Dermot Desmond Speech on the Irish economy

[Bronte]

For the life of me I can't find the post or thread I wrote on this subject.

At the suggestion of AAM here is an article where it is mentioned

[broken link removed]

One sentence of the speech was mentioned also in yesterday's Sunday Independant in the middle of an article.

It was given at this event [broken link removed] but on there I can't find the speech either.

Until it's clear that the document is not copywrited I won't post it up here.

 

[Brendan Burgess]

Hi Bronte

Whether or not it is copyrighted, you are entitled to quote selectively from it. So why not do so and/or summarise the main points?

Brendan

 

[DB74]

Here's an edited version of the speech

[broken link removed]

 

[Complainer]

Ah, the classic 'blame the regulator/civil servants/everyone else' approach.

It's a little bit hard to take Dermot's attempts to divert the blame too seriously, given the role of his right hand man Dr Michael Walsh (CEO of the firm that manages Dermot's many investments, IIU) as Chairman of Irish Nationwide, the small building society that has cost the state €8 billion. Does this outweigh the €250 million investments by Dermot over the past decade?

 

[Firefly]

Ah, the classic 'blame the regulator/civil servants/everyone else' approach.

It's a little bit hard to take Dermot's attempts to divert the blame too seriously, given the role of his right hand man Dr Michael Walsh (CEO of the firm that manages Dermot's many investments, IIU) as Chairman of Irish Nationwide, the small building society that has cost the state €8 billion. Does this outweigh the €250 million investments by Dermot over the past decade?

That's well pointed out and highlights an element of the much talked-about "golden" circle at the top. He focuses his attention on the senior Civil Servants, who are probably in this circle too!

 

[Brendan Burgess]

Hi Complainer

For the past eight years I have challenged the behaviour of the Irish Nationwide. It has always been a mystery to me what a good guy like Michael Walsh was doing as chairman. It was a bad decision of his to go on the board. It was a bad decision to accept the job as chairman. The Society has cost us all a lot of money.

However, Michael Walsh, in my opinion, is still a very talented person. He has shown that in his other achievements through IIU. I know it would be very difficult for some people to accept that, given his highest profile role - that of Chairman of Irish Nationwide.

Likewise, I think that the attack on Dermot Desmond by association is not valid. He was the prime mover behind the IFSC which we should all be grateful for. He has invested in many other companies in Ireland and elsewhere. I am sure that he has made errors along the way, but he is the type of person we need in this country and we should listen to his views. We don't have to agree with them, but we should play the ball and not the man. We certainly should not play the man by association.

It seems to me that Ireland faces a choice between a moderate tax economy with a competitive social welfare and public sector, versus an economy with high taxes and generous social and public packages.

That is as good a summary of it as I have seen. We were able to afford low taxes and generous social welfare when we had lots of money. We don't have that any more and we can't afford it. We are fooling ourselves if we think we can.

The standard response to failure is to move the senior civil servant on to another parish. I have over the past 18 months written to various government departments with suggestions and, in most cases, I haven’t even got an acknowledgement.

I don't agree with public sector bashing, but if this is true, it is a bad reflection on the people to whom he has wrtten. I am surprised though that he wrote to government departments, as I thought he would have gone straight to the ministers.

Talented people of whatever background and belief should be involved in fixing the problems. The era of Civil War politics, passed on as a family business across generations, must be laid to rest.

This is something which I also agree with. There is no difference between FF and FG. There is very little difference between them and Labour. The quality of the people elected in all three parties is poor. Having said that, all parties have some good people and we need to combine them with a few outsiders to try to get the country out of the present difficulties.

Brendan

 

[bullworth]

There is no difference between FF and FG. There is very little difference between them and Labour. The quality of the people elected in all three parties is poor. Having said that, all parties have some good people and we need to combine them with a few outsiders to try to get the country out of the present difficulties.

Brendan

The most important difference between FF and FG/Labour is when we gave FG/Labour a chance they left a healthy economy behind them but when we gave FF over a decade of power they destroyed us and not for the first time. A common perception of FF is they are more power hungry than FG/Labour and this leads to corruption and bad decisions not in our national interest in order to hold onto the reins of power.

 

[Complainer]

In relation to Michael Walsh, I've little doubt that he is a very talented person. That makes his role in presiding over the organisation that has cost the State €8 billion (i.e. €2k for every man/woman/child in the country) all the more mysterious. He cannot claim ignorance, as the problems at Irish Nationwide were clearly called out to him at repeated AGMs. He has never come out and apologised to INBS members or to taxpayers that are footing the bill for his failure. He has never returned his Chairman's fees, which while not material in the INBS scenario, would demonstrate some principles.

In relation to Dermot Desmond, I’ve little doubt that he too is very talented. I’m not so sure about him being the original inspiration behind the IFSC. Didn’t I read somewhere that Con Power (also late of Irish Nationwide, funnily enough) claims credit for coming up with the idea when he worked at Dept of An Taoiseach?

I really don’t think I ‘played the man’ in this case. I’m attacking the lack of balance in the article. It is just a bit rich for Desmond to lash out at the public sector, when there is no mention of the role of Walsh/Fingleton/Fitzpatrick and all their cronies at AIB and BOI. I’m frequently reminded of the commentator in RTE’s Freefall programme who expressed the view that the senior bankers were either liars or fools, given what they told the Govt at the time of the guarantee.

Desmond’s comment about “a choice between a moderate tax economy with a competitive social welfare and public sector, versus an economy with high taxes and generous social and public packages.” is a bit of an oversimplification. For a start, it ignores the tax reliefs that cost us one-fifth of the total tax take – at least €11.4 billion, and that’s not even the full figure – see http://www.rte.ie/news/2010/1130/revenue.html. It ignores the essential public services that many people rely on. It ignores the evidence about the many millionaires that pay little or no tax. His proposal that “The State must ensure that it deploys its resources in line with the needs of a modern knowledge based economy” forgets that we are a society first, and an economy second. The economy is there to serve and facilitate society. His demands for “fundamental political and constitutional reform of the State” conveniently ignore the need to reform the banking system and our whole business environment, to make sure we never end up paying the price for greedy speculators again.

You also seem to be missing the important difference between FF/FG and Labour – the bank guarantee. Labour voted against the guarantee, and would not have signed up to the blanket guarantee. We would not be beholden to the IMF moneylenders if Labour had been in power.

 

[T McGibney]

For a start, it ignores the tax reliefs that cost us one-fifth of the total tax take – at least €11.4 billion, and that’s not even the full figure – see http://www.rte.ie/news/2010/1130/revenue.html.

I'm surprised to see this particular myth being trotted out once again so soon after it was dismissed so decisively in last Wednesday's National Recovery Plan, page 95.

6.6 General Tax Expenditures
In the same way as there are unrealistic expectations about what pension tax expenditures can contribute to budgetary correction there is a poor understanding of the scale of tax expenditures/incentives generally. Commentators often conflate tax expenditures in general with property based tax expenditures in particular and with those elements of revenue foregone that are the fabric of the income tax system.

There is frequent reference to the OECD proposition that by 2005 the cost of “tax expenditures” had become larger than the remaining income tax receipts. The figure published by the OECD put the value of tax expenditures at €11.49 billion. An analysis of these figures shows that:

80% or €9.72 billion of all the tax expenditures relate to personal allowances/credits/bands, pensions and savings;

Of the remainder, ‘interest relief’ at €350 million and some portion of the €980 million for "social schemes" (urban/rural renewal etc) relate to property; and

This leaves a balance of approximately €440 million in miscellaneous tax expenditures/incentives on the basis of the OECD estimate.

Most public commentary on this issue either misunderstands or ignores how these “expenditures” are broken down. Indeed, the Commission on Taxation did not regard a very large part of these costs to be tax expenditures, but rather part of the fabric of the income tax system (bands, allowances, personal credits)

 

[Brendan Burgess]

Complainer

Your primary attack on Desmond is that he is a colleague of Michael Walsh.

I think that is unfair. I have no problem with you disagreeing with the arguments, but you used his association with someone else to dismiss his arguments.

That is playing the man.

Brendan

 

[Purple]

It's strange to hear the IMF referred to as the money lender when they are giving us a much better interest rate than our "friends" in the EU and unlike those friends they aren't trying to blackmail us into destroying our corporation tax base.

 

[Complainer]

I'm surprised to see this particular myth being trotted out once again so soon after it was dismissed so decisively in last Wednesday's National Recovery Plan, page 95.

FF Government document supports FF policies - now there's a shocker.

Your primary attack on Desmond is that he is a colleague of Michael Walsh.

Not true - my primary attack was the lack of balance in his article, and his piling of all blame on the public sector, while he fails to look much closer to home to blame the individual who presided over Irish Nationwide while it ran up a bill for the State of €8 billion.

Do you think that Desmond's claim that "there is little depth and quality at the senior departmental levels" was 'playing the man' at all?

Funnily enough, the SBPost report of his speech does show just a little more balance than the IT version, as it mentions that "Desmond described it as a ‘‘cardinal sin’’ that bankers who had lent money to developers were allowed to ‘‘slink away’’."

I wonder if he had Michael Walsh in mind as a banker who 'slinked away'?

 

[T McGibney]

FF Government document supports FF policies - now there's a shocker.

Sorry, I didn't realise this discussion was a party political debate.

The Recovery Plan made the following statements of fact...

80% or €9.72 billion of all the tax expenditures relate to personal allowances/credits/bands, pensions and savings;

The Commission on Taxation did not regard a very large part of these costs to be tax expenditures, but rather part of the fabric of the income tax system (bands, allowances, personal credits)

...both of which flatly contradict your earlier statement

For a start, it ignores the tax reliefs that cost us one-fifth of the total tax take – at least €11.4 billion

 

[Bronte]

You also seem to be missing the important difference between FF/FG and Labour – the bank guarantee. Labour voted against the guarantee, and would not have signed up to the blanket guarantee. We would not be beholden to the IMF moneylenders if Labour had been in power.

How do you know that they would not have signed? I see no difference between all 3 parties.

Also as you've brought it up (again). Do you see anything at all wrong with the civil service, nothing, that's right. It's the fault of their political masters. We got it a long time ago. So just leave it out. Please.

Also, (to everybodyu) why are we talking about Irish Nationwide. The speech is about where this country is at, where it should be, where one of our most important and successful businessmen think we are at and where we should be. Whether he is right or wrong, let's debate that.