As an economic historian, I want to make life easier for my future colleagues of some decades hence. In that spirit, here are links to someprimarysources that make interesting reading even today.
Kevin, You really must stop teasing us with these posts that force us to click through to see what’s up. Some of us are trying (with difficulty) to maintain a life outside the crisis.
Actually, I saw what you were up to without clicking through. And you’ve missed the best one: “The [Irish] financial system seems well placed to absorb the impact of a downturn in either house prices or growth more generally.” (IMF, 2006). What were they thinking?
The World Bank assessors would have been more jaundiced than the more technocratic IMF (inclined to believe accounting numbers and to rely on simplistic stress-testing methodologies) — but they are not asked for the opinions on “Mature Financial Systems”
I liked “House prices are seen as somewhat overvalued by staff, becoming somewhat overvalued byCBI officials, and in line with fundamentals
by DOF officials.” Those were the days.
From the 2006 link : “…Ireland’s financial sector soundness indicators are generally strong and that the major lenders have adequate buffers to cover a range of shocks.”
Is it at all likely that despite the failure of the French proposal we might see some sort of EU cooperation that would avert any IMF situations?
The Taoiseach told the Dail on Tuesday that the Government would save €1.4 billion on the public service pay bill, “the great bulk of which will be achieved through a new pension-related payment to be made by all public servants, including employees of local authorities, with a small element of the total to be secured through reductions in travelling and subsistence rates and other savings.” http://debates.oireachtas.ie/DDebate.aspx?F=DAL20090203.xml&Node=H8#H8
The ready-reckoner supplied by the Department of Finance suggests a very much lower level of net savings to the Exchequer. For example a HEO on €51,980 would pay a pension contribution of 7.60% but the net amount would be €2,092 (ie. 4.02%). If this was the average rate of net contribution, the net saving on the €20Bn. public sector pay bil would be €804M., less than 60% of the savings which the Government is seeking (and I think the HEO’s contribution would be somewhat above average for the public sector).
On discrepancies in estimates of savings….
Some part (but probably not all) of the discrepancy between the government’s estimate of €1.4bn savings from the levy, and various posters’ calculations might be explicable by looking at the phrase ‘to be made by all public servants *including employees of local authorities*”. It seems that this latter element of public service pay is not included in the oft-quoted figure of €20bn total exchequer pay and pensions, because legalistically speaking, it’s not a direct exchequer charge.
So for example, the (net) total (current and capital ) expenditure in Vote 25 for Environment Heritage and Local Government is €3,183m but of that, only €110m is counted as contributing to the total exchequer pay and pensions bill of €20bn.
In this case that €110m is mainly the salaries etc. of civil servants in the govt department itself and presumably doesn’t count the salaries etc. in local government which are in effect paid for from grants through this vote (and also funded by motor tax receipts).
Some of the gory details are in the Revised Estimates Volume at:
I think at one point the Taoiseach specifically mentioned that estimated savings would be fed into the specification of the grants levels to local authorities.
Something similar may well arise in other cases where the government makes block grants through the estimates process but which in effect cover mainly salaries and pensions. The HEA block grant to universities may be a case in point. But this doesn’t appear to be consistently accounted for (e.g. such costs in Forfas and the IDA etc. do appear to count towards the €20bn total).
In any event, the above I think underlines the earlier comments critiquing the thoroughness and explicitness (or lack thereof) of various presentations of the fiscal strategy (if such it can be called). I guess many contributors could point to a policy literature on stabilisations which would argue the importance of accurate, and comprehensible economic data in helping to establishing credibility for government plans. Our government is missing some tricks on this, and I think remedying this would comprise an importance, if unglamorous, part of the fiscal institutions reform agenda for the medium term.
This was a very interesting link. It brought to mind an issue I encounter regularly. That being, where is the most thorough and comprehensive source for historical economic data for Ireland? CSO national accounts series are split into pre and post 95. Which organisation has made the most comprehensive efforts to combine these series?
@Patrick: What can I say, it must be my pedagogical instincts at work.
I must say I found the 2003 report very interesting, and maybe there are interesting questions to be asked about the contrast between that report and later ones.
@Kevin: that is a very nice quote. I would have liked to be a fly on the wall for that conversation.
7 replies on “Historical source material”
Kevin, You really must stop teasing us with these posts that force us to click through to see what’s up. Some of us are trying (with difficulty) to maintain a life outside the crisis.
Actually, I saw what you were up to without clicking through. And you’ve missed the best one: “The [Irish] financial system seems well placed to absorb the impact of a downturn in either house prices or growth more generally.” (IMF, 2006). What were they thinking?
The World Bank assessors would have been more jaundiced than the more technocratic IMF (inclined to believe accounting numbers and to rely on simplistic stress-testing methodologies) — but they are not asked for the opinions on “Mature Financial Systems”
I liked “House prices are seen as somewhat overvalued by staff, becoming somewhat overvalued byCBI officials, and in line with fundamentals
by DOF officials.” Those were the days.
From the 2006 link : “…Ireland’s financial sector soundness indicators are generally strong and that the major lenders have adequate buffers to cover a range of shocks.”
Is it at all likely that despite the failure of the French proposal we might see some sort of EU cooperation that would avert any IMF situations?
The Taoiseach told the Dail on Tuesday that the Government would save €1.4 billion on the public service pay bill, “the great bulk of which will be achieved through a new pension-related payment to be made by all public servants, including employees of local authorities, with a small element of the total to be secured through reductions in travelling and subsistence rates and other savings.”
http://debates.oireachtas.ie/DDebate.aspx?F=DAL20090203.xml&Node=H8#H8
The ready-reckoner supplied by the Department of Finance suggests a very much lower level of net savings to the Exchequer. For example a HEO on €51,980 would pay a pension contribution of 7.60% but the net amount would be €2,092 (ie. 4.02%). If this was the average rate of net contribution, the net saving on the €20Bn. public sector pay bil would be €804M., less than 60% of the savings which the Government is seeking (and I think the HEO’s contribution would be somewhat above average for the public sector).
On discrepancies in estimates of savings….
Some part (but probably not all) of the discrepancy between the government’s estimate of €1.4bn savings from the levy, and various posters’ calculations might be explicable by looking at the phrase ‘to be made by all public servants *including employees of local authorities*”. It seems that this latter element of public service pay is not included in the oft-quoted figure of €20bn total exchequer pay and pensions, because legalistically speaking, it’s not a direct exchequer charge.
So for example, the (net) total (current and capital ) expenditure in Vote 25 for Environment Heritage and Local Government is €3,183m but of that, only €110m is counted as contributing to the total exchequer pay and pensions bill of €20bn.
In this case that €110m is mainly the salaries etc. of civil servants in the govt department itself and presumably doesn’t count the salaries etc. in local government which are in effect paid for from grants through this vote (and also funded by motor tax receipts).
Some of the gory details are in the Revised Estimates Volume at:
http://www.finance.gov.ie/viewdoc.asp?DocID=5190&CatID=13&StartDate=1+January+2009&m=f
I think at one point the Taoiseach specifically mentioned that estimated savings would be fed into the specification of the grants levels to local authorities.
Something similar may well arise in other cases where the government makes block grants through the estimates process but which in effect cover mainly salaries and pensions. The HEA block grant to universities may be a case in point. But this doesn’t appear to be consistently accounted for (e.g. such costs in Forfas and the IDA etc. do appear to count towards the €20bn total).
In any event, the above I think underlines the earlier comments critiquing the thoroughness and explicitness (or lack thereof) of various presentations of the fiscal strategy (if such it can be called). I guess many contributors could point to a policy literature on stabilisations which would argue the importance of accurate, and comprehensible economic data in helping to establishing credibility for government plans. Our government is missing some tricks on this, and I think remedying this would comprise an importance, if unglamorous, part of the fiscal institutions reform agenda for the medium term.
This was a very interesting link. It brought to mind an issue I encounter regularly. That being, where is the most thorough and comprehensive source for historical economic data for Ireland? CSO national accounts series are split into pre and post 95. Which organisation has made the most comprehensive efforts to combine these series?
@Patrick: What can I say, it must be my pedagogical instincts at work.
I must say I found the 2003 report very interesting, and maybe there are interesting questions to be asked about the contrast between that report and later ones.
@Kevin: that is a very nice quote. I would have liked to be a fly on the wall for that conversation.