28 thoughts on “NERI Q Reports”

  1. One of the most cynical documents to clog up the inbox. The main conclusions are please leave our egregious public sector rents alone and make the tax system even more progressive I.e tax someone else other than us.

  2. Again this emphasis on increasing tax take rather then on monetary sovereignty which is a general characteristic of these leftist pamphlets.

    Denmark is both sovergin (kind of anyhow) and is a oil surplus country – it can increase taxes without cutting into the bone of peoples life support or savings.
    Most of our debt is external – a increase in tax continues to insure that we service these debt holders with interest.
    The reason why we have a lack of domestic demand is the leaking of money outside of this country to pay interest on a overly valued currency & on such things as oil / gas and stuff.
    Who knows these people who don’t pay tax perhaps reside in the Caribbean and need us to continue to make sacrifices withen the euro to sustain their input heavy lifestyle.
    Also there is a lack of integration withen this economy – people who make Skoda cars live further east then the workers of Ellesmere port.


    There is a reason why Vauxhall cars are one of the if not thee top car brand in Northern Ireland…. its something to do with fiscal and monetary integration.
    Given the energy density is dropping withen Europe you cannot hope to bring such distant and culturally different parts of Europe together.

    It was perhaps possible a few years ago when aviation Kerosene was cheap and plentiful…… now not so much.
    We need to relocalise down to the national level again.

  3. PS. – any effort to stimulate this economy via a resourse input heavy completion of the road programme will gift Denmark and other oil surplus countries more money.
    Its best to do something a bit more labour intensive such as rebuilding the New Ross to Waterford railway , Perhaps buying some more high quality steel rails from Tata to relay the Waterford to Rosslare route and setting up a community rail project around these 2 lines using now unused 2700s DMUs.

    We must not make the same mistakes the Northern Ireland execitive has made with the expenditure of £100 million + on the Larne road project despite falling traffic when previously growing towns such as Crumlin & Aldergrove airport were left without rail access for relatively tiny amounts of money when compared to the resourse heavy (Diesel) movement of materials that characterises such big road projects.

  4. Some tax increases would be both revenue- and efficiency-enhancing. For example, restricting the capital gains tax exemption for the principal private residence would bring in a lot of money, would not distort labour markets, and be a worthwhile anti-property addiction reform for its own sake.

  5. Something rather dramatic is happening in Italy.


    Diesel use is a signal of commercial activity , construction etc…….
    From the IEA June Report
    Total “Oil demand in Italy fell even more sharply , down a staggering 14.9 % in April to 1.2mbd as the dire economic backdrop quelled consumption”

    Also Spain & Greece experienced YoY drops of 7.8% & 16.5% !! respectively

  6. You can clearly see this divergence of Gasoline to Diesel demand in France where there is major multiple construction projects ongoing.
    Where Gasoline demand is down 11.8 % in April YoY while diesel demand is down just 0.3%

    For example the truely massive Tours Bordeaux LGV project seems to be getting into gear.

    While gasoline consumption will be further reduced by the Brest tramway , Orleans line B , and Rouen higher capacity tram replacement in June alone.


  7. These reports were flagged up on the Progressive Economy blog – which seems to b the natural home for stuff like this – under the heading “Invest and do not further harm”.

    As usual it seems to be back to front and upside down. It should be “First do some good to counter-act the inevitable harm that the necessary fiscal adjustment is inflicting and then use these good efforts to free up the resources that will lead to investment”.

    But the progressive-left needn’t worry. With Labour in government – and FG having painted itself in to a corner in the run-up to last year’s election to ensure that Labour would enter in to coalition with them – the structural reforms which would do some good won’t happen as fear of the trades unions has compelled the goverment -in the interests of ‘industrial peace’ – to whittle down to almost nothing of any use the initially inadequate programme the Troika sought to impose.

    The vast majority of citizens will continue to suffer, but many in the public sector, most of the semi-states, the trades unions with a strong involvement in these sectors, and the various rent-seekers and monopoly profit gougers in the private sheltered sectors are hell-bent on returning to the ‘business-as-usual’ of the double bubble era.

    How long will it take before these long-suffering citizens wake up and realise that it these people, shedding crocodile tears for the unemployed and low-paid, who are part of the residual problem that needs to be resolved – and whose behaviour is delaying recovery? And when will the Government realise that it was elected to govern in the interests of the majority who are suffering – and not in the interests of those hell-bent on retaining their largely undeserved bubble era gains?

  8. One of the challenges in debating economic policy currently in Ireland let alone Europe is to question the ‘There is no other option’ than austerity. Usually this means austerity for some more than others. Not infrequently people talk at cross purposes while one voice is focussed on public sector efficiency and reform while another if focussed on the damaging effects of continuing fiscal austerity and the implications for unemployment and domestic demand while another still is preoccupied with deficits and debt (usually public). Yes all these issues are inter-related. However, read the report and explain what a better approach might be if one does not agree with staying at European norms of public spending. I take the point about improving the quality of this spending and reforming the way public services are delivered and held to account. We bought into a low-tax, low-spend and light touch regulation model and it has ruined us. Then clumsily socialised private debt to the ruin of reputation and borrowing position. And we continue to suck the life blood out of domestic economy. I would have thought that the burden of evidence is against the prevailing practice and cosy consensus?

  9. Ineptocracy all over again. We cannot spend any more because Ireland is overspent. So taxes must be increased / levied on those who are considered to be wealthy, even if they don’t live in Ireland.

    That way the spending can continue, so that workers in other countries are kept in employment as the Irish spend more.

    The report is full of contradictions, a recommendation to move towards the European norm with regard to spending and taxation.

    Hang on a minute…. its not just Ireland which has run up huge debts, its the majority of Europe, with the exception of Germany of course.

    Obviously the authors of this report don’t realise that Europe is just as bankrupt as Ireland.

    I like the comment about taxing the super rich, and those who don’t live in Ireland, but may have an Irish passport. They must be made to pay more tax even if they never set foot in Ireland.

    Perhaps the authors should have a look at Mr Ronan Lyons site and see the excellent analysis he has produced on the HIGHLY PROGRESSIVE taxation in Ireland. But as I have commented before, to a begrudger Highly Progressive taxation is never progressive nor high enough.

    Good to see the old chessnut of the exiles coming up, these 6000 individuals who have had to leave the country to find work and of which only about 400 of them are actually worth talking about in monetary terms. Yes this group must be highly taxed so that others can continue to spend.

    All hail the God of Spending and ineptocracy because this will save us!!

  10. @Sporthog

    Europe has debts while having a government revenue a significantly higher proportion of GNP than Ireland (even adjusting for GNP/GDP) and even higher spending in some cases. Whatever about taxing people with Irish passports, a government with a large deficit should surely seek to raise a similar proportion of national income as revenue as other neighbouring states.

  11. The continued postponement of projections for economic recovery and fiscal stability ought to give rise to some plurality in the discussion on economic policy. The IMF has joined the EU Commisson and others in projecting a higher deficit for 2012 than in 2008, when ‘austerity’ began – to say nothing of all the misery in between.

    NERI provides a welcome antidote to the prescription of bleeding the patient some more.

    It is also very welcome in its somewhat innovative inclusion of data for both economies in Ireland. Surely the interaction between them justifies development of analysis which tries to incorporate that. The latest unemployment rate jumped 0.6% in NI whereas in Britain it is reported to have fallen by 0.2%.

    It might be interesting, for example, to analyse the income distribution of GVA in both economies over time, as well as the causes of their growth, or lack thereof. We might be better equipped to deal with the current Depression as a result.

  12. @Michael Burke

    ‘NERI provides a welcome antidote to the prescription of bleeding the patient some more.

    It is also very welcome in its somewhat innovative inclusion of data for both economies in Ireland. Surely the interaction between them justifies development of analysis which tries to incorporate that.’



    Keep up the work. There are altenatives …

  13. The first one of these reports “Spring Quarterly Economic Observer” I got my hands on, was a work in progress with conclusions drawn everywhere and blanks left for some secretary or other could fill in the blanks i.e. find some thing that backs this up sort of thing. It is in the same building as the nest of vipers at the top of Parnell Square called the ICTU they all go in the same door and they are no more independent in their analysis than I am.

  14. @ Paul Hunt

    “The structural reforms which would do some good won’t happen as fear of the trades unions has compelled the goverment -in the interests of ‘industrial peace’ – to whittle down to almost nothing of any use the initially inadequate programme the Troika sought to impose.”

    It’s amazing how quickly the useless Troika were taken over and willingly fooled by our lot is it not? They are all in this together staying at the best hotels while they work out where the next cut can be applied that will not effect them. If they fix the perpetual euro crisis, which they won’t, they can only do so by imposing even more fiscal fascism but the more fiscal fascism they impose the less democracy and the more hatred people have for the Euro and even EU. The game of chicken will end with a collapse of some bond auction or other.

    It will inevitably explode especially with Merkel telling them, we are not falling for this, Eurobonds, mutualisation of debt “not in my lifetime” anyone that cares to look beyond the false comfort zone of a PS salary will see were this is heading. I agree with Merkel by the way, I don’t buy this Colm McCarthy story of “what the rich Germans did to poor Paddy”. I don’t see why Germans should have to pay for David Begg’s and Jack O’Connors public sector salaries or any of those salaries for that matter.

  15. @ Robert Browne

    If you have such a ‘work in progress’ why not circulate it?

    Of course no such ‘work in progress’ exists as it is simply not the way proper research is conducted.

  16. PS
    It now appears that some or all of Rouens 28 old TFS trams are to scrapped.
    Could the Irish goverment do something useful and buy these vehicles for use off peak ( a few € million perhaps) in order to peserve the life of the present LUAS tram fleet ?
    I suspect these TFSs have another 10 years of life in them (a buses lifetime really)


  17. @ Rory O’Farrell

    I don’t make things up.

    I don’t know how close you are to the document but I can guarantee you that I can stand over what I am saying. I can root root down to the bottom of a pile of documents to produce the offending “research” in progress. Maybe I will release them to Vincent Browne that will be much more rewarding and revealing.

  18. DOD,
    There are always Options but loading more taxes on an over burdened private sector and more debt on future generations to pay the elevated salaries of a chaotically run public sector is not the best if them.

  19. @ Robert Browne

    No such document exists as it is not how the research was conducted.

  20. @Robert the document was prepared by the staff of the NERI. We are responsible for the content of the document and the results. We are happy to discuss the research with anyone. It is the case that we are located at ICTU HQ and our website makes it very clear that we are supported by the trade unions. it also explains how we operate and are organised.

  21. @ Dearg Doom,

    So you are aiming at the CT rate then?

    Why not expand on your theory, there are over 7 million people in the UK who claim Irish roots / connections etc.

    How about we send them income tax demands to pay for the services that those resident in Ireland obtain. How fair is that?

  22. If we are to have European norms of taxation and public spending will this mean European norms of public pay and efficiency? I am a public servant and I don’t want that nor do I imagine do many of the academic contributors to this site.

    Also, have NERI factored in the ‘weak urban structure’ in Ireland which means that public expenditure is always going to be more inefficient than in other countries? Just think of all the one or two teacher national schools around the country or, for example, the 5 general hospitals in the Midlands area (Roscommon, Portiuncla (Ballinasloe), Mullingar, Tullamore, and Portlaoise) serving a catchment area of approx. 250,000. If this is taken into account, European norms of spending will still not give us European norms of public services.

  23. Can we ease on the messenger-shooting, please – though we seem to have a good representation of the messengers here – and focus on the message?

    The basic message is: ease off on the fiscal adjustment, raid the NPRF and any NTMA cash balances to fund ‘investment’, supplement this with increased taxation and reduction of ‘tax expenditures and, if bribery of Irish pension funds fails to get them rushing to finance this ‘investment’, raid them as well.

    It looks like the proverbial curate’s egg, but, unlike an egg, it’s not a product of nature blind to its effects. It is cunningly and carefully constructed. I happen to agree that using sticks to drive refrom in the public sector doesn’t make sense. It would make far more sense to seek to maximise the quality and efficiency of service delivery for the bucks being spent. The tax base will have to be broadened and the tax system re-focused, but this must be accompanied by a re-balancing of the powers of the Oireachtas and government. Charges are required to recover the cost of services currently provided by local government from general taxation, but this has to be accompanied by a restoration of effective local governance.

    But that doesn’t blind me to the disingenuous, dishonesty and hypocrisy of this message. All the focus is on ‘new investment’ to boost economic activity and to create jobs, but there is never any assessment of the current level and financing of public and semi-state investment, of how and where it is allocated, or of the publicly available projections of future levels of investment and how and where it will be allocated. The basic rhetoric is that privatisation is wrong always and everywhere. But there is no recognition that pension and insurance funds, long-term, rate investors and infrastructure funds are demanding a new class of asset that would provide them with a solid assurance of investment recovery and an appropriate risk-related rate of return, because so many sovereign bonds are off limits.

    The amount of equity tied up unproductively and inefficienctly in the semi-states is simply criminal, when restructuring, re-financing and privatisation would signifcantly lower the cost of service provision and generate funds for genuinely productive investment.

    The result is that, in advancing this message, the so-called progressives can have it both ways. They know full well that Labour will never consent to the meaningful structural reforms that they really fear – and that FG is even more fearful of upsetting Labour’s special interests and its own. But it gives them freedom to exorciate the Government for sticking to the fiscal adjustment programme.

    The effect is to boost the hard left and SF and to destroy Labour’s electoral support. Will enough of the new Labour TDs who will be chicked out at the next election revolt? It is extremely unlikley, but it is fascinating to watch Ireland’s oldest political party strive might and main to protect the special interests it considers to be in its constituency – and the harder it tries the more its electoral support leaches away – encouraged by reports of this nature.

  24. @Bunbury

    Why do you not want European levels of efficiency? I don’t see why academic contributors should not want European levels of efficiency as Ireland’s universities are already somewhat above European levels of efficiency.
    The paper compared government spending as percentage of national income, not particular levels for individuals. The proper things of course is for public salaries to be similar to private ones, with all things considered.

  25. @ Tom Healy

    Thanks for your frankness!

    @ Rory O’Farrell

    “No such document exists as it is not how the research was conducted.”

    Is that so? This is very infantile sort of approach believe me I don’t spend too much time on reading this kind of stuff but it does exist.

    Page 35 “The following paragraphs relating to Northern Ireland need a complete re-write and re-constructing to fit with the flow of section 4 and following the style used for the republic above. Lots of surgery needed to compress text but also include possibly new funding sources where possible – business rates? Also need to make a general statement about reversing westminister imposed austerity in the future – an appeal to our colleagues across the water.”

    On the previous page 5 lines down, “can we stand over this and cite specific resources”

    Just wondering did I dream this up or am I reading too many economic texts?

  26. It’s five years since the music should have stopped at Ireland’s ecstasy party. It has devastatingly for some but the status quo remains intact and another two years on the fiscal consolidation program would even slow the baby-steps towards reality that have been made.

    Besides, the existing growth targets to 2015 will not be met. So stretching out the agony could lead it into a new decade after one of no hope.

    Of course there could have been room for stimulus or ‘investment’ spending if the descent to reality had been matched by not only political courage but a national spirit of a commitment to fairness. There is none.

    However, what is sickening are proposals from the NTMA, ministers and indirectly from academics in respect of huge debt writedowns across Europe, that decimated private pension funds be put more at more risk while lavish unfunded pensions are off-limits from reform for existing staff.

    On domestic spending, there is a reality that has yet to be addressed.

    The costs of running the country are too high while headline export figures give the illusion of progress at least at some level. However, Microsoft can add €2bn to its Irish revenue while cutting its payroll and paying less tax.

    Dave Thomas of the Association of Higher Civil and Public Servants, said last March that “average public sector pay will always come out ahead of the private sector due to the skilled, highly professional nature of the work involved and the qualifications that are required to perform it.” Is this true or a relic of past times when ‘our Johnny’ was lucky to get a big job in the civil service in Dublin?

    Evidence from countries such as Germany, UK, and Finland suggests that there is no imbalance in skills today that would warrant a big premium in public pay, according to IMK, the German institute. In 2010, average hourly pay rates (including social security costs paid by private sector employers) in Germany were €29 per hour in both public and private sectors; Finland’s rate was also €29 in both sectors and the UK was €20 per hour in the private sector and €21 per hour in the public sector. The average hourly labour costs were €28 for the Irish private sector and €34 for the Irish public sector.

    Then there is the role of the State as the cash cow for many private sector professional groups while the private individual is often the sucker.

    If we did remove the scrounging and gouging, we could maybe make a case to Brussels for support for the cost (plus the cost of dependents) for the typically 75,000-80,000 foreign national adults that have been on the Live Register in recent years.

    I do believe in trade unions and their decline in the US has coincided with multi-decade stagnant wages. In Ireland, mainly because of a reliance on FDI, the traditional trade unions have ended up as protectors of the privileged (including those on lower pay with permanent guaranteed jobs and pensions compared with private sector counterparts).

    So we have this multi-year farce of likely a group of men meeting day after day to discuss work procedures and there is no external input from an individual who has experience of a well-run modern public service.

    Then voilà, ‘savings’ are conjured up compared with outrageous bubble-time levels.

    Even on the issue of skills and helping the unemployed, who could really have confidence that a new body would be run better than the discredited FÁS?

    We do have stimulus already; the deficit including a State science budget of €2.3bn; farm subsidies at €1.8bn and so on.

    This is from the Department of Finance’s Stability Programme Update, April 2012:

    While taxation receipts in 2012 are projected to be just above 2004 levels, the gross voted expenditure of Government Departments and Offices in 2012, at an estimated €56 billon, is projected to be 37% above the level it was in 2004, despite the very significant adjustments to both revenues and expenditure since mid-2008. While the gap between the State’s revenues and expenditure is clearly on a downward trajectory, it remains at an elevated level and it will need to continue to be addressed by economic and fiscal policy over the coming years.

    The current estimate of the Exchequer deficit or EBR for 2012 is €18.7 billion, almost exactly in line with the Budget 2012 estimate, notwithstanding some compositional changes.

  27. In the case of the Republic of Ireland, the choice made in the last decade had been for low levels of spending, low levels of revenue (as % of GDP) and a very cautious approach to debt and deficit financing – up to 2008. Ireland was the poster child for fiscal rectitude up to that year.

    This is a ridiculous statement. Praise for Bertie and Charlie?

    The spending was low relative to bubble windfalls? At a tax level of about €100,000 per new house, there was quite a windfall in 2006 from 93,000 units.

    If McCreevy was prudent what does that make the Finns with their current surplus in public funds of more than 50% of GDP?

    Is GDP used because it suits?

  28. @Michael Hennigan

    Upper-echelon insider_inbred gougering governance pre-crash = Upper-echelon insider-inbred gougering governance post-crash up to today


    They have proved themselves to be incredibly resilient in getting away with it – and unbelievable as it sounds, most continue to profit from the detritus that they created. Who is blind?

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