# We need to manage our national finances more prudently.



## Jazz1945 (26 Jun 2022)

Compliments, Brendan, on your article in today's Irish Sunday Times. It reflects what's increasingly on Irish peoples' minds (and don't forget to factor in the significant MICA compensation)and helps to bring home the abysmal, shortism of Irish politicians mindsets.


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## Brendan Burgess (27 Jun 2022)

Thanks Jazz

Here is the text, as submitted, I believe there was a run on the Sunday Times yesterday, and most shops had run out of copies early in the morning.



Source: https://assets.gov.ie/216795/ce94676e-81bd-42dd-ab8c-90103ba1318c.pdf



Most people act fairly responsibly when it comes to managing their personal and family finances. They think long-term. They live, more or less, within their means. During the good times, they build a up their savings in anticipation that there probably will be some bad times and some nasty financial shocks. They contribute to a pension fund. If they get a windfall or an inheritance, they don’t blow it all. Sure, they might buy a new car or take an expensive holiday, but they keep most of it, or use it to pay down their mortgage.

When they have children, they become even more responsible. They try to put money aside for their children’s education. They try to help their kids get on the housing ladder. And when they die, they would like to leave their kids an inheritance – maybe even the family home, mortgage-free.

While there are differences between managing the family finances and managing the public finances, we should apply the same general principles to both. The nation should live within its means most of the time. During the good times, we should be putting money aside so that we don’t have to cut back as much during the bad times. We need to think about our own future, our children’s future and our grandchildren’s future. When we get windfalls, we should not blow them on increasing public expenditure, but we should pay down our national debt or put them into a national pension reserve fund.

That is what good government should do. But Irish governments haven’t behaved responsibly for many decades as can be seen from the accompanying graph.

Government borrowings ballooned as a result of the financial crisis. We borrowed roughly €30 billion to bail out the depositors in our banks. We borrowed another €120 billon to maintain public expenditure during the economic crisis that followed.

But since then, the Irish economy has boomed. We have had record tax receipts boosted by artificially high tax payments by foreign multinationals. We had low unemployment, so our social welfare bill was reduced. And because interest rates dropped to near zero, the cost of servicing our national debt fell dramatically.

But instead of using these windfalls to reduce the huge debts we had built up during the bad times, we continued to spend, spend, spend. Then we hit another bad patch with Covid and had to borrow another €30 billion. And politicians keep coming up with very expensive grand plans such as Sláintecare and Housing for All, which would massively increase the cost of running the state, if they were ever implemented. Over the last five years, no western European government has increased expenditure by as much as the Irish government.

Make no mistake about it, this mismanagement of our public finances has made us very vulnerable. We are facing interest rate increases, general inflation and a probable recession. We could lose a substantial part of your Corporation Tax receipts from U.S. multinationals. We are also facing huge demographic challenges and climate change.

When any or all of these shocks hit us, the government may not be in a position to borrow any more because of the very large national debt we have already built up. The government will be forced into cutting expenditure at the very time when they should be increasing it to compensate for the fall-off in private consumption.

The people who will suffer most are those who are dependent on public services for a decent standard of living. The well-off will survive ok – their investments may fall in value and they may have to pay more taxes, but they won’t starve. But if the government is spending most of its tax income servicing the national debt, then the poor will face real austerity in terms of reduced health services, housing and social welfare payments.

At the National Economic Dialogue held in Dublin Castle this week, there were few calls for responsible financial management – all the calls were for increased expenditure or reduced taxes. Government ministers made some token comments about financial resilience, but the reality is that they will continue to spend, spend, spend. Those of us who call for reduced spending and increased taxation don’t get invited to these events.

The political system does not reward responsible long-term financial management. Instead, it rewards political parties promising high public expenditure and low taxation. Who would vote for a political party promising to cut expenditure and to raise taxes?

We need a structural solution to this political problem. We should give the Irish Fiscal Advisory Council, or some new statutory body, the power to manage the public finances for the long-term. Take it out of the hands of politicians. It would decide whether a surplus or deficit were appropriate, and the government of the day could make choices on spending and taxation within those limits. If the government wanted to increase public expenditure, then they would have to increase taxes. If they wanted to cut taxes, they would have to cut public expenditure. But they couldn’t cut taxes and increase public expenditure unless the IFAC decided that running a deficit was the correct strategy at that time.

There is a precedent for this. We only recovered from the last financial crisis because our lenders imposed the Troika on us and took the overall control of our finances out of the hands of politicians. They set the budget limits and the government made their spending and taxation choices within those limits. We should appoint our own Troika to impose these disciplines on us.

The EU’s Stability and Growth Pact does set a “fiscal space” for governments to operate within. But this has been completely ineffective. It has allowed the Irish government to blow the recent windfalls on public expenditure and it has not forced the government to make provision for the rough times ahead.

Parents try to leave their children and grandchildren a legacy. Our politicians are leaving our children and grandchildren a legacy ok, a legacy of unsustainable debt.



Brendan Burgess is the founder of the Consumer Forum askaboutmoney.com


Brendan


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## Brendan Burgess (27 Jun 2022)

The responses on the website, are very well expressed 

Edness
22 HOURS AGO

_Politicians are the worst for managing state finances - more like drunken sailors than fishermen. The immoral default is to borrow money, buy fish at the highest price, distribute fish willy nilly. The better approach to support and teach fishing. The author rightly points out gov spending and household spending is not the same. Gov borrowing is terrible when used for current spending, but if tax take and borrowed money is well-invested in correcttly controlled projects that generate long-term returns for the state, such borrowing is almost mandatory. We urgently need to put restrictions on the drunken sailors. Linking their pensions to the consequences is essential... and sobering. Skin in the game._

Ludraman mor
18 HOURS AGO

_Excellent article.  But what can we do when even the Party of Budgetary Restraint is behaving like a drunken sailor?_


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## Zenith63 (27 Jun 2022)

Brendan Burgess said:


> We should give the Irish Fiscal Advisory Council, or some new statutory body, the power to manage the public finances for the long-term. Take it out of the hands of politicians. It would decide whether a surplus or deficit were appropriate, and the government of the day could make choices on spending and taxation within those limits. If the government wanted to increase public expenditure, then they would have to increase taxes. If they wanted to cut taxes, they would have to cut public expenditure. But they couldn’t cut taxes and increase public expenditure unless the IFAC decided that running a deficit was the correct strategy at that time.
> 
> There is a precedent for this.


You have my vote.

Is there precedent for it in other countries outside of the emergency actions of the Troika?


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## Brendan Burgess (27 Jun 2022)

Hi Zenith 

The EU  has a Stability and Growth Programme which sets deficit limits.  But it doesn't seem to work very well. Remember all the talk of "Fiscal space" a few years ago? 

In the United States - the deficit is set at 3% (?) I think.  Congress(?) must agree to override it. That is why you have huge showdowns and a lot of public servants are temporarily laid off until they reach agreement. 

My proposal is that our own "troika" would actively manage the public finances counter-cyclically.  During the boom times, they would go for surpluses.  And when we need a big increase in public spending, they would allow it.

But the decisions would be based on long-term economic planning and not on the electoral cycle. 

Brendan


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## PGF2016 (27 Jun 2022)

Brendan Burgess said:


> My proposal is that our own "troika" would actively manage the public finances counter-cyclically.


Sadly, it is the politicians who would put this in place. No politician is going to enact measures to restrict their ability to buy votes. 

And I think you give the Irish public too much credit as regards their fiscal prudence.


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## Purple (27 Jun 2022)

Brendan Burgess said:


> Hi Zenith
> 
> The EU  has a Stability and Growth Programme which sets deficit limits.  But it doesn't seem to work very well. Remember all the talk of "Fiscal space" a few years ago?
> 
> ...


When an American hears about a project or plan to provide services the first question they ask is "How much is this going to cost me?". Irish people seem to think there is no link between the taxes they pay and the money the government spends. Maybe that's because of our very high Corporation Tax receipts.


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## Purple (27 Jun 2022)

PGF2016 said:


> Sadly, it is the politicians who would put this in place. No politician is going to enact measures to restrict their ability to buy votes.
> 
> And I think you give the Irish public too much credit as regards their fiscal prudence.


Politics is the art of bribing people with their own money.


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## Zenith63 (27 Jun 2022)

PGF2016 said:


> Sadly, it is the politicians who would put this in place. No politician is going to enact measures to restrict their ability to buy votes.


I wonder about that.  They would be able to blame IFAC for actions they needed to take that the public did not like.  If FF/FG are genuinely concerned about what a profligate SF will do to the Irish economy it would be a great way to reign that in.


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## NoRegretsCoyote (27 Jun 2022)

Brendan Burgess said:


> While there are differences between managing the family finances and managing the public finances, *we should apply the same general principles to both. *The nation should live within its means most of the time.



No it shouldn't. This is taking a tennis-club accounts approach to public finances, which are a different animal. States (unlike their citizens) are perpetual, and there will be someone around to tax in fifty or a hundred years time to pay the debt back. This means that states can and should borrow to invest in infrastructure that will be the foundation of a future tax base.




Brendan Burgess said:


> We need a structural solution to this political problem. We should give the Irish Fiscal Advisory Council, or some new statutory body, the power to manage the public finances for the long-term. *Take it out of the hands of politicians.*


No, no, and no. Pooling our resources via taxes is an exercise in collective action, and it needs clear lines of accountability to those who contribute and benefit. Handing this over to an unelected body takes the power to far away from the people. 

The IFAC does great work by the way in its analysis and policy advice, but the minute you give it power to make decisions it will lose its ability to give independent advice.


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## Paul O Mahoney (27 Jun 2022)

Purple said:


> When an American hears about a project or plan to provide services the first question they ask is "How much is this going to cost me?". Irish people seem to think there is no link between the taxes they pay and the money the government spends. Maybe that's because of our very high Corporation Tax receipts.


The perfect example of this in the US was/is universal health care. I have 2 relatives , not short a few bob and allegedly Christian,  far right in my view" and they were seething at Obama for even suggesting it.


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## Paul O Mahoney (27 Jun 2022)

Zenith63 said:


> I wonder about that.  They would be able to blame IFAC for actions they needed to take that the public did not like.  If FF/FG are genuinely concerned about what a profligate SF will do to the Irish economy it would be a great way to reign that in.


That opportunity sailed away 20 years ago and nothing they could do now will change voters minds.
Everyone wants everything now.

Mc Creevy, "I have it so I'm going to spend it" ruined the country as most now think they always have it.


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## Purple (27 Jun 2022)

Paul O Mahoney said:


> That opportunity sailed away 20 years ago and nothing they could do now will change voters minds.
> Everyone wants everything now.
> Mc Creevy, "I have it so I'm going to spend it" ruined the country as most now think they always have it.


It wasn't just him though, Garett the Good managed to ramp up the fiscal ineptitude of the previous FF government. It was only in the late 80's that any measure of fiscal responsibility was evident in an Irish Government and that was fleeting.


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## Purple (27 Jun 2022)

NoRegretsCoyote said:


> No it shouldn't. This is taking a tennis-club accounts approach to public finances, which are a different animal. States (unlike their citizens) are perpetual, and there will be someone around to tax in fifty or a hundred years time to pay the debt back. This means that states can and should borrow to invest in infrastructure that will be the foundation of a future tax base.


That would be true if that was what we are doing but we are borrowing to fund current expenditure. That's the problem. It's like benchmarking all over again when we committed to long term current expenditure based on short term tax revenues. We have had consistently pro-cyclical economic policies for the last 30 years and the strong probability is that the opposition will be even more reckless when they are in power after the next election.



NoRegretsCoyote said:


> No, no, and no. Pooling our resources via taxes is an exercise in collective action, and it needs clear lines of accountability to those who contribute and benefit. Handing this over to an unelected body takes the power to far away from the people.


Such a body would be accountable to the Government, the Dail and the Public Accounts Committee. 



NoRegretsCoyote said:


> The IFAC does great work by the way in its analysis and policy advice, but the minute you give it power to make decisions it will lose its ability to give independent advice.


I do agree that it shouldn't be the IFAC  as they do a good job in their current role and so shouldn't have a conflicting brief.


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## NoRegretsCoyote (27 Jun 2022)

Purple said:


> That would be true if that was what we are doing but we are borrowing to fund current expenditure.


You are wrong. Have a look at Table A6 here.

Net borrowing of public sector (ie the government deficit) in 2021 was 3.6% of GNI*, 0.8% of GNI* in 2022.

Investment (gross fixed capital formation plus capital transfers) was 4.6% of GNI* (2021) and 5.4% of GNI* (2022).

Deficits are below what is being used for public investment.


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## Paul O Mahoney (27 Jun 2022)

Purple said:


> It wasn't just him though, Garett the Good managed to ramp up the fiscal ineptitude of the previous FF government. It was only in the late 80's that any measure of fiscal responsibility was evident in an Irish Government and that was fleeting.


In fairness from 88 to 2002 were extremely good years ,ok devaluation of the punt is hard to understand what benefits or costs it caused, but by 2002 ish the national debt was circa €40/45bn , surpluses were common, SSIA was introduced,  Wally idea, funds were coming in from EU and were spent well,  motorways etc. 

By 2002 one would have thought that "maybe we have a future " then we all know what happened and the Government of the day " didn't know why" and we have literally sinking slowly since,  not just economically but all other aspects of our country.

But, and this my optimism showing,  we did it before why not again?


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## Purple (27 Jun 2022)

NoRegretsCoyote said:


> You are wrong. Have a look at Table A6 here.
> 
> Net borrowing of public sector (ie the government deficit) in 2021 was 3.6% of GNI*, 0.8% of GNI* in 2022.
> 
> ...


So what, we are still borrowing to fund current public expenditure, or do you think we shouldn't build any roads or schools or hospitals?
The latter are critical public infrastructure and are a national priority. In other words they get the money first. Pay rises and giving doctors and nurses more money to waste in their inefficient running of the health service comes afterwards. It is the latter that is borrowed.


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## Purple (27 Jun 2022)

Paul O Mahoney said:


> In fairness from 88 to 2002 were extremely good years ,ok devaluation of the punt is hard to understand what benefits or costs it caused, but by 2002 ish the national debt was circa €40/45bn , surpluses were common, SSIA was introduced,  Wally idea, funds were coming in from EU and were spent well,  motorways etc.
> 
> By 2002 one would have thought that "maybe we have a future " then we all know what happened and the Government of the day " didn't know why" and we have literally sinking slowly since,  not just economically but all other aspects of our country.
> 
> But, and this my optimism showing,  we did it before why not again?


Yea, I'd go with that. The PD's under Mary Harney did the State some service. (I'm not sure if we are allowed to say that CJ Haughey also did in his last stint in power).


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## Paul O Mahoney (27 Jun 2022)

Purple said:


> Yea, I'd go with that. The PD's under Mary Harney did the State some service. (I'm not sure if we are allowed to say that CJ Haughey also did in his last stint in power).


I think "some " is appropriate when it comes to Harney, I  attended a " lunch" with her after we announced more jobs , year ? Early 2001 I think,  sharp  woman, but the decision to set up HSE was fine but nothing changed in the background and nothing was done to change it. 

And her " inner" circle was less than pragmatic when it came to decisions that would have made the country better. You can probably guess.


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## Peanuts (27 Jun 2022)

The biggest problem I think is that politicians do not get rewarded for doing the right thing, i.e. Governments not getting re-elected. That leads to overspending/tax -cuts in order to 'buy' votes. I don't know how we get around that.


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## Paul O Mahoney (27 Jun 2022)

Peanuts said:


> The biggest problem I think is that politicians do not get rewarded for doing the right thing, i.e. Governments not getting re-elected. That leads to overspending/tax -cuts in order to 'buy' votes. I don't know how we get around that.


Don't think there's a solution, there is a growing discussion that western democracy doesn't work on most levels.

The Democracy that Socrates advocated 2500 years ago was novel but I don't think he would have foreseen it been the way that billions would be ruled.

Freedom is such a cliche today and when ones takes a little time to look at the world, the 90% of the global population that are struggling with lifes problems want solutions now, whatever the cost.

I honestly think that we are worse off in totality than at any other time in history,  in the mid 1950s there was a report that showed, even only 10 years after the war the planet had enough to feed, house and educate the global population, if that was done then we probably wouldn't be in the mess that we've endured since.

Political parties will say what they want and people will vote for them based on that, but people also have a responsibility to understand,  question and hold to account any promises made, but we don't.

And to get back to the OP there are plenty of ways that could be looked at in order to create that responsibility but " turkeys don't vote for Christmas "


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## Brendan Burgess (27 Jun 2022)

Hi Coyote

You highlighted only half of what I said. Did you not see the first half? 

_ there are differences between managing the family finances and managing the public finances, _*we should apply the same general principles to both.*

I fully acknowledge the differences between them, but the same general principles apply.  We should try to live within our means. We can spend more in the bad times and spend less in the good times. 

The problem with saying "family finances and public finances are different" is that people say that it's ok for the government to run up massive spending as later generations will pay it off. 

Are you suggesting that the current government is managing the public finances well?  Do you think that they are right in blowing the artificially high tax take and the artificially low cost of servicing the government debt? 

Do you think that they should be spending a lot more and taxing a lot less? 

Brendan


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## Brendan Burgess (27 Jun 2022)

Charlie McCreevy was berated for the opposition for not spending enough. 

Just as Paschal Donohoe is now.

Both claimed to be managing the finances prudently.  Charlie wasn't and Paschal isn't either. 

Apparently what Charlie actually said was "When I have the money I will spend it, but when I don't, I won't."

Although no one seems to be able to find the original source of the quote.

Brendan


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## Brendan Burgess (27 Jun 2022)

Purple said:


> So what, we are still borrowing to fund current public expenditure, or do you think we shouldn't build any roads or schools or hospitals?



Hi Purple 

I think you might have misunderstood Coyote's figures? 

He is saying the opposite. 

At the moment, we are not borrowing for current expenditure. We are borrowing for capital expenditure. 

I think we are all agreed that borrowing for _appropriate _capital expenditure is ok. 

Brendan


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## nest egg (27 Jun 2022)

Brendan Burgess said:


> ...We need a structural solution to this political problem. We should give the Irish Fiscal Advisory Council, or some new statutory body, the power to manage the public finances for the long-term. Take it out of the hands of politicians. It would decide whether a surplus or deficit were appropriate, and the government of the day could make choices on spending and taxation within those limits. If the government wanted to increase public expenditure, then they would have to increase taxes. If they wanted to cut taxes, they would have to cut public expenditure. But they couldn’t cut taxes and increase public expenditure unless the IFAC decided that running a deficit was the correct strategy at that time....



Couldn't agree more Brendan, there is a structural deficit. In fact there are two structural deficits you've highlighted: 1) the politicians, 2) the power/ability to manage things competently. 

The second is just as important, as in Ireland there is a complete lack of accountability for delivery in our "permanent government", which rarely is called out. Why politicians put up with this I'm not quite sure, as they take on all the risk when outlining their grand plans, which they then have little ability to ultimately control.

My proposal, there is a ready-made model we could apply. Taking a leaf out of the EU's book, we should establish an Irish "Commission". Its job being to propose legislation, implement & enforce it, and manage the budget. Perfect, no, but a damn sight better than what we have in place today.


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## Brendan Burgess (27 Jun 2022)

NoRegretsCoyote said:


> No, no, and no. Pooling our resources via taxes is an exercise in collective action, and it needs clear lines of accountability to those who contribute and benefit. Handing this over to an unelected body takes the power to far away from the people.



Coyote, I would agree with you ideologically.

And it probably works well enough in Nordic countries and in Germany. 

But it just doesn't work well in Ireland. We go from boom to bust. We had austerity when it would have been better if we could have afforded to spend.  We are spending like crazy now, when we should be cutting back. 



Brendan Burgess said:


> We should give the Irish Fiscal Advisory Council, or some new statutory body, the power to manage the public finances for the long-term.



I mentioned IFAC but it could be another body. But if we have another body, then we won't need IFAC. 

We have handed the power over the setting of interest rates much further from the people - the ECB. 

Wasn't interest rate policy under the control of governments for a long time and most of them have now handed it over to their Central Banks? 

Brendan


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## Paul O Mahoney (27 Jun 2022)

Brendan Burgess said:


> Charlie McCreevy was berated for the opposition for not spending enough.
> 
> Just as Paschal Donohoe is now.
> 
> ...


I seem to remember it was outside Department of Finance and was and RTE interview and the surplus running up to the budget was €4bn , It was George Lee's report and interview.


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## NoRegretsCoyote (27 Jun 2022)

Brendan Burgess said:


> You highlighted only half of what I said. Did you not see the first half?


I quoted you in full!



Brendan Burgess said:


> Are you suggesting that the current government is managing the public finances well? Do you think that they are right in blowing the artificially high tax take and the artificially low cost of servicing the government debt?


I don't follow it closely enough any more to have a strong opinion. What I would say is that it is notoriously difficult to tell the difference in Ireland between temporary and permanent tax revenue.




Brendan Burgess said:


> The problem with saying "family finances and public finances are different" is that people say that it's ok for the government to run up massive spending as later generations will pay it off.



Of course it's okay. Sovereigns are perpetual, households are not. We are borrowing today so that future generations will have better public infrastructure. This will allow more economic activity to service the debt. In my experience accounting training can make it harder to understand this point as you end up looking at individuals and enterprises all the time and not at the big picture.

There is also the fact that on the demand side the financial system needs trillions in safe assets. Real interest rates are still negative. It would be a crazy government that would turn away free money to generate better public services in the pursuit of parsimony for its own sake.


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## Brendan Burgess (27 Jun 2022)

I might not like a government increasing spending on social welfare  and Sláinte Care and stuff like that. But I recognise the government's right to do that. But they should be obliged to raise taxes to fund expenditure. 

Brendan


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## Brendan Burgess (27 Jun 2022)

Paul O Mahoney said:


> It was George Lee's report and interview.



But no one can link back to it. I will ask George Lee. 

Brendan


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## NoRegretsCoyote (27 Jun 2022)

Brendan Burgess said:


> But it just doesn't work well in Ireland. We go from boom to bust. We had austerity when it would have been better if we could have afforded to spend. We are spending like crazy now, when we should be cutting back.


Ireland's boom-bust cycle is partially natural in origin due to an extremely open labour market.


Pro-cyclical fiscal policy don't help of course but I think the changes brought in after the last crash (Fiscal Council asssessment, and macro- and micro-prudential rules for banks) make the risk of boom-bust much lower.


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## Purple (27 Jun 2022)

Brendan Burgess said:


> Hi Purple
> 
> I think you might have misunderstood Coyote's figures?
> 
> ...


No, I got that but which we choose to borrow for is just an accountancy issue. We could just as easily say that we are not borrowing for Capital expenditure but are for Current expenditure and allocate our resources that way. 
We have increased current expenditure in a time when the economy is is a growth cycle. We're now going to start chasing inflation with increases in welfare and the wages of State employees and we are borrowing money to cover the total tab. 
We can say that the borrowing is for Capital expenditure. Good!
We can say that the borrowing is for Current expenditure. Bad.
We can say that the borrowing is to service our debt. Even worse!

The bottom line is that we are borrowing and if we weren't increasing current expenditure we'd have to borrow far less.


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## Purple (27 Jun 2022)

mojoask said:


> The second is just as important, as in Ireland there is a complete lack of accountability for delivery in our "permanent government", which rarely is called out. Why politicians put up with this I'm not quite sure, as they take on all the risk when outlining their grand plans, which they then have little ability to ultimately control.


Very important point.


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## Brendan Burgess (27 Jun 2022)

Sorry, I don't follow that at all. 

It is not just an accountancy issue. 

There is a huge difference between borrowing money to build the M50 and borrowing money to give teachers a salary increase.

Brendan


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## Purple (27 Jun 2022)

NoRegretsCoyote said:


> Of course it's okay. Sovereigns are perpetual, households are not. We are borrowing today so that future generations will have better public infrastructure. This will allow more economic activity to service the debt. In my experience accounting training can make it harder to understand this point as you end up looking at individuals and enterprises all the time and not at the big picture.
> 
> There is also the fact that on the demand side the financial system needs trillions in safe assets. Real interest rates are still negative. It would be a crazy government that would turn away free money to generate better public services in the pursuit of parsimony for its own sake.


But we're not doing that. The shortcomings in our health service are structural in nature. We are paying people more and hiring more people without addressing those shortcomings. We are also increasing pensions and other social transfers. That doesn't improve the social infrastructure for future generations, in fact it will probably do the opposite.


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## Purple (27 Jun 2022)

Brendan Burgess said:


> Sorry, I don't follow that at all.
> 
> It is not just an accountancy issue.
> 
> ...


If you don't give the teachers a pay rise you'll have to borrow less money to build the M50. 

So, why not say we're borrowing to give the teachers a pay rise and allocate the money for their pay rise to the M50? It's all coming out of the same pot. 

The number of people working in the HSE increased by more than 20% between 2014 and 2020.  There's now 135,000 full time equivalent employees working in and for the HSE. That cost as much as the new National Children's Hospital will ever cost.


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## NoRegretsCoyote (27 Jun 2022)

Brendan Burgess said:


> There is a huge difference between borrowing money to build the M50 and borrowing money to give teachers a salary increase.


Ireland will spend about 5% of national income this year on capital infrastructure. The government will run an overall small surplus so none of that 5% will be borrowed.


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## Brendan Burgess (27 Jun 2022)

I see the point you are making, but it's not really correct. 

It assumes that we should not borrow to build the M50. There is actually nothing wrong with borrowing to build the M50. 

Brendan


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## Brendan Burgess (27 Jun 2022)

NoRegretsCoyote said:


> Ireland will spend about 5% of national income this year on capital infrastructure. The government will run an overall small surplus so none of that 5% will be borrowed.



Coyote

I am trying to understand your overall point. 

Are you saying that our finances are sensibly managed?  That running up the borrowing over the last number of years is not a problem? That we have spent the Corporation Tax windfalls and low cost of servicing the debt well? 

And there is no risk of the state getting into difficulties when any or all of the following happens: 
1) A fall off in Corporation Tax Revenue
2) A rise in interest rates causing an increase in the cost of servicing debt
3) A recession which will hit general tax revenues and increase our social welfare bill 
4) The cost of Mica, refugees etc
5) Some other unexpected economic shock.

Brendan


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## NoRegretsCoyote (27 Jun 2022)

Brendan Burgess said:


> It assumes that we should not borrow to build the M50.


I am perfectly happy with borrowing for capital investment.

There will be no borrowing for capital investment this year. Some posters on this thread are even claiming that we are borrowing for current expenditure, whereas in fact we are borrowing for neither!


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## NoRegretsCoyote (27 Jun 2022)

Brendan Burgess said:


> Are you saying that our finances are sensibly managed?  That running up the borrowing over the last number of years is not a problem? That we have spent the Corporation Tax windfalls and low cost of servicing the debt well?


I don't know! It's been a long time since I looked at the numbers thoroughly. My overall point is that a country is not a tennis club and books don't have to balance every year. 

Too much government borrowing can lead to bad things (we all remember the troika years) but permanent deficits are fine for a country in a way that they are not for a corporation. France has not run a budget surplus in 40 years and it is not insolvent!









Brendan Burgess said:


> And there is no risk of the state getting into difficulties when any or all of the following happens:
> 1) A fall off in Corporation Tax Revenue


Yes. But what is the magnitude here? Losing €2bn of the current €14bn take over a few years is manageable. I haven't seen any indication that IP-intensive tech firms have any plans to reduce Irish activity, in fact the opposite.



Brendan Burgess said:


> 2) A rise in interest rates causing an increase in the cost of servicing debt


But this process will be extremely slow to feed through the stock of outstanding debt. A sharp rise in rates would see borrowing go from 1.2% of GNI* to 2.5* of GNI* over five years? That's a lot of time to plan.



Brendan Burgess said:


> 3) A recession which will hit general tax revenues and increase our social welfare bill


I think there is an exposure there for sure. Ireland's labour market is unusually flexible and in a recession a lot of workers get laid off. You could easily see unemployment double and benefits increase by €5bn in 18 months. I thought the idea floated a few years ago of a Rainy Day Fund was good, but it has never been implemented.



Brendan Burgess said:


> 4) The cost of Mica, refugees etc


I agree. A lot of "one-off" things like Covid, Mica, refugees, etc have been covered by the expanding corporation tax take in recent years. That's not a good policy and the IFAC has pointed it out on a few occasions now.


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## Paul O Mahoney (27 Jun 2022)

NoRegretsCoyote said:


> I am perfectly happy with borrowing for capital investment.
> 
> There will be no borrowing for capital investment this year. Some posters on this thread are even claiming that we are borrowing for current expenditure, whereas in fact we are borrowing for neither!


Then why are the NTMA issuing Treasury Bonds , usually short term funding and other bonds that are longer term. 

I'm the first to admit my knowledge of this area is rudimentary,  but if we're not borrowing for current and capital expenditure where is the money coming from , existing debt?


----------



## Brendan Burgess (27 Jun 2022)

NoRegretsCoyote said:


> My overall point is that a country is not a tennis club and books don't have to balance every year.



We are in agreement so. 

By the way, I don't think I have ever seen a set of accounts for a tennis club, but I am sure that they borrow substantial sums for redeveloping their courts or acquiring new land. 

Brendan


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## Brendan Burgess (27 Jun 2022)

Paul O Mahoney said:


> Then why are the NTMA issuing Treasury Bonds , usually short term funding and other bonds that are longer term.



Hi Paul

We have a lot of cash on deposit as well which is financed by bonds.

The NTMA borrows money long-term when it judges it's a good time to do it.

If the bond markets froze tomorrow, we probably have enough for the next year or so - to fund expenditure and to repay the maturing debt.

Brendan


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## Brendan Burgess (27 Jun 2022)

Here is the forecast for 2022 before the Budget changes. 



			https://assets.gov.ie/201068/9ec5cfec-6634-459e-a080-2d8a907a5e06.pdf
		



Here is the updated position for first quarter . Not sure if there is a forecast in this format for the full year.



			https://assets.gov.ie/222823/4b737d51-37d7-4c63-8655-2b3ee8c6422c.pdf


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## Paul O Mahoney (27 Jun 2022)

Brendan Burgess said:


> Hi Paul
> 
> We have a lot of cash on deposit as well which is financed by bonds.
> 
> ...


I understand that but wouldn't that still be borrowed money? And interest is payable think its €2.1bn this year.

I know that Governments don't do accrual accounting but borrowing in year 1 to fund year 2 is still " borrowing ".

This is another example of the lack of transparency and by extension internal control,  if any company were to say we won't be borrowing money this year to fund expansion of the business theyd be in serious trouble,  both legally and financially.


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## Brendan Burgess (27 Jun 2022)

Hi Paul

You asked why the NTMA was issuing bonds.

They don't need to do so at the moment as they have plenty of cash on hand.

That is the point I was making. 

Brendan


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## Paul O Mahoney (27 Jun 2022)

Brendan Burgess said:


> Hi Paul
> 
> You asked why the NTMA was issuing bonds.
> 
> ...


But they have issued this year €1.5bn t Bill's and a bond for 1.25bn , might be that they are surrendering more expensive debts. 

But my point is that how can we and there are some very clever people in this country understand the problems of transparency and devising methods to over come these problems and by extension hold the government accountable for the mismanagement of our economy. 

And this is right across the entire governmental remit, housing,  health, social services it disgraceful that the information is so difficult to get and then comprehend. 

Rant over.


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## Sophrosyne (27 Jun 2022)

Brendan Burgess said:


> Charlie McCreevy was berated for the opposition for not spending enough.
> 
> Just as Paschal Donohoe is now.
> 
> Both claimed to be managing the finances prudently. Charlie wasn't and Paschal isn't either.


I disagree with your comment regarding Pascal Donohoe.
I think he is a very competent Finance Minister.


----------



## Paul O Mahoney (27 Jun 2022)

Sophrosyne said:


> I disagree with your comment regarding Pascal Donohoe.
> I think he is a very competent Finance Minister.


In fairness I think most FG finance ministers had a tough time with the leftovers of previous FF governments but did their jobs pretty well.

Donohue would be the best . Hes articulate he knows his brief and explains situations very well.


----------



## Brendan Burgess (27 Jun 2022)

Sophrosyne said:


> I think he is a very competent Finance Minister.



Hi Sop

Could you back up your opinion with some argument? 

He is ruining the public finances with his overspending.

He keeps claiming the public finances are in a good position, when they manifestly are not. 



Brendan


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## lff12 (29 Jun 2022)

Paul O Mahoney said:


> That opportunity sailed away 20 years ago and nothing they could do now will change voters minds.
> Everyone wants everything now.
> 
> Mc Creevy, "I have it so I'm going to spend it" ruined the country as most now think they always have it.


I'm inclined to agree here - not to mention the fact that many people regard FF and FG as the most extreme right wing, stingy parties that ever lived.

Slaintecare as proposed will cost nearly double of the perfectly viable compulsory health insurance plan FG originally had when elected in 2011 - thrown out because it would have costed nearly 2bn. But Slaintecare will cost nearly double that!

Part of the issue is that there is no real viable political entity to the right of FG - without that both centre parties are backed into spiralling wildly on spending, not least because much of it never gets seen.


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## lff12 (29 Jun 2022)

Peanuts said:


> The biggest problem I think is that politicians do not get rewarded for doing the right thing, i.e. Governments not getting re-elected. That leads to overspending/tax -cuts in order to 'buy' votes. I don't know how we get around that.


Had FG actually persisted with cuts in spending from 2014 on they would absolutely not have been reelected in 2016, never mind 2020 (where they still won more seats than their 2002 outing).


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## Paul O Mahoney (29 Jun 2022)

We don't need right or left,  we need fairness we need to show that lifes decisions are hard, but the message should be something like " if you fall society will catch you and break your fall, but it's you and only you who needs to get back up" 

Of course some can't and they need tending to, but the majority can and once we eradicate " equality " as a concept people will find their level,  and that level will be respected by all. 

It's not complicated.


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## Sophrosyne (30 Jun 2022)

Paul O Mahoney said:


> A more pragmatic way, and this will seem nuts , is to have people run the country have the voices of the people heard and noted and substantial decisions voted upon, we have the technology now to do this, polls are 10 a penny, use the technology to get approval or dismissal of the proposition, there "could be an app for that".


Paul, while I understand that you are philosophizing, no governmental system is perfect.

We have a constitution that contains our aspirations.

Management of the economy requires at least a basic grasp of governmental economics, which not everyone has.

Besides the interaction of inter alia, economic growth, taxation, expenditure, borrowings, interest rates & inflation, Finance Ministers have to be across a multitude of reports and data – national & international.

We might end up with the drunks on the bus telling us how to get rich, or endless discussion so that nothing gets decided.


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## Purple (30 Jun 2022)

Sophrosyne said:


> We might end up with the drunks on the bus telling us how to get rich, or endless discussion so that nothing gets decided.


Are we far off that now?
It is just about impossible to implement structural reforms within the State Sector so we end up with endless reports, populists nonsense getting platforms in the national media and endless amounts of money thrown at the shortcomings rather than fixing those shortcomings. That cycle doesn't lend itself to good government and it isn't indicative of an economically literate electorate.


----------



## joe sod (30 Jun 2022)

NoRegretsCoyote said:


> No it shouldn't. This is taking a tennis-club accounts approach to public finances, which are a different animal. States (unlike their citizens) are perpetual, and there will be someone around to tax in fifty or a hundred years time to pay the debt back. This means that states can and should borrow to invest in infrastructure that will be the foundation of a future tax base.


What about Argentina,  Venezuela and almost Italy Greece and ourselves during the financial crisis they defaulted on their debts  , the debt was too high for their public finances to manage or for their tax payers to pay back.
They become pariah states closed off from the global financial markets with drastic cuts in public salaries and welfare payments,  remember where we were in 2010 when the bond markets would not lend to us because we were too high risk, we had to be bailed out


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## cremeegg (30 Jun 2022)

NoRegretsCoyote said:


> We are borrowing today so that future generations will have better public infrastructure. This will allow more economic activity to service the debt. In my experience accounting training can make it harder to understand this point as you end up looking at individuals and enterprises all the time and not at the big picture.


Brendan's original article does not give enough room to this essential point.

Indeed if we fail to grow the economy we will leave lower living standards to our children.


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## cremeegg (30 Jun 2022)

Brendan Burgess said:


> There is a huge difference between borrowing money to build the M50 and borrowing money to give teachers a salary increase.
> 
> Brendan


Are you sure about this. Is there really such a difference.

Teachers with money to spend will buy cinema tickets, restaurant meals, haircuts, new kitchens etc. all leading to increased economic activity and investment by cinema chains, restauranteurs, hairdressers and kitchen installers.

We would not need the M50, if all those cinema ushers, waiters, hairdressers and carpenters didn't have any work to go to.


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## Purple (30 Jun 2022)

cremeegg said:


> Are you sure about this. Is there really such a difference.
> 
> Teachers with money to spend will buy cinema tickets, restaurant meals, haircuts, new kitchens etc. all leading to increased economic activity and investment by cinema chains, restauranteurs, hairdressers and kitchen installers.
> 
> We would not need the M50, if all those cinema ushers, waiters, hairdressers and carpenters didn't have any work to go to.


By that logic the more we borrow to spend the better off we become. Ask the 1970's how that works out.

It's a false dichotomy anyway. We can choose to spend the money on the M50, not give teachers pay rises and not borrow, or we can choose to spend the money on pay rises for the teachers and not build the M50 and not borrow, or we can choose to do both and borrow the money. Which item of expenditure the borrowing is allocated against doesn't change the choices we have.  
We spend a decade and a half funding current expenditure using Capital transaction taxes. I don't think that's a good idea. 
We could, if we chose to, spend current tax receipts on Capital items. I think that is a good idea.


----------



## Purple (30 Jun 2022)

cremeegg said:


> Brendan's original article does not give enough room to this essential point.
> 
> Indeed if we fail to grow the economy we will leave lower living standards to our children.


Spending on infrastructure usually helps to grow the economy. Spending money which is taken in part from the wealth creating sector of the economy on pay rises that are not tied to productivity increases does not have a net positive impact on growth and living standards.


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## cremeegg (30 Jun 2022)

Purple said:


> Spending on infrastructure usually helps to grow the economy.


Yes.


Purple said:


> Spending money which is taken in part from the wealth creating sector of the economy on pay rises that are not tied to productivity increases does not have a net positive impact on growth and living standards.


How do you know this. Is there any evidence to support it.

In the Irish context, if there was evidence that the wealth generating sector was struggling to raise finance for investment, you might have a point, but (outside the housebuilding industry, and that for very specific reasons), I see no evidence that there is any shortage of finance for investment.

As for increased productivity, in most public sectors areas, especially health but also education, the problems being experienced are problems of management and governance rather than lack of productivity.

Spending twice as long teaching LC maths students Algebra for the same pay, or the same length of time for less pay, does nothing to address the reasons why Matrices were dropped from the LC maths course. There are huge issues of the education system being fit for purpose, or indeed agreeing what the purpose might be.

An electronic medical records system could transform the health service, irrespective wether nurses are rostered for 35.5 hours or 39.

It is easy to see issues in the public services, but bringing them all back to money either 'give us more' or we don't get value for money' are just lazy responses from people who do not wish to engage in the difficult discussions as to how public services should be reformed.


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## Protocol (30 Jun 2022)

cremeegg said:


> Are you sure about this. Is there really such a difference.
> 
> Teachers with money to spend will buy cinema tickets, restaurant meals, haircuts, new kitchens etc. all leading to increased economic activity and investment by cinema chains, restauranteurs, hairdressers and kitchen installers.
> 
> We would not need the M50, if all those cinema ushers, waiters, hairdressers and carpenters didn't have any work to go to.



You would need to know the relevant expenditure multiplier.

I will have a look.






						Ireland’s Spending Multipliers – Irish Fiscal Advisory Council
					






					www.fiscalcouncil.ie
				




What do the results show?​The paper’s results show that government spending may have positive and significant initial impacts on Irish economic activity, though these effects tend to disappear and/or become statistically insignificant over the longer term. Caution is warranted. We find large differences in fiscal multiplier estimates, and we find very limited evidence that the effects are significant in the medium to long run. While this is to be expected in the case of a small open economy such as Ireland, where higher imports can offset the overall impact on output, it underscores the need for caution in drawing strong inferences from the results.


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## Protocol (30 Jun 2022)

People who claim that higher public/State expenditure will boost the economy *are presuming that the relevant expenditure multipliers are large and positive*.

I would not be so sure.

A quote from the Fiscal Council paper on multipliers:

"Our findings suggest that there is some evidence of positive, significant initial impacts on economic activity associated with fiscal policy, yet these effects disappear over the longer term. The estimated impacts are wide-ranging and uncertain, with limited evidence of positive impacts on the economy from government consumption as a whole. Within this, we find broadly negative—though insignificant effects—from public sector wages. Investment spending tends to have higher short-term multipliers, but the significance disappears over the medium to long term. This is consistent with theory and with the fact that Ireland’s relatively large dependence on imports leads to high leakages of income (Cronin and McQuinn, 2014)."


There are huge leakages out of the Irish economy, so much extra public spending leads to more imports.


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## joe sod (30 Jun 2022)

NoRegretsCoyote said:


> There is also the fact that on the demand side the financial system needs trillions in safe assets. Real interest rates are still negative. It would be a crazy government that would turn away free money to generate better public services in the pursuit of parsimony for its own sake.


Not even Paul Murphy would come out with that   as a justification for uncontrolled spending.  That banks and insurance companies are clamouring to buy government bonds !!
They are forced into buying them by government regulations,  they are not free buyers of bonds and guess what irish banks are required to hold much more of those bonds than their European counterparts which explains why Ulster bank and KCB are leaving, along with other irish specific reasons 

Governments are basically "shaking out" financial institutions for their own funding requirements.
As for "negative real interest rates" yes that is correct but it is because the ECB is forcing down interest rates by continuing to buy those bonds and not allowing interest rates to rise but that long cycle looks to be ending as inflation now almost out of control


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## Purple (30 Jun 2022)

cremeegg said:


> How do you know this. Is there any evidence to support it.


Kind of. (Edit: @Protocol 's post above provides a better answer)


cremeegg said:


> In the Irish context, if there was evidence that the wealth generating sector was struggling to raise finance for investment, you might have a point, but (outside the housebuilding industry, and that for very specific reasons), I see no evidence that there is any shortage of finance for investment.


It's not about access to finance, it's about the overall impact of taxation on economic growth, especially increases in what are already high rates of taxation. In general borrowing to replace the cash you have paid in tax is not ideal.


cremeegg said:


> As for increased productivity, in most public sectors areas, especially health but also education, the problems being experienced are problems of management and governance rather than lack of productivity.


People are either hard working or not hard working. Systems and processes are either efficient or inefficient. It is very important to make that distinction. A person who works very hard in an inefficient process is working hard but working inefficiently.
Think of a factory where someone had to run between two machines which are 100 metres apart to keep them operating. That is inefficient. Moving the machines together would increase efficiency.
It doesn't matter how fast they run, it will still be inefficient. A hospital admission system which requires two administrator to input the same data at two different stages of the patient admission process is inefficient, it doesn't matter how fast the administrators work. Inputting the data once would improve efficiency.


cremeegg said:


> Spending twice as long teaching LC maths students Algebra for the same pay, or the same length of time for less pay, does nothing to address the reasons why Matrices were dropped from the LC maths course. There are huge issues of the education system being fit for purpose, or indeed agreeing what the purpose might be.


I agree. Paying the teacher more just sucks up more public money. That is not efficient in that there is no return on the investment.


cremeegg said:


> An electronic medical records system could transform the health service, irrespective wether nurses are rostered for 35.5 hours or 39.


Exactly, so agree to shorter hours if they agree to an electronic medical records system being introduced and the job losses in admin and the changes in work practices for the Nurses to better utilise the time they have freed up.


cremeegg said:


> It is easy to see issues in the public services, but bringing them all back to money either 'give us more' or we don't get value for money' are just lazy responses from people who do not wish to engage in the difficult discussions as to how public services should be reformed.


I agree.


----------



## Sophrosyne (30 Jun 2022)

Paul O Mahoney said:


> Our constitution needs updating and the issues that face us need to be addressed and not just here the entire system is broken. Elections are seeing fewer and fewer people participating which is their democratic right but it also leaves the same people in power or at least same parties with the same tired policies.
> 
> As a country we have enough to sort out the mess in most aspects of Health, Housing, education but day after day new "problems " are born and nothing gets done.
> 
> I apologise for the posts and some of the silly ideas but something has to change.


Don’t apologize, I am not disagreeing with everything you say.

I wouldn’t agree that the entire system is broken, but yes, we do have issues.

The problem is not always one of transparency, though sometimes it is, but it can be a lack of data. This leads to idle speculation, often presented as irrefutable fact, as to what the problems actually are.

Some time ago I posted here, here and here about cost outruns in the Health budget. You can see that lack of data, untimeliness of data transfer and misalignment of the Health Vote and the HSE budget rendered reports meaningless so that oversight and budget planning was obstructed significantly.

You could say that the same is true of other “problem” departments.

Most of the fiscal reports I have read, contain numerous annotations and caveats to the effect that they are compiled on the basis of _available_ but inadequate data. This, of course, devalues reports despite the best efforts of their authors who usually call for better and more timely reporting so that realistic budgets can be set and performance analysis improved greatly.

Issues cannot be pinpointed and dealt with unless they can be identified clearly.

Government departments and State agencies need to embrace technology and/or better technology in order to manage their businesses and to provide the necessary information for oversight committees to interrogate.


----------



## lff12 (30 Jun 2022)

I think you've a good point there about productivity @Purple. Unfortunately thats exactly how the original Social Partnership was supposed to work in the late 90s, but in reality its never really been established that it worked, because some unions always saw it as a bargain they could later demand to renegotiate. Hence we have a scenario where most public sector office workers are demanding a reduction in hours from 37-39 to under 35 (https://www.rte.ie/news/2022/0414/1...orking hours saw,hours or more were unchanged.) while junior doctors are still on a workload that is simply bananas (https://www.thejournal.ie/junior-doctors-burnout-overtime-working-conditions-5743137-Apr2022/)


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## cremeegg (30 Jun 2022)

Purple said:


> Kind of. (Edit: @Protocol 's post above provides a better answer)
> 
> It's not about access to finance, it's about the overall impact of taxation on economic growth, especially increases in what are already high rates of taxation. In general borrowing to replace the cash you have paid in tax is not ideal.


'It' being tax from the wealth producing sector. There is an ideal level of tax in any economy, and it certainly is not zero. Personal taxes in Ireland are high, that is possible because wages are high. A French computer programmer would rather €100k in Dublin and pay an effective tax rate of 40%, than earn €50k in Toulouse and pay effective tax rate of 25% [I admit I made up the numbers}, but the point is that high pay and high taxes are connected.



Purple said:


> People are either hard working or not hard working. Systems and processes are either efficient or inefficient. It is very important to make that distinction. A person who works very hard in an inefficient process is working hard but working inefficiently.
> Think of a factory where someone had to run between two machines which are 100 metres apart to keep them operating. That is inefficient. Moving the machines together would increase efficiency.


The problem is that many of the 'machines' in our Health Service are producing unwanted or dud parts. Many  people in hospital beds should be in nursing home care. Whether there are 3 nurses or 5 looking after them is secondary.

My local private hospital does MRI scans until 11pm. That is effective use of valuable machinery. However many of the scans are completely redundant. No one in the system has the courage to say to a complainant with a sore arm, 'you don't need a scan go home and it will get better by itself'.


----------



## Sophrosyne (1 Jul 2022)

cremeegg said:


> No one in the system has the courage to say to a complainant with a sore arm, 'you don't need a scan go home and it will get better by itself'.


Not the best example in the world - diabetes, heart problems, rheumatoid arthritis ....

Doctors order scans after a series of questions and a physical examination of the patient.


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## Purple (1 Jul 2022)

cremeegg said:


> 'It' being tax from the wealth producing sector. There is an ideal level of tax in any economy, and it certainly is not zero. Personal taxes in Ireland are high, that is possible because wages are high. A French computer programmer would rather €100k in Dublin and pay an effective tax rate of 40%, than earn €50k in Toulouse and pay effective tax rate of 25% [I admit I made up the numbers}, but the point is that high pay and high taxes are connected.


But the marginal tax rate is what people look at. It's also what makes people work shorter hours.
We have expensive childcare and very high marginal tax rates and we wonder why women with children worker short hours. 
Taxing wealth creation reduces wealth creation. Taxing wealth retention does not. 


cremeegg said:


> The problem is that many of the 'machines' in our Health Service are producing unwanted or dud parts. Many  people in hospital beds should be in nursing home care. Whether there are 3 nurses or 5 looking after them is secondary.


I agree, but the healthcare Unions resist all meaningful change so nothing meaningful changes. 


cremeegg said:


> My local private hospital does MRI scans until 11pm. That is effective use of valuable machinery.


Yes, as should be the case in every publicly funded hospital. 


cremeegg said:


> However many of the scans are completely redundant. No one in the system has the courage to say to a complainant with a sore arm, 'you don't need a scan go home and it will get better by itself'.


That's up to the GP that sent them there.


----------



## Purple (1 Jul 2022)

Sophrosyne said:


> Not the best example in the world - diabetes, heart problems, rheumatoid arthritis ....
> 
> Doctors order scans after a series of questions and a physical examination of the patient.


They also order them because they aren't competent enough to make a proper diagnosis, because they are trying to keep their patient happy or because they want them out of the room and the next patient in.


----------



## cremeegg (1 Jul 2022)

Sophrosyne said:


> Not the best example in the world - diabetes, heart problems, rheumatoid arthritis ....
> 
> Doctors order scans after a series of questions and a physical examination of the patient.


Possibly not the best example of what I was trying to illustrate, which ws that the problems in the health system go beyond how hard people work or how efficient the processes are.

Preventative health care, treatment at the lowest appropriate level, giving people the treatment they need rather than the treatment they expect.  There are many other more general example of improved approaches that could transform the health service more effectively than staff working longer or faster.


----------



## cremeegg (1 Jul 2022)

Purple said:


> I agree, but the healthcare Unions resist all meaningful change so nothing meaningful changes.


And the health system management is too weak to change that, mostly because it lacks the political support to do so.

I worked briefly many years ago in one of the Universities. The University employed teams of maintenance staff and grounds keepers. Each group had their own uniforms. The restrictive practices were a joke. Two guys came to paint my small office one day, set up ladders dust covers etc. disappeared for a week, came back and finished the job in 2 hours. I understand they did nixers in the time they were allocated to my office.

The university never challenged this directly, they simply brought in outside contractors and paid them a contract price. They bought off the existing staff with pay rises and generous redundancy packages. Today the University employees very few maintenance staff and those are on revised contracts.

The Health Service management have never been strong enough to launch something like this or indeed any other reform plan.


----------



## Purple (1 Jul 2022)

cremeegg said:


> And the health system management is too weak to change that, mostly because it lacks the political support to do so.
> 
> I worked briefly many years ago in one of the Universities. The University employed teams of maintenance staff and grounds keepers. Each group had their own uniforms. The restrictive practices were a joke. Two guys came to paint my small office one day, set up ladders dust covers etc. disappeared for a week, came back and finished the job in 2 hours. I understand they did nixers in the time they were allocated to my office.
> 
> ...


A friend of mine just left his relatively well paid job in the HR department of a University. He said that he just couldn't deal with a place where work practices were so bad and so little work was actually done. He reckoned that he was becoming unemployable in any private sector job as he was losing the ability to actually do any work.


----------



## Deiseblue (1 Jul 2022)

lff12 said:


> I think you've a good point there about productivity @Purple. Unfortunately thats exactly how the original Social Partnership was supposed to work in the late 90s, but in reality its never really been established that it worked, because some unions always saw it as a bargain they could later demand to renegotiate. Hence we have a scenario where most public sector office workers are demanding a reduction in hours from 37-39 to under 35 (https://www.rte.ie/news/2022/0414/1292436-public-service-working-times/#:~:text=The additional working hours saw,hours or more were unchanged.) while junior doctors are still on a workload that is simply bananas (https://www.thejournal.ie/junior-doctors-burnout-overtime-working-conditions-5743137-Apr2022/)


Public sector workers are not seeking a reduction of hours to under 35 hours , why would they when an independent review body has already stated that the vast majority of public sector workers be returned to a standardised minimum full time 35 hour week ( not under 35 hours ).
The Government has accepted this recommendation and the good news is that it comes into effect today !


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## Firefly (1 Jul 2022)

Deiseblue said:


> Public sector workers are not seeking a reduction of hours to under 35 hours , why would they when an independent review body has already stated that the vast majority of public sector workers be returned to a standardised minimum full time 35 hour week ( not under 35 hours ).
> The Government has accepted this recommendation and the good news is that it comes into effect today !


It's certainly good news in our house. Herself is currently taking some parental leave, but as she will still work the same hours, it means that she will in effect get a pay rise. Likely many thousands of staff in the same boat. So a big thank you to everyone for this and apologies to anyone affected by reduced resources / increased national debt payments in the future. But sure, we're alright Jack.


----------



## tomdublin (1 Jul 2022)

FFG are panicking about losing the next election to SF and are throwing around money in an attempt to save their skin.  Much of that spending goes to lobby groups, half-baked social initiatives, self-serving quangos or is soaked up by bureaucracy.


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## odyssey06 (1 Jul 2022)

tomdublin said:


> FFG are panicking about losing the next election to SF and are throwing around money in an attempt to save their skin.  Much of that spending goes to lobby groups, half-baked social initiatives, self-serving quangos or is soaked up by bureaucracy.


And you're never going to be able to out bribe \ out spend the parties of the magical money tree, losing game to get into.


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## Sophrosyne (1 Jul 2022)

cremeegg said:


> Possibly not the best example of what I was trying to illustrate, which ws that the problems in the health system go beyond how hard people work or how efficient the processes are.
> 
> Preventative health care, treatment at the lowest appropriate level, giving people the treatment they need rather than the treatment they expect. There are many other more general example of improved approaches that could transform the health service more effectively than staff working longer or faster.


I appreciate what you are getting at, but my main point is that we shouldn’t have to guess.

Spend and outruns should be based on verifiable facts.

As the saying goes, “In God we trust! Everyone else must bring their data”.

For instance, a review by health economists at RCSI University of Medicine and Health Sciences and University College Cork and published in BMC Health Economics Review, shows that Health surveys in Ireland are not capturing enough information about patients’ use and cost of health services and the economic consequences of disease.

These surveys are carried out in the absence of an electronic medical records system, which would provide the kind of information you mention.


----------



## Purple (2 Jul 2022)

@Sophrosyne, the old maxim that if you can’t measure it you can’t manage it still holds true.


----------



## joe sod (2 Jul 2022)

cremeegg said:


> I worked briefly many years ago in one of the Universities. The University employed teams of maintenance staff and grounds keepers. Each group had their own uniforms. The restrictive practices were a joke. Two guys came to paint my small office one day, set up ladders dust covers etc. disappeared for a week, came back and finished the job in 2 hours. I understand they did nixers in the time they were allocated to my office.
> 
> The university never challenged this directly, they simply brought in outside contractors and paid them a contract price. They bought off the existing staff with pay rises and generous redundancy packages. Today the University employees very few maintenance staff and those are on revised contracts.


Those guys are still in the hospitals though, I know of one hospital that employs their own grounds keepers but still need a private contractor to come in every week and do the "heavy work", . Of course those permanent jobs are allocated by nepotism not ability, one guys wife is a senior administrator


----------



## tomdublin (2 Jul 2022)

odyssey06 said:


> And you're never going to be able to out bribe \ out spend the parties of the magical money tree, losing game to get into.


SF's magic money theme also risks backfiring since (hopefully) most voters are smart enough to know that the government has limited means to combat inflation.  If I was SF I'd just keep talking about the housing crisis where FFG are responsible for one of the biggest policy failures in post-war Western Europe.  On that count alone FFG deserve enteral political damnation.


----------



## Brendan Burgess (2 Jul 2022)

They must not have read my article. The irresponsibility continues. 









						Spending rules to be paused as Coalition plans big additional budget spend
					

Welfare increases and tax changes to significantly exceed planned €1.5bn




					www.irishtimes.com


----------



## Sophrosyne (3 Jul 2022)

@Protocol the papers you quoted in post #63 and #64 contain the views and opinions of the _authors _and not necessarily the official views of the IFAC as is stated in the annotations.


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## Purple (4 Jul 2022)

tomdublin said:


> the housing crisis where FFG are responsible for one of the biggest policy failures in post-war Western Europe. On that count alone FFG deserve enteral political damnation.


Why do you think that? Have you absolutely no idea what's going on in most of the rest of the developed world?


----------



## NoRegretsCoyote (4 Jul 2022)

Brendan Burgess said:


> They must not have read my article. The irresponsibility continues.


But look at how good the numbers are. January-April tax receipts were roaring ahead:



> Tax revenues of €3.9 billion were collected in April, up by €0.9 billion, or 28 per cent on April 2021 (figure 2A), with the bulk of the increase driven by income tax receipts. Total tax receipts for the year to date now stand at €21.1 billion, *which is €5 billion or 31 per cent higher than the same period in 2021.*



Spending was well down on last year with expenditure in line with plans:



> Total gross voted expenditure to end-April amounted to €25.3 billion, which was €1.4 billion or *5 per cent below the same period in 2021 and €0.1 billion, or 0.4 per cent, below profile.*




Fiscal numbers for the first half of the year will be published today or tomorrow. Let's see what they say.


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## tomdublin (4 Jul 2022)

Purple said:


> Why do you think that? Have you absolutely no idea what's going on in most of the rest of the developed world?


The cost of renting in Dublin in relation to incomes is vastly higher than in almost any other comparable city accross the developed world.  I don't understand why there are still those who are trying to sugarcoat it.


----------



## Purple (4 Jul 2022)

tomdublin said:


> The cost of renting in Dublin in relation to incomes is vastly higher than in almost any other comparable city accross the developed world.  I don't understand why there are still those who are trying to sugarcoat it.


There are plenty of more expensive cites, especially when adjusted for purchasing power parity.
For example our per capita income, PPP adjusted, is $69,190. In Spain it's $42,250. Rent in Milan is about 30% lower in Milan. Therefore as a percentage of the average income, PPP adjusted, rents here are lower.

Things certainly aren't good here but anyone who thinks this is mainly down to government policies in the last 10 years is an idiot. The government certainly hasn't helped and HAPS is probably the main problem that is within their control but government policy isn't the main driver and no government policy can fix it in the short to medium term. Our housing problems are problems of success. People want to come here to work and live because it's a great country. Should we go back to the crazy left wing FF led governments of the 80's and end up with 50,000 people leaving each year?


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## tomdublin (4 Jul 2022)

Purple said:


> who thinks this is mainly down to government policies in the last 10 years is an idiot.


The government isn't even picking the low-hanging fruit.  There are tens of  thousands of unauthorized Airbnbs that could be pushed into the long-term rental sector but aren't.  There is rampant dereliction & vacancy even in prime city locations and again nothing done about it.  Same story with crazy HAP rents which crowd non-social welfare recipients out of the market and create perverse incentives for people not to seek work.  Why is all this happening? Because the government's priority is to drive up property prices no matter how horrifying the social cost.


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## Purple (4 Jul 2022)

tomdublin said:


> Why is all this happening? Because the government's only priority is to drive up property prices no matter how horrifying the social cost .


Why is that their only priority? Please please don't come back with some crazy Shinner-bot conspiracy theory.


tomdublin said:


> There are thousands of unauthorized Airbnbs in Dublin which could be forced into the long-term rental sector but aren't.


How many thousand and how could they force them into the long-term rental sector?


tomdublin said:


> There is incredible dereliction & vacancy even in prime city locations and again nothing done about it.


Dereliction rates have dropped in recent years but without a meaningful property tax there's not much that can be done about it and people are against higher property taxes, in fact the opposition want to abolish them (because they are populists, not socialists). 


tomdublin said:


> Same story with crazy HAP rents which crowd non-social welfare recipients out of the market.


I agree. That is certainly one way in which the government has made things worse but the political lobby groups pretending to be homeless charities keep pushing for more of the same and our pseudo-left wing media champion their cause. 


tomdublin said:


> Why is all this happening?


Because of the last crash, quantitative easing which has resulted in a massive increase in money supply, low bond rates which have cause a huge flow of capital into property, inept Public Servants and structures who can't get projects through, a totally inept construction sector which is grossly inefficient. We live in a democracy where the State has limited power and the government of the day is constrained by laws and precedent and can't rule by dictate. Yes, there's more they could do and there's certainly things they could do better but blaming them for the whole mess is silly and ill-though out.


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## tomdublin (4 Jul 2022)

It's not crazy Shinner conspiracy theory to argue that vested interests influence government policy and that a preponderance of influential vested interests wants high rather than low property prices.  Regarding Airbnb, enforceable prohibition of short-term lets coupled with severe vacant property penalties would push most Airbnbs into the regular rental sector.  I agree with your other points regarding construction sector inefficiency, bureaucratic incompetence & counterproductive social justice lobby groups.  Sanctimonious media doesn't help either which simply doesn't question why someone who contributes nothing to society deserves 2000 euro HAP monthly while many full-time workers spend half their salary sharing mouldy bedrooms with strangers.


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## Purple (4 Jul 2022)

tomdublin said:


> It's not crazy Shinner conspiracy theory to argue that vested interests influence government policy and that a preponderance of influential vested interests wants high rather than low property prices.


The primary goal of any government is to stay in office. Sorting out the housing shortage would keep any government in office. Why would they not do it?

House prices and rent are vastly higher than they were a decade in most of the developed world. The primary driver of that is a massive increase in the money supply. That's not something that any Irish government can control.


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## tomdublin (4 Jul 2022)

Purple said:


> Sorting out the housing shortage would keep any government in office. Why would they not do it?


Two main reasons:
1) More voters own property than are looking to buy or rent and politicians generally bet on voter selfishness (though that is changing as even middle class offspring are forced to emigrate for lack of housing).
2) To make a significant dent in the housing crisis Dublin requires thousands of 10-15 storey apartment blocks like they exist in cities across Europe.  Counting on voter selfishness politicians are scared of nimby backlashes.  This is aggravated by a constituency-based electoral system that makes them vulnerable to local pressure groups & lack of social shame felt by those pressure groups.  Moreover, the electoral cycle is shorter than the planning & construction cycle, thus promoting short-termism.


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## Purple (4 Jul 2022)

tomdublin said:


> Two main reasons:
> 1) More voters own property than are looking to buy or rent and politicians generally bet on voter selfishness (though that bet might not pay off this time as even middle class offspring are forced to emigrate for lack of housing).
> 2) To make a significant dent in the housing crisis Dublin requires thousands of 10-15 storey apartment blocks like they exist in cities across Europe.  Counting on voter selfishness, politicians are scared of nimby backlashes, aggravated by the constituency-based electoral system that makes them vulnerable to local pressure groups.  Moreover, the electoral cycle is shorter than the planning & construction cycle, promoting short-termism rather than medium-term planning.


So why have the government introduced legislation to make it harder to object to planning applications as well as fast tracking the process?
We have plenty of space for medium density developments that don't require 10-15 stories but I do agree that we need far more apartments than houses. 
Unfortunately the construction sector is even more incompetent and inefficient than the State and so they are unable to build them at a price the market will bear. They blame increasing costs of materials and labour but in the US 30% of what is delivered to a construction site ends up in Landfill. Given that the US is generally much more efficient than us that statistic is probably higher here. Construction is one of the most inefficient industries in the world. In the United States, where, since 1945, productivity in manufacturing, retail, and agriculture has grown by as much as 1,500 percent, productivity in construction has barely increased at all (). I can't see us being any better. In fact I'd bet that we are considerably worse if the laughably inept practices I see on construction sites are anything to by. 

The bottom line is that builders are really really bad at their job and pass on that incompetence in cost to the consumer. Rather than addressing their own ineptitude they whinge and moan like little girls about costs going up. It's very hard for the government to fix that.


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## tomdublin (4 Jul 2022)

Purple said:


> Unfortunately the construction sector is even more incompetent and inefficient than the State and so they are unable to build them at a price the market will bear


If the government really wanted to circumvent this they could bring in foreign contractors & work crews from places like Turkey and China (which in turn would be a wake-up call to their Irish counterparts).  Other countries (esp. In the Middle East) have a lot of their infrastructure built that way.


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## Purple (4 Jul 2022)

tomdublin said:


> If the government really wanted to circumvent this they could bring in foreign contractors & work crews from places like Turkey and China (which in turn would be a wake-up call to their Irish counterparts).  Other countries (esp. In the Middle East) have a lot of their infrastructure built that way.


No they couldn't. That's just ridiculous. 

They could buy factory built homes from the mainland, the USA or even the UK but that would require a change in existing building standards and the unionised staff in the Department of the Environment couldn't be bothered doing that. Okay, in fairness, they probably don't have the skills or resources to do it either, just on the off chance they could be bothered.


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## tomdublin (4 Jul 2022)

Purple said:


> No they couldn't. That's just ridiculous.
> 
> They could buy factory built homes from the mainland, the USA or even the UK but that would require a change in existing building standards and the unionised staff in the Department of the Environment couldn't be bothered doing that. Okay, in fairness, they probably don't have the skills or resources to do it either, just on the off chance they could be bothered.


I agree but that just illustrates my point.  If the government & bureaucracy *really* wanted to drastically boost housing supply they could but they just don't want to.  Where there's a will strong enough it can conquer any amount of resistance & incompetence.


----------



## Purple (4 Jul 2022)

tomdublin said:


> I agree but that just illustrates my point.  If the government & bureaucracy *really* wanted to drastically boost housing supply they could but they just don't want to.  Where there's a will strong enough it can conquer any amount of resistance & incompetence.


Not in a democracy.


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## Sophrosyne (4 Jul 2022)

Summer Economic Statement 2022 is now available on gov.ie


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## NoRegretsCoyote (4 Jul 2022)

Corporation tax receipts for the month of June were a record-breaking €3.6bn. There was been €9bn taken to date this year, basically 50% up on last year. Total take could be over €20bn this year for the full year. This is basically three times the 2015 number of nearly €7bn which was itself very high and at the time everyone assumed it was down to the decision of a certain fruit company to locate its IP in Ireland. 

Seamus Coffey has a good thread on it here.

So if someone can tell me what "sustainable" revenues are please let me know - I haven't a clue any more!


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## lff12 (7 Jul 2022)

tomdublin said:


> FFG are panicking about losing the next election to SF and are throwing around money in an attempt to save their skin.  Much of that spending goes to lobby groups, half-baked social initiatives, self-serving quangos or is soaked up by bureaucracy.


Whereas in SF's regime it will simply be gifted instead to "community organisations" who are effective affiliates (as it currently does in the north).


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## lff12 (7 Jul 2022)

tomdublin said:


> The cost of renting in Dublin in relation to incomes is vastly higher than in almost any other comparable city accross the developed world.  I don't understand why there are still those who are trying to sugarcoat it.


Ahem

"1 bed apartment" which is really a studio, 497m2 in Earls Court  - £1,950 pcm

1 bed artisans dwelling D8 https://www.daft.ie/for-rent/house-15-ring-terrace-inchicore-dublin-8/3966884 €1710pcm

Dublin is not much different from any other major capital city - try renting in Stockholm, for example.


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## lff12 (7 Jul 2022)

Purple said:


> No they couldn't. That's just ridiculous.
> 
> They could buy factory built homes from the mainland, the USA or even the UK but that would require a change in existing building standards and the unionised staff in the Department of the Environment couldn't be bothered doing that. Okay, in fairness, they probably don't have the skills or resources to do it either, just on the off chance they could be bothered.


They could even relax those standards so that similar builds to past builds of the so called "golden age of housing" (to quote Prof Michelle Norris) but no, the Oirish Times would get everso upset at the orrore of the audacity of allowing the peasants to buy and live in 1 bed apartments smaller than 45m2 (despite this being perfectly normal in capital cities everywhere else). Its 3 bed semi Ds for everyone OR ELSE we go to the high court!


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## lff12 (7 Jul 2022)

tomdublin said:


> The government isn't even picking the low-hanging fruit.  There are tens of  thousands of unauthorized Airbnbs that could be pushed into the long-term rental sector but aren't.  There is rampant dereliction & vacancy even in prime city locations and again nothing done about it.  Same story with crazy HAP rents which crowd non-social welfare recipients out of the market and create perverse incentives for people not to seek work.  Why is all this happening? Because the government's priority is to drive up property prices no matter how horrifying the social cost.


as of April 2020 there was 7500 Airbnb rental units in Dublin - however that includes units that would not be lettable as units under current PRTB rules, apartments that might only be available for a short periods while otherwise in use, individual rooms - how many apartments are actually fully let all of the year as AirBnb is unknown.
That said, its certainly a major issue - but how liveable these units are is open to debate. Its believed for example, that many unlettable bedsits that were put out of use in 2008 due to the bedsit ban are now let under AirBnb where no such restrictions exist.


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## tomdublin (7 Jul 2022)

lff12 said:


> Ahem
> 
> "1 bed apartment" which is really a studio, 497m2 in Earls Court  - £1,950 pcm
> 
> ...


London is not a comparable city (it's appropriately ten times larger than Dublin).  Check cities like Vienna, Brussels and Helsinki where you can rent a 1 bedroom apartment for a few hundred a month.


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## tomdublin (7 Jul 2022)

lff12 said:


> as of April 2020 there was 7500 Airbnb rental units in Dublin - however that includes units that would not be lettable as units under current PRTB rules, apartments that might only be available for a short periods while otherwise in use, individual rooms - how many apartments are actually fully let all of the year as AirBnb is unknown.
> That said, its certainly a major issue - but how liveable these units are is open to debate. Its believed for example, that many unlettable bedsits that were put out of use in 2008 due to the bedsit ban are now let under AirBnb where no such restrictions exist.


It's admittedly anecdotal, but where I live in Dublin (inner suburb around ten mins walk from the city centre) there are dozens of cottages and apartments exclusively for Airbnb use.   Everyone knows where they are and they are all unauthorized.  Local residents association keeps reporting them to Dublin City Council but nothing ever seems to happen.  There is simply no will to enforce this.


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## Purple (8 Jul 2022)

tomdublin said:


> London is not a comparable city (it's appropriately ten times larger than Dublin).  Check cities like Vienna, Brussels and Helsinki where you can rent a 1 bedroom apartment for a few hundred a month.


Average after tax wages are significantly lower in Austria (about 25% lower). Apartments in Vienna are more expensive to buy. 
Helsinki is cheaper but their after tax income is about 10% lower than ours. 
While we under tax low to middle income earners and don't really tax wealth at all and while we have high rates of underemployment we'll always struggle to provide the sort of public housing infrastructure that we want. 
10% of our working aged population is in receipt of a disability benefit. That's indicative of a population that sees that they can get, not that they should do. While that's the case we'll always have problems.


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## arbitron (8 Jul 2022)

Purple said:


> 10% of our working aged population is in receipt of a disability benefit. That's indicative of a population that sees that they can get, not that they should do.


Is 10% actually high? What % should it be and what is the target % based on?


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## Cantillon (8 Jul 2022)

See slide 23 of Barra Roantree's Barrington lecture on income inequality:



			https://www.esri.ie/sites/default/files/media/file-uploads/2020-01/Slides_1.pdf
		



For some reason, we have really high rates of disability among working-age adults.



IGEES have studied the flows onto DA:


			https://igees.gov.ie/wp-content/uploads/2019/01/An-analysis-of-Disability-Allowance-inflows-and-outflows.pdf


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## Purple (8 Jul 2022)

Cantillon said:


> See slide 23 of Barra Roantree's Barrington lecture on income inequality:
> 
> 
> 
> ...


Great data.
Slide 26 shows that we are the most Socialist country in the EU.


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## tomdublin (8 Jul 2022)

Cantillon said:


> For some reason, we have really high rates of disability among working-age adults


Maybe because in other countries they check


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## Purple (8 Jul 2022)

tomdublin said:


> Maybe because in other countries they check


Our institutions of State don't work as well as they should. In some cased that's due to under funding due to the misallocation of resources elsewhere, but we live in a very socialist country where we treat the symptom of inequality with welfare without really addressing the complex and multifaceted root causes. I'm a big fan of identifying and dealing with root causes.


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## tomdublin (8 Jul 2022)

The root cause is that Ireland is one of the most class ridden societies in the Western world.  Take university attendance rates - under 10% in some Dublin postal codes and 98% in others.  Even people's accents are tied to their social class. This is compounded by a rentier & entitlement mentality that extends across all social classes but has class-dependent outcomes.  Being on social welfare/disability/lone parent benefit is a kind of low-end rentier alternative if your class background prevents you from extracting rents from society by becoming a solicitor, landlord, pharmacist or GP.


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## Sophrosyne (8 Jul 2022)

tomdublin said:


> The root cause is that Ireland is one of the most class ridden societies in the Western world.


???

Ireland’s conundrum is that domestic businesses are too small to employ enough people for wages and salaries sufficient to enable them to be taxpayers and contribute to the exchequer.

Everything else is consequential to that.


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## tomdublin (8 Jul 2022)

Sophrosyne said:


> ???
> 
> Ireland’s conundrum is that domestic businesses are too small to employ enough people for wages and salaries sufficient to enable them to be taxpayers and contribute to the exchequer.
> 
> Everything else is consequential to that.


Before responding with "????" you might want to invest 30 seconds reading the post in  its entirety.


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## Sophrosyne (8 Jul 2022)

I have read your entire post!


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## Paul O Mahoney (9 Jul 2022)

tomdublin said:


> The root cause is that Ireland is one of the most class ridden societies in the Western world.  Take university attendance rates - under 10% in some Dublin postal codes and 98% in others.  Even people's accents are tied to their social class. This is compounded by a rentier & entitlement mentality that extends across all social classes but has class-dependent outcomes.  Being on social welfare/disability/lone parent benefit is a kind of low-end rentier alternative if your class background prevents you from extracting rents from society by becoming a solicitor, landlord, pharmacist or GP.


This is typical " pour me, claptrap " since 1996 third level education has been available to everyone, initially free but now costing €3000 a year.

Multiple courses has been added to the third level curriculum and for all abilities.
Education takes effort especially from the students and it's their families responsibility to help students,  encourage them and explain that having a good education opens up more opportunities. 

My wife is proudly from a 2 up 2 down in Wexford town,  right across from Bride Street Church and she and her 4 siblings all came out of college with 

2 PHDs, 2 Masters , one in public health,  another Qualified Accountant now a Director of Accenture. 

Her mother worked in a local hotel at night and her father worked in the motor factor industry,  and was a member of Labour,  he also sold his car to allow the eldest to have "digs " in  Cork,  (UCC).

You might like posting some statistics from the Nevin institute but the reality is that since 1996 the obstacles to third level education and university has never been easier to jump, and if people don't bother trying to better themselves why should any government or society care about their plight, afterall its self inflicted.


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## tomdublin (9 Jul 2022)

The numbers are what they are.  *Why* they are like that, whether people should try harder, etc. are valid questions but that's a different debate.  The numbers show that there is a sizeable self-reproducing underclass in Ireland and this underpins many problems from unemployment and drug abuse to crime.


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## Sophrosyne (9 Jul 2022)

This paper from the Parliamentary Budget Office discusses the consequences of Ireland’s dual economy - “a global, export-oriented multi-national sector and a more domestically oriented, labour-intensive sector dominated by small and medium-sized enterprise (SMEs).”

In fact, the vast majority of enterprises (92.4%) in Ireland are micro, each employing less than 10 people.

The CSO breakdown of the business demography in Ireland for 2020 is:

* Number of Enterprises by employment size class*

MicroUnder 10257,555​92.4%​Small10-1910,981​3.9%​Small20-496,439​2.3%​Medium50-2493,221​1.2%​Large250 and over666​0.2%​

No matter what metric is used, multi-national businesses outperform domestic businesses even where they operate in the same economic sector.

“Before the pandemic, multi-national companies were already a key driver of tax receipts.

In 2019, multinational companies were responsible for:

27% of all employment
45% of all income tax receipts, and
were liable to pay 79% of corporation Tax.
The pandemic increased the divide between multi-nationals and SMEs.

In 2020 multinational companies accounted for:

32% of employment
49% of employment taxes and
82% of corporation taxes.
Whereas corporation tax payments from SMEs were down 40% in 2020.”

Although there is concentration on Corporation Tax receipts, multi-nationals also accounted for 49% of PAYE receipts.

The paper goes on to explain the difficulties facing SMEs*.*

“A key challenge is boosting innovation and productivity levels. Overall, the World Economic Forum’s index of international competitiveness sees Ireland ranked 24 out of 141 countries.

Denmark, Finland and New Zealand, similar countries to Ireland, were some of the top performing economies. This is the competitiveness context the Irish SMEs are operating against, both a vibrant multi-national sector in Ireland and a very competitive international environment.

*This is important as an OECD report finds that Irish SMEs are not very active in international markets, and SME productivity growth is stagnant.

There are weaknesses in SME management skills, capital investment levels and technology adoption. Access to finance and skills shortage are also issues.”*


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## Paul O Mahoney (9 Jul 2022)

tomdublin said:


> The numbers are what they are.  *Why* they are like that, whether people should try harder, etc. are valid questions but that's a different debate.  The numbers show that there is a sizeable self-reproducing underclass in Ireland and this underpins many problems from unemployment and drug abuse to crime.


Yes but they like the rest of us have the "choice " to either live like you described above or try and get an education and better yourself. 

There are very few " barriers " for anyone to get out of the mire in Ireland,  in fact I know of one teacher who teaches in Neilstown and every year his hope is that the class from the previous year come back.......sadly it never happens


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## Paul O Mahoney (9 Jul 2022)

Sophrosyne said:


> This paper from the Parliamentary Budget Office discusses the consequences of Ireland’s dual economy - “a global, export-oriented multi-national sector and a more domestically oriented, labour-intensive sector dominated by small and medium-sized enterprise (SMEs).”
> 
> In fact, the vast majority of enterprises (92.4%) in Ireland are micro, each employing less than 10 people.
> 
> ...


The final two paragraphs are important but has anyone here ever tried to fill out an Enterprise Ireland grant application? It's so difficult many say " **** that" and try and raise funds elsewhere. 

We need to start giving proper seed capital to young companies earlier than the entrepreneurs " remortgage their parents or their own home.


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## Sophrosyne (9 Jul 2022)

The OECD report was commissioned by Heather Humphries in 2018, so she, at least, understood the global challenges facing Ireland’s SMEs and the risk associated with the imbalance in the Irish economy.

She subsequently set up an SME Task Force. This is its , which contains a series of key deliverables and recommendations.

A table of the recommendations is on page 48 to end.


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## tomdublin (9 Jul 2022)

Paul O Mahoney said:


> There are very few " barriers " for anyone to get out of the mire in Ireland,


Formal barriers you are correct but it's a cultural problem.  There are families where nobody has been working for generations, parent(s) on various drugs, crap nutrition, no books, no intellectual stimulation, no parental expectations or aspirations, not even a laptop, etc etc.  Some kids manage to break out of that but it's very few.  Most middle class kids by contrast make it to university no mattter how thick they are.


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## Sophrosyne (9 Jul 2022)

tomdublin said:


> Formal barriers you are correct but it's a cultural problem. There are families where nobody has been working for generations, parent(s) on various drugs, crap nutrition, no books, no intellectual stimulation, no parental expectations or aspirations, not even a laptop, etc etc. Some kids manage to break out of that but it's very few. Most middle class kids by contrast make it to university no mattter how thick they are.


None of that is unique to Ireland, but it is not the "root cause" of our economic difficulties.


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## Paul O Mahoney (9 Jul 2022)

tomdublin said:


> Formal barriers you are correct but it's a cultural problem.  There are families where nobody has been working for generations, parent(s) on various drugs, crap nutrition, no books, no intellectual stimulation, no parental expectations or aspirations, not even a laptop, etc etc.  Some kids manage to break out of that but it's very few.  Most middle class kids by contrast make it to university no mattter how thick they are.


Well you're not getting into university if your "thick" ,you appear to have a chip on your shoulder about university entrance or are you trying to say something else.

The other stuff is not the responsibility of the state or society, everything is available to those who are willing to make the effort.

These people who live like you describe deserve nothing extra, and I mean nothing, and they certainly aren't equal to anyone who has made a better life for themselves and families.

And history and the present, is littered with people who despite the challenges rose up and bettered themselves some are even billionaires.

Its time for the cohort you describe to be treated as what they have become a burden on society,  Government and the well being of honest people, whose tax money is spent on these people and they themselves are struggling, where's the help for a family with 2 working and bringing in €1000 or less a week, with a mortgage,  childcare?

Those with little ambition or social responsibility will still have houses, and money every week.

And finally I'm not saying that all people with difficulties to be cast aside, but the state has multiple agencies to help those, if they are willing, but the state cannot do everything either.

And I'll guarantee you this, if those people showed willingness to change their lives and in somes cases desperate situations the entire country would rally around and support them ,but the first step is their's.


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## tomdublin (9 Jul 2022)

Paul O Mahoney said:


> These people who live like you describe deserve nothing extra,


Does that also apply to their young children?


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## Sophrosyne (9 Jul 2022)

Paul O Mahoney said:


> but has anyone here ever tried to fill out an Enterprise Ireland grant application? It's so difficult many say " **** that" and try and raise funds elsewhere.


But if it means receiving valuable grant assistance, why would you not take the trouble or hire an accountant that specializes in the field? You have to start as you mean to go on and not fall at the first hurdle.

It appears that there are circa 80 different grants available. A business might qualify for several if it positioned itself properly. There are also grants available from the EU.


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## Paul O Mahoney (9 Jul 2022)

tomdublin said:


> Does that also apply to their young children?


That's their decision and I don't want to see children suffer for the mistakes of their parents.

However,  if the State intervened to help the welfare of those children could you imagine the outcry, Joe Duffy would be handling thousands of calls a minute, no matter who you are , what background you come from, no matter your problems you must love your children and do the best for them and them only.

The second a child is born,  you become second and that's a lifetime,  usually yours and if you can't do that someone else should. And having children should not be an economic decision or a means to get a house, or or or........

And I know a lot of single parents who go to work every day not for themselves but for their children and those children's future. 

I fear we have gone off topic.


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## Purple (9 Jul 2022)

Sophrosyne said:


> *There are weaknesses in SME management skills, capital investment levels and technology adoption. Access to finance and skills shortage are also issues.”*


That’s very true. Irish companies are very bad at sweating capital. Even our tech start up’s are usually looking for a quick sale and exit for the founders. 
We don’t have the capital investment levels of the Germans or the VC culture of the Americans. 
I don’t accept that these issues are the root cause of our under employment levels. I think that has more to do with a post colonial mindset and an extremely generous welfare system that enabled such a mindset. It’s also a post catholic thing; we spent so long trying to be good Christian’s that we never managed to learn to be good citizens.


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## Sophrosyne (9 Jul 2022)

It is about increasing productivity, increasing exports, increasing skills and knowledge, embracing digital technology and low carbon and the steps we take to achieve it.

The economy is essentially about exchequer in/exchequer out.

What we take in taxes determines our spending.

At present, we are over-reliant on multi-nationals for our tax take.

Subtract them and we are reliant on indigenous enterprises, which are mostly micro.

How do we increase the tax take of indigenous enterprises to anything like the same level as multi-nationals

It’s not about anything else.

We have to ditch the past and concentrate on the present and the future.


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## Paul O Mahoney (9 Jul 2022)

Purple said:


> That’s very true. Irish companies are very bad at sweating capital. Even our tech start up’s are usually looking for a quick sale and exit for the founders.
> We don’t have the capital investment levels of the Germans or the VC culture of the Americans.
> I don’t accept that these issues are the root cause of our under employment levels. I think that has more to do with a post colonial mindset and an extremely generous welfare system that enabled such a mindset. It’s also a post catholic thing; we spent so long trying to be good Christian’s that we never managed to learn to be good citizens.


And don't forget begrudgers who will talk about behind your back and clap your back down the pub, hoping to get a free pint. 

If we could find a cure for that we'd be some country.


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## Sophrosyne (9 Jul 2022)

Paul O Mahoney said:


> And don't forget begrudgers who will talk about behind your back and clap your back down the pub, hoping to get a free pint.
> 
> If we could find a cure for that we'd be some country.


How so?


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## Paul O Mahoney (9 Jul 2022)

Sophrosyne said:


> How so?


Because it's the real crisis in this country,  try and get on and the begrudgers will try and take the legs from beneath you.

It's the Irish way....its like the book" The begrudgers guide to Irelands politics"....Find it and read it,  if not PM me and I'll post it .


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## Sophrosyne (9 Jul 2022)

If I am a successful business person, do you think I give a fiddlers about begrudges?

That is just a distraction that has nothing to do with the risks facing the Irish economy.


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## Paul O Mahoney (9 Jul 2022)

Sophrosyne said:


> If I am a successful business person, do you think I give a fiddlers about begrudges?
> 
> That is just a distraction that has nothing to do with the risks facing the Irish economy.


Congratulations if you are, but I doubt very much that you haven't encountered it.

The Irish economy and the risks facing it aren't to do with begrudgers alone,  but they are a factor,  like a multitude of other non economic issues.

And as an open economy with full exposure to the economic winds from Europe and the US theres very little that can be done to when those winds howl


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## Paul O Mahoney (10 Jul 2022)

The pandemic isnt over and will cause trouble for our economy too especially on the spending side.


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