhow.



lemeister said:


> I wouldn't have thought Dermot Desmond would have gone through the main part of Dublin airport given that he has a private jet parked there. I thought there would be a separate area to check in for owners of private jets, but maybe not.


 
There is a VIP suite that anybody can buy access to for as little as € 161, see [broken link removed].


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## gillarosa (26 Jun 2009)

lemeister said:


> I wouldn't have thought Dermot Desmond would have gone through the main part of Dublin airport given that he has a private jet parked there. I thought there would be a separate area to check in for owners of private jets, but maybe not.


 
Yeah, I was wondering if it was maybe Dennis Desmond if the source was a Rocker they run in the same circles.


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## Shawady (26 Jun 2009)

Got the Larry Mullin interview on line.
Here is the quote.

"_He gets slightly annoyed when he recounts one specific example of the new antipathy towards the rich, which was seeing Dermot Desmond and his family being jeered at, late at night coming through Dublin airport. _
_He seems particularly baffled as to why property developers "are becoming the butt end of it all. People saying, 'Well, it serves them right -- they had it good'. What they don't understand is that during the good time they were providing thousands upon thousands of jobs. I don't want to go back to the Eighties. I grew up in the Eighties and it was miserable_." 


http://www.independent.ie/entertainment/music/u2-access-all-areas-1782416.html


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## ashambles (26 Jun 2009)

I didn't see anywhere in it that we've lower civil service numbers. The closest does seem to be General government employment but that's more than civil service...



> _General government employment in Ireland is relatively low among OECD countries. It is significantly less that the level of public employment in Norway, Sweden, France, Finland and Belgium. _


So we come in lower than the Nordic countries, France, Belgium and Slovakia. 

That's great but the other 8 countries listed make do with less. It seems an incorrect conclusion from that data we've relatively low numbers employed, when we're in the top half of the table (7th of 15).  Very small sample to use for a potentially highly expensive conclusion anyway.

Some of the idea that our public sector is small comes about as we've an odd way of paying teacher and hospital salaries so they don't always show up on figures for Irish government employees. In the chart mentioned they're tacked on to the Irish "bar" without moving Ireland to it's correct position in the chart.

The section of the report has the look of something that was re-written, having originally assumed that Ireland were actually in position 10 of 15 - where Ireland remains incorrectly in the chart. 



> _Ireland has the third smallest total public expenditure as a percentage of GDP, (third to Korea and Mexico), and this figure has decreased over the past ten years. _


The GDP comparison figures would be fine, if our GDP wasn't inflated by a temporary construction boom and the often mentioned fact that our GDP is unusually higher than our GNP. The OECD themselves know this so I'm a little suprised for an Irish targetted report they used GDP figures so much. 

http://www.oecdobserver.org/news/fullstory.php/aid/1507/GDP_and_GNI.html


> "Ireland is another country where GDP has to be read with care...while Ireland produces a lot of income per inhabitant, GNI shows that less of it stays in the country than GDP might suggest"


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## liaconn (26 Jun 2009)

Pity the OECD didn't consult you. You obviously know a lot more than they do and could have pointed out loads of things that they didn't understand and take into account.


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## csirl (26 Jun 2009)

What's Dermot Desmond in Dublin Airport got to do with public sevice numbers across Europe? Am I missing something?


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## room305 (26 Jun 2009)

liaconn said:


> Pity the OECD didn't consult you. You obviously know a lot more than they do and could have pointed out loads of things that they didn't understand and take into account.



Wasn't there some controversy about this report after it emerged that several senior civil servants were on a panel that vetoed large sections of the report prior to publication? Sorry I can't find the link.

Anyway, in relation to the GDP/GNP thing - from the ever excellent Finfacts.



> If however the level of public expenditure in Ireland is expressed as a percentage of GNI (40.5%), it becomes much closer to OECD average levels expressed as a percentage of GDP (42.7%).




http://www.finfacts.com/irishfinancenews/article_101348.shtml

So with no standing army to speak of, US/UK style public service provision (I'm being generous), we manage to spend as much as the French and the Scandinavians.

I'd hate to see the report before it was edited!


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## gianni (26 Jun 2009)

csirl said:


> What's Dermot Desmond in Dublin Airport got to do with public sevice numbers across Europe? Am I missing something?




Nope... just another public sector bashing thread...


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## Complainer (27 Jun 2009)

room305 said:


> Anyway, in relation to the GDP/GNP thing - from the ever excellent Finfacts.
> 
> http://www.finfacts.com/irishfinancenews/article_101348.shtml
> 
> If however the level of public expenditure in Ireland is expressed as a percentage of GNI (40.5%), it becomes much closer to OECD average levels expressed as a percentage of GDP (42.7%).


I must try that angle the next time I'm stopped for speeding, i.e. "Well Garda, if you convert my speed to miles-per-hour and compare it to everyone else's kilometres-per-hour, you will see that I wasn't speeding at all - OK, Garda?".


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## room305 (27 Jun 2009)

Complainer said:


> I must try that angle the next time I'm stopped for speeding, i.e. "Well Garda, if you convert my speed to miles-per-hour and compare it to everyone else's kilometres-per-hour, you will see that I wasn't speeding at all - OK, Garda?".



Your car speeding analogy is a little silly since the conversion rate between kilometres and miles remains the same regardless of which car you are driving. 

The same is not true of GDP and GNP. The statement in the Finfacts article holds true if we compare our GNP with the GNP of other countries. To put it in the terms of your analogy, the km/h clock is overstating your speed by 20% but the mph speed is accurate so you're asking the Guard to compare you're mph speed with the mph speed of the other drivers.

GDP in Ireland is overstated due to the presence of transfer pricing by large multinational corporations (i.e. large amounts of money nominally enters the country and then promptly leaves again for accounting purposes). It has no real effect on people living here, apart from the additional taxes collected and the skewed statistics. This phenomenon does not exist in other countries - their GDP roughly equals their GNP. The report - since it was focused on comparing Ireland to the rest of the world, should have used GNP measures for all countries.

Denis O'Hearn from Queen's University Belfast in 2002



> A gap opened up between GDP and GNP. Ireland is unique in Europe in the degree that its gross _domestic_ product exceeds its gross _national_ product because of the profits that are removed by TNCs. In 1983, foreign profit repatriations made up just 3 per cent of GDP. By 1995, they were nearly 19 per cent of GDP. In 1999, they had risen to an astounding 40 per cent of GDP (48 per cent of incomes from royalties and licenses are included)! The proportion of TNC profits in GDP began to rise by an astonishing extent after 1997. In 1998, growth of foreign profits was equivalent to eighty per cent of economic growth! During the years 1997-99, the rise of TNC profits was equivalent to two-thirds of economic growth. As a result, the gap between GDP and GNP widened. In 1980, southern Irish GNP and GDP were practically equal. In 1990, gross domestic product was 11 per cent higher than gross national product. Today GDP exceeds GNP by about 20 per cent. In simple language, GDP overstates by a fifth how much material wealth was created _for the Irish people_ by their own economic activities.



http://library.fes.de/fulltext/id/01135c01.htm#E9E6

As long as transfer pricing and a GDP/GNP gap exists in Ireland, I will continue to argue that GNP is a more accurate measure even if it serves to invalidate a point I wish to make. 

Would you do the same for GDP?


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## liaconn (27 Jun 2009)

room305 said:


> Wasn't there some controversy about this report after it emerged that several senior civil servants were on a panel that vetoed large sections of the report prior to publication? Sorry I can't find the link.
> 
> 
> I'd hate to see the report before it was edited!


 

I never heard of any controversy and can't find anything about it on the net. Are you sure its the same report?


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## room305 (27 Jun 2009)

liaconn said:


> I never heard of any controversy and can't find anything about it on the net. Are you sure its the same report?



You're right I should think - I can't find anything on it either. I might be thinking of an earlier report. This one isn't exactly complementary about the state of the public service.


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## Purple (27 Jun 2009)

Excellent posts from Ashambles and Room305.


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## Complainer (28 Jun 2009)

room305 said:


> The same is not true of GDP and GNP. The statement in the Finfacts article holds true if we compare our GNP with the GNP of other countries. To put it in the terms of your analogy, the km/h clock is overstating your speed by 20% but the mph speed is accurate so you're asking the Guard to compare you're mph speed with the mph speed of the other drivers.
> 
> GDP in Ireland is overstated due to the presence of transfer pricing by large multinational corporations (i.e. large amounts of money nominally enters the country and then promptly leaves again for accounting purposes). It has no real effect on people living here, apart from the additional taxes collected and the skewed statistics. This phenomenon does not exist in other countries - their GDP roughly equals their GNP. The report - since it was focused on comparing Ireland to the rest of the world, should have used GNP measures for all countries.
> 
> ...


OK, thanks for clarifying. I just wanted to be absolutely certain that you weren't selectively choosing statistics to suit your arguement, and comparing them against other non-comparable statistics. No-one would try that - right?


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## room305 (28 Jun 2009)

Complainer said:


> OK, thanks for clarifying. I just wanted to be absolutely certain that you weren't selectively choosing statistics to suit your arguement, and comparing them against other non-comparable statistics. No-one would try that - right?



I'm sure plenty of people would try on either side of this particular argument but the GDP distortion due to transfer pricing in Ireland is a well known phenomenon and while possibly ignored when convenient, I've never heard of it being denied. At a macro scale it makes us look wealthier and more efficient than we really are.


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## DublinTexas (28 Jun 2009)

Complainer said:


> OK, thanks for clarifying. I just wanted to be absolutely certain that you weren't selectively choosing statistics to suit your arguement, and comparing them against other non-comparable statistics. No-one would try that - right?


 
Zanu FF does on a regular basis, that is if one of their leaders actualy can read more than the highlighted part of a report.


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## liaconn (28 Jun 2009)

room305 said:


> You're right I should think - I can't find anything on it either. I might be thinking of an earlier report. This one isn't exactly complementary about the state of the public service.


 
No one said it was. But you accused the report of being tampered with by Senior Civil Servants before being published and implied there was all sorts of other facts which hadn't come to light.


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## room305 (28 Jun 2009)

liaconn said:


> No one said it was. But you accused the report of being tampered with by Senior Civil Servants before being published and implied there was all sorts of other facts which hadn't come to light.



Actually, perhaps I was right initially and the controversy did relate to this report.



> THE contrasting realities of the lives of public servants and private sector workers has been highlighted again by the news that top civil servants “toned down” an OECD report, commissioned by the Government, into the performance of our public sector.
> 
> Amazingly, the senior civil servants vetted the report into how they do their business before it was published.
> 
> If this does not represent a self-serving abuse of power, position and authority, it is difficult to imagine what might.


[broken link removed]


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## bogle (28 Jun 2009)

Purple said:


> Excellent posts from Ashambles and Room305.


 
Many moons later and Purple is still at it - having a good dig at the civil service no matter what the thread. For a guy who runs his own successful exporting business you sure seem to be able to spend a lot of time posting in AAM!!!


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## room305 (29 Jun 2009)

bogle said:


> Many moons later and Purple is still at it - having a good dig at the civil service no matter what the thread.



Can't speak for Purple of course but speaking personally I actually think the Civil Service is relatively well run (emphasis on relatively). There is much room for improvement of course and more labour flexibility is a necessity but by and large it's not a major drain on the exchequer.

The public sector on the other hand ...


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## Purple (29 Jun 2009)

room305 said:


> Can't speak for Purple of course but speaking personally I actually think the Civil Service is relatively well run (emphasis on relatively). There is much room for improvement of course and more labour flexibility is a necessity but by and large it's not a major drain on the exchequer.
> 
> The public sector on the other hand ...



I agree. I would add that people work within the organisational they find. Just because the structure is bad/outmoded/inefficient it doesn’t mean that the people in it are lazy or are not conscientious. In any large organisation there will be inefficiencies. State bodies do not have to respond to market forces to the same extent as commercial organisations and are subject to political interference so change is slower. That said there have been major changes all over the public and civil service over the last few years, most of them for the good. Let’s hope it continues and accelerates.


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## Staples (29 Jun 2009)

In an attempt to draw together the separate strands that have emerged within this thread, maybe the people booing Dermot Desmond in Dublin airport were doing in protest at the effect his tax avoidence strategies were having on the disparities between the rates of GDP and GNP?

Or maybe they were just in bad form (they were at the airport, after all) and would have booed Santa himself.


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## DublinTexas (29 Jun 2009)

Staples said:


> In an attempt to draw together the separate strands that have emerged within this thread, maybe the people booing Dermot Desmond in Dublin airport were doing in protest at the effect his tax avoidence strategies were having on the disparities between the rates of GDP and GNP?
> 
> Or maybe they were just in bad form (they were at the airport, after all) and would have booed Santa himself.


 
Nice try Staples to bring this together but giving that loads of people pay for overprized tickets to see other tax avoidance kings (previously known as U2) I don't think that logic works.


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## liaconn (29 Jun 2009)

room305 said:


> Actually, perhaps I was right initially and the controversy did relate to this report.
> 
> [broken link removed]


 
Its a bit vague, and doesn't seem to have been picked up generally by the media at the time. I suspect the Examiner are blowing something out of proportion here.


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## room305 (29 Jun 2009)

liaconn said:


> Its a bit vague, and doesn't seem to have been picked up generally by the media at the time. I suspect the Examiner are blowing something out of proportion here.



http://www.independent.ie/national-news/secret-plan-to-cut-8000-public-jobs-was-buried-1469794.html


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## liaconn (30 Jun 2009)

room305 said:


> http://www.independent.ie/national-news/secret-plan-to-cut-8000-public-jobs-was-buried-1469794.html


 

But the Senior Civil Servants didn't axe anything from the report. The OECD simply didn't include something offered unsolicited by a group of civil servants who had contacted them by phone but who were not part of the review group. The vetting of the report, which is quite normal to ensure accuracy, just asked for changes in language to ensure things couldn't be misconstrued. Anytime I've taken part in a review I would be asked to read over the bit pertaining to my area in order to ensure things were stated accurately and nothing had been misunderstood.


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## WarrenBuffet (13 Jul 2009)

Ah the champions of the private sector! 

Where never a lazy, incompetent idiot did work. Nope - all sharp, efficient entrepreneurs put upon by the greedy, fat slobs of the public service....... I have worked in the private and public sector - where i worked (which was on the trading floor of an investment bank!) there was a similar level of wasters doing as little as possible for as much as they could get. 

All this praise of the private sector and vilification of the public sector!!!! It 90% of the way to discrimination - do you honestly think the public sector is even half full of lazy, incompetent, unmotivated idiots? Honestly? Because if you do have a look in a mirror, maybe give a wink and say hello to a proper one.  

By far and away the biggest and most trumpeted facets of our private sector over the last ten years has been shown to be a shambles - namely banking and building. So give up public sector bashing for a minute and perhaps concentrate on what we as a country are going to do with the ever growing amounts of unemployed architects, electricians, plumbers, solicitors, engineers, accountants and on and on and on............ Christ would you prefer if EVERYONE was unemployed.......

Finally to all the private sector champions - if you work so hard where on earth do you get the time to post on this website so regularly? I work in the public sector and never have the time............


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## liaconn (14 Jul 2009)

Well said.


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## Purple (14 Jul 2009)

WarrenBuffet said:


> Ah the champions of the private sector!
> 
> Where never a lazy, incompetent idiot did work. Nope - all sharp, efficient entrepreneurs put upon by the greedy, fat slobs of the public service....... I have worked in the private and public sector - where i worked (which was on the trading floor of an investment bank!) there was a similar level of wasters doing as little as possible for as much as they could get.
> 
> ...



I can’t argue with what you are saying but you are leaving out the bit about the shrinkage of the building and banking sectors as a result of their malpractice. The cold reality is that the public sector is paid for by tax receipts and wealth generated by the private sector (yes, I know it’s more complex than that and there is a significant interdependence but in macro terms it’s true). Fairness doesn’t come into it; we cannot afford the cost of our public sector. Therefore we need to reduce the cost to a level we can afford. That’s all there is to it. Pay cuts are the best option from a national perspective and to be honest if 80% of the country took a 10% cut then prices for many good and services would also drop significantly, maybe not be 10% but close to it.

Monitory basics 101: increasing the amount of money in a country doesn’t make it richer, it just reduces the real value of that money. The inverse is also true.


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## liaconn (14 Jul 2009)

Purple said:


> Pay cuts are the best option from a national perspective and to be honest if 80% of the country took a 10% cut then prices for many good and services would also drop significantly, maybe not be 10% but close to it.


 
Most Civil Servants have taken a pay cut of  between 7 and 10%. However, according to the Sunday Tribune only about 10% of employees have taken a pay cut while about 29% have taken reduced pay for reduced hours. Therefore, there must be large numbers of Private Sector workers who, apart from the income levy, have not been forced to take a cut.


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## Purple (14 Jul 2009)

liaconn said:


> Most Civil Servants have taken a pay cut of  between 7 and 10%. However, according to the Sunday Tribune only about 10% of employees have taken a pay cut while about 29% have taken reduced pay for reduced hours. Therefore, there must be large numbers of Private Sector workers who, apart from the income levy, have not been forced to take a cut.


Companies who cannot afford their wage bill reduce staff numbers (about half the companies in Ireland have done this over the last few months) and/or cut wages. The government, as an employer, needs to do the same. The pension levy is a pay cut in real terms but an actual pay cut would be better as that would reduce pension costs as well.

If costs are still too high then wages will have to be reduced further.


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## DublinTexas (14 Jul 2009)

I don’t think that we should compare pay cuts between public and private sector.

What we need is an honest assessment if we really need all of the people employed in the public sector.  That is not different than from what companies in the private sector are doing. They are evaluating if they have enough staff to do what they need to do and their either hire, restructure or let them go.

Exactly that is needed in our public service. People need to be put where they are needed (like dealing with 25% unemployed we are going to see sooner or later) and where they are not (like bin inspectors, several layers of useless management in the HSE).

Once the public sector than is doing what is their core responsibility than we can see how much money they need for it and accordingly set our tax bands.

I’m not anti-public service, I think that the government should concentrate on the core service, hire the best people for that job and pay them accordingly (and when I say pay I also mean take their benefits into consideration).

That way we have a public service that is needed, well paid and can do their job. That way we have a reduced tax burden which is good for everyone.

We are having a too large pool of public service and we need to cut that down. That is the same exercise we companies do in the private sector.


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## liaconn (14 Jul 2009)

Purple said:


> Companies who cannot afford their wage bill reduce staff numbers (about half the companies in Ireland have done this over the last few months) and/or cut wages. The government, as an employer, needs to do the same. The pension levy is a pay cut in real terms but an actual pay cut would be better as that would reduce pension costs as well.
> 
> If costs are still too high then wages will have to be reduced further.


 

I agree that numbers need to be cut in the Public Service and a start has been made with the early retirement and incentivised career breaks schemes.  However, while very senior Civil Servants are extremely well paid I really don't think the average civil servant can take much more in the way of cuts any more than any other worker who has already seen their salary drop significantly. A lot of people I work with are really finding it a struggle to pay their bills, many have partners in the private sector who have lost their jobs or have had to take reduced hours, loads of us are in negative equity. Its not as simple as saying 'oh, just make all public servants take another 10% cut'.  Going down that road could end up seriously deflating the economy.


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## Kine (14 Jul 2009)

WarrenBuffet said:


> Finally to all the private sector champions - if you work so hard where on earth do you get the time to post on this website so regularly? I work in the public sector and never have the time............


 
you're obviously making up for all the slacking your colleagues are doing


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## room305 (14 Jul 2009)

liaconn said:


> Going down that road could end up seriously deflating the economy.



I think that's exactly what we should be trying to do.


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## bogle (14 Jul 2009)

WarrenBuffet said:


> Finally to all the private sector champions - if you work so hard where on earth do you get the time to post on this website so regularly? I work in the public sector and never have the time............



Dude this is something that has struck me too. Some of the most frequent daily posters in this forum claim to be business owners! I really wonder how they ever find time to run their businesses? Somewhat suspect me thinks!


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## room305 (15 Jul 2009)

bogle said:


> Dude this is something that has struck me too. Some of the most frequent daily posters in this forum claim to be business owners! I really wonder how they ever find time to run their businesses? Somewhat suspect me thinks!



Not really. Back when I worked for myself from home I posted here far more than I do now that I work in the public sector. It doesn't mean I was less productive then than I am now. For one thing, I worked longer hours back then.


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## liaconn (15 Jul 2009)

room305 said:


> I think that's exactly what we should be trying to do.


 

Why?


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## Purple (15 Jul 2009)

liaconn said:


> Why?



Maybe because we are/were/should be again an exporting economy and we have made ourselves very uncompetitive over the last 10 years by giving ourselves pay increases that we didn't earn (by earn I mean increase our productivity). The net result is that goods can be manufactured and services provided in other EU countries t a fraction of the cost here. I currently outsource to the UK at 35% of the unit cost I would pay here. 
Jack O'Connor was on the radio last night claiming that pay cuts are not the answer and would in fact damage the economy. He said that no economy was helped by reducing their costs. The guy from ISME was utterly useless and let him away with that rubbish. Anyone who knows anything about the German economy for the last 20 years could blow his argument out of the water. 

Listening to socialists talk about economics is like listening to fundamentalist creationists talk about evolution.


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## room305 (16 Jul 2009)

liaconn said:


> Why?



The arguments against creating a "deflationary spiral" pertain to larger economies where many of the goods consumed are manufactured internally rather than imported. In Ireland we manufacture goods for export and import most of our consumption.

So stimulus packages to boost consumption or government moves to prevent falling prices and wages only benefit France, Germany and the UK. Meanwhile, the reduced competitiveness damages our source of income - our exports.

The UK's competitiveness has been boosted by the devaluing of their currency. This option is not available to us, ergo we must cut wages, which in turn will reduce the cost of living. It amounts to one and the same thing once everybody suffers the same cut in wages. Of course, what unions want is for everybody but their members to reduce their wages (a wage rise in real terms).

Remember, when (I'm alright) Jack O'Connor is bleating about the harm of a "deflationary spiral" that he saw no harm in the inflationary wage/price spiral of the social partnership talks.

As Purple said, Germany has undergone a prolonged period of mild deflation and it didn't stop it becoming the world's largest exporter.


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## liaconn (16 Jul 2009)

Fair enough, and thanks for that. Just a genuine question , while I understand that the price of goods and services will come down in line with cheaper labour costs, most people's main outlay is their mortgage and those of us who bought in the last few years have a huge amount ot repay every month. How would this be handled? Like I said, its a genuine question, I don't have an economics background.


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## Purple (17 Jul 2009)

The cost of borrowing is one of the major factors that we cannot control. In many ways it’s all we have left from the boom. For the short term the problem is not a problem since international interest rates are so low but if, as is predicted, the rest of the EU comes out of recession before us the ECB will increase rates to stop inflation (with the big increases in money supply this will be a real problem). As rates increase we will be knocked back even more unless we get our act together fast and keep up with the rest of the euro zone.

Back on topic; low interest rates in the short term will compensate for lower incomes. In the long term we’re probably all screwed.


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## room305 (19 Jul 2009)

liaconn said:


> Fair enough, and thanks for that. Just a genuine question , while I understand that the price of goods and services will come down in line with cheaper labour costs, most people's main outlay is their mortgage and those of us who bought in the last few years have a huge amount ot repay every month. How would this be handled? Like I said, its a genuine question, I don't have an economics background.



Very little can be done in respect of mortgages (i.e. if interest rates start to increase) but unsustainably high wages won't help if it results in greater unemployment.

In the longer term, I think we need some sort of structure to aid people in negative equity who need to move for work or trade-up for family reasons, to carry their negative equity with them.


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## Shawady (20 Jul 2009)

room305 said:


> Very little can be done in respect of mortgages (i.e. if interest rates start to increase) but unsustainably high wages won't help if it results in greater unemployment.
> 
> In the longer term, I think we need some sort of structure to aid people in negative equity who need to move for work or trade-up for family reasons, to carry their negative equity with them.


 
Could the govenrment do something radical in this area like get the banks to write off a percentage (maybe 20%) of everyone's mortgage covered by the guarantee? It would free up more money for people to spend and may act as a stimulus to the economy.


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## lightswitch (20 Jul 2009)

"Maybe because we are/were/should be again an exporting economy and we have made ourselves very uncompetitive over the last 10 years by giving ourselves pay increases that we didn't earn (by earn I mean increase our productivity). "

Purple, you need to look at why there was a need for higher and higher wages.  It's not complicated at all, it came down to one simple thing, the cost of property.  

As a self employed person you may well have given yourself pay increases you didn't deserve.  Most of us who are in the PAYE sector did not have that luxury.  

You are correct with regard to us needing to be an exporting economy.  I posted a long time ago with regard to a concern I had about the amount of Chinese goods on sale here ( close to impossible to avoid buying Chinese items).  Where are the Irish manufacturers.  Why don't we have campaigns encouraging us to buy Irish or at the very least European.


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## Purple (20 Jul 2009)

You’ve got it the wrong way around; high property prices are a result of high wages and cheap credit. Increasing wages to follow costs is stupid since prices are set by market demand and increasing wages just pushed up prices again. Ask yourself this; if everyone in the country got a 100% pay increase would it mean that they were 100% better off in real terms or would prices just go up in line with the increased labour cost within the economy?
Money is a nebulous thing, even when it was minted precious metal increasing supply didn’t mean a country got richer. Real up on what happened to the Spanish after the conquistadors discovered thousands of tonnes of silver in South America. It caused the death of the most powerful empire in the Western world.


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## Purple (20 Jul 2009)

lightswitch said:


> Where are the Irish manufacturers.  Why don't we have campaigns encouraging us to buy Irish or at the very least European.


 We are more expensive than Germany and Switserland. Forget about China.


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## lightswitch (20 Jul 2009)

Numerous times over the past ten years I have seen employees move jobs or negotiate highter wages on the back of "I need to get on the property ladder", "I'm not earning enough here".  If the cost of property was not allowed to spiral out of control partly due to cheap credit but also due to the encouragement of a massive buying binge then we would be in a far better place today.

With regard to Germany and Switzerland, we are part of the EU, China is not.  I am not litterally faling over German and Swiss products in every shop in the country.

I will read up on what happened to the Spanish after the conquistadors discovered thousands of tonnes of silver in South America, sounds interesting.


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## Purple (20 Jul 2009)

lightswitch said:


> With regard to Germany and Switzerland, we are part of the EU, China is not.  I am not litterally faling over German and Swiss products in every shop in the country.


What is sold in shops only represents a small proportion of total economic activity. China is a low cost centre of choice at the moment but we are not trying to compete with them. We are trying to be a high-tech knowledge based manufacturing base. In that space it is our neighbours that we should be benchmarking ourselves against. Considering the inherent geographical and cultural disadvantages we have, (Germany is on the mainland, Ireland is not. Germany has a name for quality and excellence, Ireland does not.) as well as the economies of scale in production, materials and skills on mainland Europe we should be 10-15% cheaper.


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## room305 (20 Jul 2009)

Shawady said:


> Could the govenrment do something radical in this area like get the banks to write off a percentage (maybe 20%) of everyone's mortgage covered by the guarantee? It would free up more money for people to spend and may act as a stimulus to the economy.



Free up what money? Anything forgiven by the banks must be repaid by the taxpayer thanks to the guarantee. This would also unfairly punish those who were prudent and reward those who were most reckless.


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