Broad tax bases are desirable

I notice that there is no election thread, which makes sense given that we were probably all fed up with the campaign before it even began. And I’ve nothing original to say on the subject either. But there probably should be an election thread, and if there is to be one, someone has to kick it off by saying something. So, in that spirit: do we all agree that (a) the Irish economy is now recovering, and doesn’t need further stimulus right now; (b) that the Irish economy has proved itself over previous decades to be unusually volatile; (c) that the international outlook right now suggests that there are risks on the horizon; (d) that the Eurozone is a very dangerous place to be anyway, if you are a small country; (e) that broad tax bases are preferable to narrow tax bases; and (f) that given all of the above, arguing for the abolition of the USC or water charges (water charges, as opposed to Irish Water) is grossly irresponsible, and should suffice to disqualify a party from being taken seriously as a “safe pair of hands”?

113 replies on “Broad tax bases are desirable”

There are 4 tribes. FG is golf club and comfortable. FF is rural and aspirational but also jealous. Labour is non management PS and on/off progressive. SF is proles. The proles are not happy. Why would they be? Neoliberalism doesn’t allow new social housing other than plámás.SF to take Lab seats and a bit of tinkering elsewhere. Draw.

A criticism often levelled at Keynesian economists is that they are great at calling for stimulus but rarely tell us when it’s time to tighten policy. So kudos to Kevin O’Rourke for this post.

Labour is non-management PS? Is that a joke? You might have noticed that their support is hovering around 7%. That probably has something to do with Brendan Howlin unilaterally abrogating Croke Park in 2013 and then blackmailing the entire PS into a third round of pay cuts, the proceeds of which were then put not to the deficit but to tax cuts.

Meanwhile, here’s Noonan telling us that the “emergency” is over while, of course, leaving in place multiple pieces of FEMPI (three guesses what that E stands for) legislation.

Labour is simply out of step with the times. They thought that following the Tony Blair blueprint (to the extent possible for a minority coalition partner) was the way to go in the 2010s. They failed to notice that times have changed, especially the mood of their electorate.

The good news for them is that they’ll get those ministerial pensions. One suspects this was the only goal all along.

Agreed, except for (d).

My reasoning in the matter is linked to a point that arises from your post that has drawn no comment hitherto viz. the almost daily erosion of the reputation of one MOF in the circle that might be said to matter, the Eurogroup.

The “constraints” aka the “dangers” of euro membership should ensure that most of the irresponsible promises that have been made will not be fulfilled.

Every single party qualifies as irresponsible on Kevin’s criteria. Every single one favours scrapping/diluting USC, or free water or zero property tax. Some favour all of these, along with the restoration of mortgage interest relief, the first-time buyer’s grant and other stunning wheezes. Vote LIP (Least Irresponsible Party).

Portugal as the example not to be followed has entered stage left; a bit late but better late than never.

As to voting LIP, it must surely have been demonstrated by now that the Fools Bargain between Irish politicians and their electorate is impervious to any domestically generated reform movement.

Note in particular page 62 where the language makes clear that the budgetary control measures put in place are largely a sham. The incoming government will be very lucky indeed if it can continue with it. Indeed, the best outcome might be a period of weak or no government with the impetus of the already agreed allocations being allowed to carry the ship of state for a period.

The Irish electorate may, unintentionally, provide it.

Apologies. Page 53.

And the text of the offending circular.

Its porous nature is not the fault of the public servants that drafted it but of the politicians, of all parties, and their electorate, who persist in county/constituency pork barrel politics and cannot imagine, any more than most of the media commenting on their activities, any other approach.

Up Mayo! Or Wexford! Or Limerick! [Insert county of your choice]. Or, as one politician (from Roscommon) put it on the radio some days ago, “four counties and not a mile of motorway in any of them”.


It’s not about examples not to be followed. It’s about what Ireland has done and what it has failed to do. Your beloved neoliberalism is dying. Paying off those bondholders was insane.

Galbraith, like Keynes before him, identified the instability of modern capitalism in terms of the drive to accumulate excessive wealth and the fragile nature of the financial system

By the same volatility logic one would question why it’s a good idea for most households to have one large block of debt with a floating interest rate and linked to an illiquid and cyclical asset.

To say that “arguing for the abolition of the USC or water charges is grossly irresponsible, and should suffice to disqualify a party from being taken seriously” is a statement that itself should not be taken seriously.

The reality is that it all depends on the circumstances.

If the economy is struggling to grow at 1% or so, and only slow progress is being seen in reducing government borrowing and debt, then clearly it would be irresponsible to reduce the tax base.

However, if the economy is growing at 5-6%, tax revenues are pouring in, and government borrowing and debt are falling sharply, then it makes perfect sense to return some of the fruits of economic growth to the taxpayer.

So, which of these scenarios is Ireland currently in?

Clearly, its the latter. Therefore, in present circumstances, tax cuts are perfectly justified and economically sensible. If repeated for the rest of 2016, the January tax returns indicate that Ireland will run a budget surplus this year. Of course, things could change. If the U. States looks like electing a socialist President (Sanders) and its economy slows down as a result, this could adversely affect Ireland. In which case, the assessment given above would need to be revised. But, as of now, tax cuts are totally justifiable.

Once elected a government would say that x or y promise can be deferred in response to a downturn, in the hope that prospects would be brighter later in the cycle — besides most of the current leaderships will be in superannuated bliss from 2021.

No party would want to recognise risks as that could put a doubt on delivering their promises.

Colm McCarthy deals with the Dublin housing crisis today and the fact that there is no credible response to increasing supply, is an example of why politicians have reverted to arguing about tax levels and bribes for voters.

Maybe the broadcast media is different but reading the print media about what is being termed a “boring” election campaign, the media appears to be in a traditional role of a facilitator rather than catalyst.

Education was once seen as a key factor in modernising the economy but the OECD now points to the low skills of much of the workforce. FG/Labour says 50,000 apprenticeships will be added but the business sector will not pay to rescue the worst apprenticeship system in Western Europe. Burton promises €5 per week on the State pension but there is nothing said about one of the lowest private sector pension coverage (40)%) in the developed world and so on…


There might be some merit in what you say if the tax take was adequate, for example, to provide universal health care. Also, if you discussed the nature of the USC as originally, and correctly, conceived by the late Brian Lenihan.

There is neither thought nor justification behind the proposal to abolish it other than electoral calculation which, it seems, is not working.

I disagree with some of that. The overheads on water charges are high enough that it would be far more efficient to scrap them in favour of funding from general taxation. USC has its good points, but it makes the tax system overly complicated. It would be better to scrap it and make personal income tax more USC-like.

On the economy not needing stimulus, it’s true, but it’s also true that the economy is far enough away from full capacity that it should be able to survive policy choices made for other reasons that have a stimulative effect. Many of people on Ireland are seriously overtaxed by any reasonable comparison with other countries. Viewed as an exercise in timing the stimulus associated with starting to tackle that against the economic cycle, it seems like a pretty good time to start.

Overall, I would not cut taxes or increase spending by anything like as much as the political parties plan to do, but within that I think there is still space to reform income tax so as to eliminate USC as a separate component, and scrap water charges within one full term of the Dail.

The thing about media and middle class politicians is that they don’t do context. FG is proceeding on the assumption of BAU. The working classes know it isn’t. FF lost them to SF. Ireland is ill equipped for crisis 2.0 given debt loads and the EZ’s missing crisis equipment. Over to Con for the sports news.

re: Housing Policy, and Colm McCarthy’s “Shiver of Fear” policy.

“The answer is to create a shiver of fear that the sites to the north, south, east and west, currently zoned for agriculture or “amenity”, will shortly be zoned for residential use.”

But there is loads of land already zoned, but it has, very deliberately, been left with no services.
Now, why would anybody in public office, zone land for housing and then decide not to provide services to that land, other than to enrich the existing landowners, and land speculators?

Fundamentally, land rezoning and the provision of serviced land for building, is and has been for decades, utterly manipulated to the point of corruption.

Indeed, property interests need not have any worries about a ‘shiver of fear’ from FG, as evidenced by the reducing of the proposed vacant site levy from 9% (by Alan Kelly) to 3%, and its deferral until 2019.

In addition to the ‘shiver of fear’ of rezoning, lets have a policy of servicing all zoned land, in a staged process, within 3 years of rezoning; and a use it or lose 2 year period following servicing.

From recent polls, it appears that a Fianna Fail / Sinn Fein coalition might be stable. This would combine the wisdom of those who brought us the credit bubble and those who brought us the Troubles.

on (c)

‘The official response to the 2008 crisis was a policy of ‘extend and pretend’, whereby authorities chose to ignore the underlying problem, cover it up, or devise deferral strategies to ‘kick the can down the road’. The assumption was that government spending, lower interest rates, and the supply of liquidity or cash to money markets would create growth. It would also increase inflation to help reduce the level of debt, by decreasing its value.

It was the grifter’s long con, a confidence trick with a potentially large payoff but difficult to pull off. Houses prices and stock markets have risen, but growth, employment, income and investment have barely recovered to pre-crisis levels in most advanced economies. Inflation for the most part remains stubbornly low.
Conscious that the social compact requires growth and prosperity, politicians, irrespective of ideology, are unwilling to openly discuss the real issues. They claim crisis fatigue, arguing that the problems are too far into the future to require immediate action. Fearing electoral oblivion, they have succumbed to populist demands for faux certainty and placebo policies. But in so doing they are merely piling up the problems.

Policymakers interrogate their models and torture data, failing to grasp that ‘many of the things you can count don’t count [while] many of the things you can’t count really count’. The possibility of a historical shift does not inform current thinking.

According to the Sindo the sale of AIB ain’T going to happen this year. Too much volatility. They should bring AIB to the vet to put it down.

Broad tax bases are desirable but Ireland doesn’t do insight driven policy. The style is more Heathrow Airport.

On taxes!

“This is a stark reminder that in Ireland the number of adults in employment is nearly matched by those who are not. Therefore any changes to the income system, such as income tax cuts, will have no direct benefit to half of the adult population”.(Page 3).

“Despite repeated expressions to the contrary, Ireland is a low tax country with low levels of public services. Low personal taxation and social
insurance are contributing to this.” (Page 4).

That’s about it!.

There is a popular expectation that (i) a high level of public services is a right that nobody – apparently – need pay for by way of tax on income (assuming that they do not belong to sectors that assume that there is no need to work at all) and (ii) an equally popular view that paying any income taxes is the equivalent of being caught – unjustly – in the “tax net”.

How this delusional state of affairs has arisen is a long story but the PR system, and the auction politics that flow from it, has clearly played the major role.

Contrary to TASC’s analysis, Ireland is not an especially low tax country. Tax as a percentage of GDP is a poor basis for comparison, because an exceptionally large share of Irish GDP is hard to tax. The norm is for most of GDP to be subject to tax at several different stages – Corporation Tax, personal income tax, social security charges, taxes on consumption etc. For an exceptionally large part of Irish GDP we only get one full bite at the cherry – the Corporation Tax bite on multinationals whose Irish output is hugely disproportionate to their staffing levels. For the rest of GDP, the Irish tax take is pretty typical of European countries.

Just to add that the slice of GDP that cannot yield much tax more than pays its own way in terms of the costs it imposes it imposes on the economy. The output bu multinationals in excess of what can be accounted for by employment is hard to tax but it also makes very little imposition on public spending.

I don’t entirely agree with this
(a) the Irish economy is now recovering, and doesn’t need further stimulus right now;

The recovery is patchy. Amongst the Dublin political/tech/public service/quango/finance elite all is flying. knocking around Dublin 2, you’d hardly think 2008-14 ever happened.
But outside the Pale it’s still quite different and political polarisation is just as alive in rural Ireland as it is in the social (rich and poor ) ghettoes of the capital.

As for the USC: yes it was necessary to end the insanity whereby 40% of earners were paying no income tax at all. Everyone should pay something. But I think the black economy must be massive and we hit Laffer Curve territory several years ago.
There might well be a case to lighten the load and get some income back into the tax net by taking some out.

As for water chargers – Water FrameWork Directive. Abolishing the charges is illegal. They are a European norm and the Irish outrage at paying for water is very childish.


“There might be some merit in what you say if the tax take was adequate, for example, to provide universal health care.”

The Republic of Ireland has a very high level of expenditure on health. In fact, it could be argued ‘too high’, given its population age structure. So what, if part of it is funded by private insurance rather than entirely by general taxation? That might well be a good thing. I find many Southerners view ‘universal health care’ through rose-tinted spectacles. Its not the panacea they think it is. N. Ireland has ‘universal health care’. Its life expectancy is lower than in the Republic of Ireland. Its overall mortality rate, its infant mortality rate and its suicide rate are all higher than in the Republic of Ireland. Scotland also has ‘universal health care’ and it has the worst health stats in Western Europe, with life expectancy 2 years lower than in the Republic of Ireland., even though their culture, climate and lifestyle are very similar. The SLAN surveys of a few years ago showed health levels in the Republic of Ireland to be generally higher than in N. Ireland. There have been numerous cases in recent years of terrible treatment of patients by the NHS (e.g. Staffordshire). An element of choice on users’ part improves most services (transport, education etc). So, why should it be different for health? One of the problems of ‘universal health care’ is that doctors surgeries are full of people with minor illnesses that cure themselves in a few days without medical intervention.

But, the general point is that it is economically sensible and socially just to give taxpayers some of the benefits of economic growth in the form of reducing their tax burden. There is room for legitimate argument, of course, as to which taxes should be reduced. When the economy goes into recession taxpayers are burdened with increased taxes to fund the increased demands on the social welfare system of the large numbers of people who lose their jobs. This is painful, but socially just. So, when the reverse happens and those unemployed start going back into jobs, why shouldn’t taxpayers have their burden reduced, given that demand on the social welfare system will be falling?

@Gregory Connor

“From recent polls, it appears that a Fianna Fail / Sinn Fein coalition might be stable. This would combine the wisdom of those who brought us the credit bubble and those who brought us the Troubles.”

Very unlikely.

(1) They don’t have the numbers.

(2) FF loathe SF (and vice-versa). FF have stated emphatically that they won’t go into coalition with SF (and vice-versa). If FF reneged and went into coalition with SF, the party would split. But, as I say, its academic, as they won’t get close to having the numbers.

Most likely election outcome is FG/FF, or FG/Lab + independents, or FG alone with FF doing a ‘Tallaght’. I’d prefer the first of these.

Regarding your other points:

(1) The credit crisis was a global phenomenon. How exactly did FF cause it? Banks failed in the U. States, U. Kingdom, Spain, Denmark, Germany, France, and umpteen other countries. The idea that Ireland was uniquely badly hit by the credit crisis and the economic recession, that its economy was totally destroyed rather than just being in recession, that it would take decades to recover, and that FF were somehow responsible for this sorry state of affairs, although a fashionable view among the Dublin 4 cognoscenti several years ago, has been blown apart by the growth surge of the past few years.

(2) I have never voted SF (either north or south) and have no time for them at all. I was always totally opposed to their use of violence. But, its inaccurate to say they brought us The Troubles. It was actually the RUC in Derry on 5th October 1968 who brought us The Troubles. I know because I was there.

…(g) that given all of the above, not arguing for the abolition of the USC or water charges (water charges, as opposed to Irish Water) is grossly responsible, and suffices to disqualify an individual from being taken seriously as a “politician”.

Who was it that said:

“You get in on promises and get out on excuses.”?

Last time round it was; burning bondholders, getting tough with the Troika and renegotiating the MoU, while publicly guaranteeing Croke Park.


I advocate the introduction of a system of universal health care, not the equivalent of the NHS, a partial version of which is what we already have, combined with a system of health insurance for those that can afford it, the result being one of the costliest but most dysfunctional health systems, dysfunctional mainly because it is run on the basis of trade union fiefdoms removing the capacity of the management to do their job.

The argument for the introduction of a universal system is one of social justice and equitable treatment. When it comes to choosing the one that provides the best health outcomes, I would probably opt for the French/Belgian model. The outgoing government chose the costliest – the Dutch – and the mainstream political parties collectively, sniffing what they thought was the political wind, including Labour to its shame (and probable electoral detriment), threw their hands in the air and gave up.

Agree that no further stimulus is required. Had we our own central bank we would have raised interest rates by now, which serves to re-emphasise point d.

The question I would have is whether the terms of the fiscal compact would allow the counter-cyclical investment required (under Keynes theory) during an economic downturn?

My understanding of the fiscal compact and the 3% deficit rule would suggest that if GDP decreases so too does the flexibility (or fiscal space if you like) we have to invest in the economy when it is most needed…or am I missing something?

On the face of it all the (main) parties have taken Finance’s medium term forecast as their base, including the Fiscal Space (FS) assumptions. This is predicated on a steady decline in the structural deficit, and as such fiscal policy is contractionary and real spending falls relative to GDP. One could argue that policy is not contractionary enough, of course, but its is not expansionary unless one argues the potential growth assumptions are all nonsense.

Fianna Fail have gone with the €8.6bn FS figure derived by Finance, while both Fine Gael and Labour have assumed that Ireland’s Medium Term Objective (MTO), currently to eliminate the deficit. is relaxed to a new 0.5% deficit target, allowing another €1.5bn in spending. Labour, in addition raise taxes by over a billion to give a FS figure of €11.1bn, the highest. Sinn Fein also plan to raise taxes ,by €1.7bn, and all their space goes on spending, with no net tax reductions.

IFAC have pointed out that the FS figures quoted by Finance made no allowance for any increase in public sector pay in line with inflation or any indexation of social transfers. No doubt the economy will not perform as forecast anyway, but the FS numbers depend on potential growth, as defined by the EC, rather than actual growth. The ‘rules’ may also be changed of course and one notes that France has been in breach of the existing fiscal rules for almost a decade now.

Would it be equitable for commercial tenants to be granted market rents?. Would any soft landing economists have an opinion on this?
We have been massively over-rented for at least 10 years now and locked into commercial leases of 35/25 years long with ratchet rent reviews every five years. The sole reason Ireland had these ruinous leases was because our state signed them.


The expenditure rule does not apply to actual expenditure .The benchmark reference spending figure excludes debt interest, a cyclical unemployment component, any co-financed EU spending and capital spending, although the latter is an average over 4 years.

In a downturn cyclical unemployment spending would rise automatically and is not counted in the benchmark. Also it is the potential growth rate figure that matters . Ireland is currently deemed to be operating well above potential ( i.e. booming, which the Government is coy about) so the structural budget is in deficit- hence the need to keep spending below potential growth in order to eliminate it.


Louise McBride in the Sindo sketches a victims’ charter as if the settlement of 2007 was built on concrete rather than quicksand.

The residential property tax may involve a revaluation of properties in 2019 or more likely not.

It’s always interesting how politicians can promise a few euros on the weekly State pension but get away with saying nothing about the 60% of the private sector that have no occupational pension.

Well said. The recovery is not trickling down. SF benefit. Still so much neg equity. And so many risks.

seafóid – picked up a book last week. Looks like it might be interesting and will explain the ups and downs of rates-of-growth. And why they ain’t acomin’ back!

Gordon, Robert., (2016). “The Rise and Fall of American Growth: the US standard of living since the Civil War”. Princeton University Press.


Wealth and Democracy by Kevin Phillips. He was the strategist who won the old South for the GOP in 1968 . He had a Damascene conversion a while later.

I met Eamon O Cuiv at a debate as Gaeilge last night. Proper local media. Anyway he reckons it will be FG/Shinner.
The FG rep was flogging the more money line.

The party planning the biggest giveaways are FG. However, all promises are based on Dept of Finance projections which have never turned out to be correct.

What I would really like to hear form the parties are:
1) what micro measures and reforms they will bring in to make our state apparatus function better.
2) what their priorities will be if the figures come out differently (which they will).

FF have the most detailed and micro policies.
The Social Democrats are the only party that have eschewed bogus ‘fiscal space’ projections to set out priorities.

I think FF have fought the best campaign to now but that they need to move into the next phase which is to emphasise that they have proven themselves able to take effective action quickly when the ship hits the rocks. They also need to emphasise that FG’s ineptness in many other departments will likely feed into finance now that FG have no more FF policies to implement.

FF made mistakes before but the truth is that the other parties in opposition were clamouring for worse policies to pump the bubble more. It was FF’s plan that FG have followed through well but there is no real FG plan at all beyond trying to buy the election.

It is crystal clear that Michael Noonan thinks a Minister for Finance’s job is to do what he is told by his officials (nothing wrong with that) and then to buy the election (lots wrong with that). I think the Irish people understand that this shows that FG have not learned the lessons of the past.

Lastly, RTE’s and TV3’s ‘banning’ of the phrase ‘fiscal space’ is totally wrong. The concept is critically important as it explains all the promises of spending and cuts as being totally contingent. At the next election lazy journalists will be accusing politicians of breaking promises they did not make because the journalists were too think to explain the concept of fiscal space!

Tax should be more attuned to where the money is. Neoliberalism is all about 1% enrichment. They should bear more tax. Capital sitting on balance sheets doung nothing should be subject to a once off use it or lose it levy. Tax is not utilised in the goal of investment and it should be.

I would emphatically agree with all of Kevin’s points, and would add one: notwithstanding the fact that we are on the upswing of the economic cycle, there are potentially serious blockages emerging in the economy that could constrain its growth potential in the near future – particularly in housing. Therefore, any party claiming to be a safe pair of hands on the economy should be prioritising increasing housing supply (not demand); spending on achieving this is entirely defensible. Other constraints appear to exist in education – particularly higher education – and arguably also in health. These are the kinds of threats to the long-term health of the economy that should be getting attention.

The USC is income tax – haven’t we always been overly reliant on income tax in this country. How is this helping to broaden the tax?

Inheritance tax is where I’d start first on broadening the tax base – the desire in this country to penalise those that have done well through hard work and investment in ones own education is depressing….meanwhile everyone seems content that those who have done little to achieve other than to enjoy an accident of birth should be left to enjoy the fruits of that good fortune unscathed.


FF need 3 elections to recover, according to the dude who is advising them.
I think the DoF projections are very ambitious. The US economy is a complete mess. The Eurozone is deflating . The UK is going nowhere.


Social housing is urgently needed and would boost domestic economy demand as well as employment. There wasn’t one single social house built in Co Galway since 2009.
15000 people in Galway city on the list. The HAP is making things worse.

The Muenchkin
Looking back, the cardinal error committed by the European authorities was the failure in 2008 to clean up their banking system after the collapse of Lehman Brothers. This was the original sin. Many other mistakes subsequently compounded the problem: pro-cyclical fiscal austerity, the ECB’s multiple policy failures and the failure to create a proper banking union. It is interesting that every single one of these decisions was ultimately the result of pressure brought by German policymakers


“I met Eamon O Cuiv at a debate as Gaeilge last night. Proper local media. Anyway he reckons it will be FG/Shinner.”

I’d consider this very unlikely, but not impossible.

It would be suicide for both parties if it came to pass. It wouldn’t last and both parties would be destroyed at the inevitable election later this year. Only 3% of the electorate support this option. Given that, it has its attractions for me. Kill two birds with the one stone. Probably, that’s why it has attractions for Eamon O Cuiv too. But, I doubt FG won’t come to the same conclusion and avoid it like the plague.

I think FF will do better than the polls indicate and SF worse. In the run-up to the 2014 local elections, the polls mostly had SF ahead of FF. But, in the event FF scored 10% more than SF.

Of course, there are 10 days to go and and a lot will depend on:

(a) Following the precedent of last year’s referendum, which party will the Gardai tell people to vote for?

(b) Following the precedent of the last Presidential election, which party will RTE seek to destroy through use of their ‘fake tweet’ stunt?

Given the strength of the economy and the surge in growth, FG ought to be romping home and looking for an overall majority. With a different leader they could have. But, for the past 5 years, in a vain attempt to curry favour with the Dublin 4 liberal and media elites, Enda Kenny has put his anti-Catholic bigotry before everything else. In return, traditional Catholic conservative rural Ireland, the very people who prize economic stability most, have turned their backs on him.

By far the best outcome would be an FG/FF or FF/FG coalition. The reality is that there is going to be a center-right majority in the next Dail. So, there ought to be a center-right government not beholden to one or more of the many crank socialist parties (include Lab and SF in this description).

@Aedin Doris

What about the 350k empty houses that were supposed to have been left behind in 2011 by the outgoing FF government.

Go back to 2011:

The election is fought on the basis that the previous 20 years growth was all a fraud, the result of building hundreds of thousands of new houses surplus to requirements. As a result, every city, town and village had lots of ‘ghost’ estates, with hundreds upon hundreds of houses going abegging. At least, this is what we were told by numerous leading economist.

Fast forward to 2016:

The election is fought on the basis that there is a housing shortage and that this may constrain economic growth.

You couldn’t make it up.

@ Aedin Doris,

Agree, and housing is just one among several issues that affect people’s day to day lives and act as an impediment to their participation in the workforce, contributing to future economic growth, or realising their own personal potential and ambitions. Add in: inadequate childcare infrastructure, poverty trap social welfare regimes, increasing prevalence of ‘occassional worker/staff’ insecure employment contracts across the economy, unequal access to health services, prohibitive costs of participation in higher education to students and their families. There’s a whole agenda of interconnected issues here that fall under the general rubric of ‘social justice’ and about which there has been little or no debate in this election to date.

I agree with Kevin’s points. We have to get the macro-economics right. But a focus on the micro-economics of people’s lives is just as important to securing sustainable economic conditions and economic growth over the long term. It’s not as if the current housing crisis wasn’t predictable. All the signs were there over the past three to four years, and ignored until what Minister for the Environment, Alan Kelly, now describes as ‘the perfect storm’ manifested itself in a crisis. But it’s the very stuff of politics and policy-making to identify risks and signals and take timely action to avert such crises, not just sit around waiting for a ‘perfect storm’ to emerge.

The current GE debate needs to broaden out to encompass the social within the economic strand. Contrary to the view that voters are bought by cheap promises and get the governments they deserve etc., voters are not stupid. They are not irrational in their choices. Such choices reflect the immediate circumstances of their lives and what the conditions they want to see alleviated in the short-term, as well as a calculation of how things might work out for the best over the longer term, i.e. social justice is inseparable from economic sustainability.

@ JohnTheOptimist

The ESRI did an analysis in 2004 (?) or therabouts where it was estimated that there would be no need to build a single housing unit until 2021 if demand had been spread evenly across the country.

The UK and Ireland have dysfunctional housing systems and in the UK since 1955 land prices have risen 15-fold compared with a 5-fold increase in house prices.

Ireland was the only country in the EU28 in 2003-2013 that saw an increase in the number of farms — CAP welfare has made Irish land turnover very low and Irish agricultural land prices are now among the highest in the world — how crazy is that for a food producer?

At some point Irish politicians will have to take on Nimbies and the land interests as land has already become an investment class.

Who will assert the common interest?

@ zhou_enlai

Do idiot voters have any responsibility? FF and their groupies were elected in 1997, 2002 and 2007 and I bet that most of the supporters never gave a thought to their part in the misery inflicted on tens of thousands of their fellow citizens and others! It’s remote of course for a lot of them.

@ Brian Woods Snr.

Japan appears to be back to 2012 with no real benefit from massive bond-buying and Draghi is preparing another flu injection.

Maybe there are headwinds that they cannot counter?

During the boom years, there was not much attention given to when China’s supercharged growth would begin to slow and Robert Gordon highlights the slowdown in technology-related productivity growth.


Census 2011 showed 289451 vacant dwellings in the state, 14.5% of total 1994845.
As the rate of building had slowed dramatically from 2008, it is reasonable to assume a figure of 350,000 in 2008 (2006 being peak completion year).

Further the vacancy rate for houses, as distinct from apartments, had by 2011 dropped significantly, in Dublin (all) , Cork city, Meath, Kildare, to the point that by 2011 it was patently obvious, to anybody that was interested in knowing, that a housing crisis was developing.

See pages 34 and P39 of attached CSO link.,4,The,Roof,over,our,Heads,Full,doc,sig,amended.pdf


You are making a good stab at it!

There are plenty of houses; but in the wrong places, courtesy local jobbery and the failure of planning controls. There are today 180,000 houses for sale on I invite you to check out whatever area you like outside Dublin and its surrounding districts and the larger cities and towns, effectively four or five in number, and compare their number with the level sales achieved, and their prices, on the Sales Register which is now also available on that site.

The figures do not, of course, include half-finished estates and the many houses left vacant by their – emigrated – owners in the hope of a return to better times, not to mention the empty commercial premises in every town and village.

@Sarah Carey

You wrote:

The recovery is patchy. Amongst the Dublin political/tech/public service/quango/finance elite all is flying.

The fact that you, a member of the media echo chamber, actually apparently believe that the public service are “flying” when they are on their knees, says all one needs to know about what’s wrong with this country. Dublin is awash in money but virtually none of it has made it to the public sector who experienced their last pay cut in 2013.


The way the polls are going SF plus Fg would mean no second election

Bad month for OWC with massive job losses in Ballymena and Belfast

@ Veronica, Aedin

Neoliberalism is only interested in the short term. There is no interest whatsoever in future demand or sustainability. It is all about money now.
One third of Americans now work as freelancers without employer sponsored pension coverage. Great for corporate bottom lines but it means the Fed can’t generate 2% inflation or decent growth. The 1% now take home 24% of GDP compared to 9% in 1980. So 1%ers and healthcare now cost almost 50% of GDP.

Galbraith and Keynes both identified the instability of modern capitalism in terms of the drive to accumulate excessive wealth and the fragile nature of the financial system.

We need a new system.

Want to broaden the tax base? Legalise marijuana. The side benefit is the transformation of our city and town centres on weekend nights: people who are stoned generally don’t fight, puke, or make atrocious spectacles of themselves.

Colorado, which taxes it relatively lightly compared to what Ireland might, takes in more from marijuana than it does from alcohol. If Ireland were the first country in Europe to proceed with full, Colorado-style legalisation, we’d also reap a temporary bonus in tourism revenue.

Chances that any Irish gov’t enacts this no-brainer: zero. Especially after the drinks pushers weigh in.

@Michael Hennigan

Those who voted for FF in 2007 can at least look back and say that they weren’t bought by the bubble stoking promises and FG and Labour who wanted to cut stamp duty to keep the property bubble going. However bad things got they could actually have been worse. They can also look back and say that they were right to choose a party who has a record of taking quick and decisive action when things turned bad nationally and internationally.

FF made mistakes which they needed to learn very very important lessons from (and needed to clear out a lot of Ministers for). However, I agree with JtO that they did an awful lot right that stands to us now. FG have certainly not learned from FF’s mistakes and seem to be limited in their imagination to aping FF of 2007.

The big story of this election so far is that Labour’s collapse is such that a vote for Labour is not now a vote for stable Government. FG and Labour won’t come close to a majority. This has to help the Social Democrats and other middle ground independents who have grouped themselves to do business or have previously proven themselves capable of doing business (Healy Raes, Lowry, F. McGrath, Maureen O’Sullivan).

OECD says “Monetary policy cannot work alone. Fiscal policy is now contractionary in many major economies. Structural reform momentum has slowed.”.

All the main parties, with the exception of SF, are talking about income tax reductions. With SF it seems that the reaction is mainly about looking after support their electoral base more than anything else.

Tax allowances such as BES, pensions and health etc. are basically about reducing the income on the wealthier members of society as are other loopholes such as low capital gains tax which allows “business owners” to channel income directly into companies so they can then take the income at a much lower rate than the capital gain. Similarly with non-domicile tax. I would trust any politician to find anyone on less than 25k who actually availed of any of these breaks, expect possibly a small amount of health and pension benefits.

In essence however Income is the one tax we tax we have that is progressive, the more you have the more you pay. Tax allowances, other than ones designed for the lower paid are deeply regressive. VAT, property tax (as least as designed a millionaires mansion in Dublin will pay €1530 and an average three bed semi €495), Car tax, excise, water tax, fines such as parking offences etc., TV licence tax, bin charges, GP visit tax etc. are all by design regressive – the less you have the higher proportion of your income and or wealth you pay. I have listed many items here as tax that some would think as charges but basically they all items that “normal” tax payers have been added to their bill or increased in recent decades and involve a transfer of income to the state or semi-state bodies, or privatised ones which used to be in the public domain such as bin charges. The upward trend of these charges has been constant in the last decades and pursued relentlessly by the current and previous governments. For example a way that people with old cars which were off the road could not pay road tax, they now have to predict when their cars are going to be off the road, very difficult to do or else face a possible fine which is the same for multimillionaire in a Lexus as for an old car.

You could also see ZIRP or NIRP as a way of taxing normal savers, be it for retirement or a house deposit, as a benefit to the uber-rich. A thousand “ordinary” savers club together to give the uber-rich man a loan via the banking system at zero or less so that he can buy a “distressed” company owned by a government owned bank or speculate on a rising bubble in London real estate. In this sense NIRP and ZIRP are tax on normal savers and that sum is transferred as a subsidy to the uber-rich.

There is also a subsidy by the government into their companies by means of Enterprise Ireland Grants and IDA backing and the imputed benefits to these companies by being able to hire graduates at a lower wage because of their low cost education, not saying I disagree with this as it leads to employment but it a subsidy, a negative tax all the same.

In the middle of this we have one progressive tax and a whole range of taxes and near taxes that are by design regressive and all the main political parties have picked on income tax to pin their flag on.
Taking into account the OECD, which up until recently loved austerity, have now changed their tune why can’t they. Low income taxes have not and will not work.

I agree with all of Kevin’s points bar the first. Though I wouldn’t use the term stimulus – which is a surge in public spending with the aim of encouraging growth – I would argue that we need to address public transport and housing and other deficits, including say policing, that have accrued over the course of the crisis in public finance. Here, I agree with Veronica and others. Our growth figures are probably a little flattering given the GDP/GNP anomaly and, given the risks Kevin mentions, unlikely to last anyway. Perhaps Kevin’s stimulus refers to the extra consumer spending which will no doubt flow from the substantial tax cuts promised all round but especially by FG. That kind of ‘stimulus’ is clearly not what we need.

Since this is an election thread, perhaps I’ll be escused for straying more into the political of political economy. Looked at in the round this election is in many ways far more disheartening than that of 2011. Back then the issue was crisis managment. But right now it’s more about what kind of politics and society will hope to look forward to over the next say decade or so. The rapid turn towards aution politics is particularly lamentable. So too is the absence of political reform from the debate. It seems that reform died as the votes were counted last time round. We’ve had token shrinkage in numbers in local and national TDs but little meaningful reform. The senate wasn’t repurposed, the parliament not made more robust, public appointments not tightened sufficiently, and local government, such as it is, not reworked. Our political landscape is still the sad place it always has been. (Another noticable failure was the way the legal profession rebuffed reform).

But if the Irish politician cannot resist the temptation to promise x and y for all an sundry, maybe it’s because this is all we want to hear. Perhaps the Irish electorate, on the whole, is predisposed to this kind of empty rhetoric; compared with some other countries we Irish are not all that civic minded; instead we suffer from a fair degree of self-indugence and are far too wedded to the parish pump.

FG’s message seems to be floundering. SF look like big winners. Renua will be second fiddle to the SDS.

“(a) the Irish economy is now recovering, and doesn’t need further stimulus right now;”

Just because some folks say something does not make it so. The Irish economy has recessed near enough two decades – its just not particularly obvious. But look carefully …

“(b) that the Irish economy has proved itself over previous decades to be unusually volatile;”

Correct. Again, its not obvious why, especially if you keep chanting the salient reasons and fail to ask some searching questions about the not so obvious causes…

“(c) that the international outlook right now suggests that there are risks on the horizon;”

Actually they are just off-shore …

“(d) that the Eurozone is a very dangerous place to be anyway, if you are a small country;”

Its never a good political idea for governing politicians to cede any part of their country’s sovereignty, most especially for a monetary bribe. But it happens. So what’s new then? Its like losing your virginity. Once its gone: its gone!

“e) that broad tax bases are preferable to narrow tax bases;”

Yes indeed. But do we actually have any (meaningful) non waged-labour income taxes in Ireland? On land? On financial transactions?

“(f) that given all of the above, arguing for the abolition of the USC or water charges (water charges, as opposed to Irish Water) is grossly irresponsible, and should suffice to disqualify a party from being taken seriously as a “safe pair of hands”?”

There are no ‘safe pairs of hands’ in politics. Just some less mendacious ones. Your political popularity is directly proportional to the amount of other peoples’ monies you can spend. If this is not blindingly obvious ….

Our developed economies are like a massive global bubble – inflated by our ability to extract and put to use, with fantastic technologies, two incredible sources of carbonaceous energy. You can only inflate that bubble so much. Its now a question whether we keep attempting to inflate that bubble until it bursts, or we allow it to deflate in a slow and controlled manner. Past experience of human behaviours would suggest the former is probable. And no, our fantastical technologies cannot ‘save’ us: they are voracious consumers of energy ….

The consensus of posts so far (excluding the original and more sensible KOR opener) seems to be:

(a) There is no growth. Its a mirage, Its all down to dodgy figures. We are still probably in recession. Contract manufacturing, blah, blah, blah.

(b) Even if (by some unlikely fluke) there is a teeny-weeny little bit of growth, no one is benefitting from it and it won’t last beyond Easter because Karl Marx predicted that capitalism would destroy itself and all the signs are that his prophecy is about to be realised.

© Despite the fact that the growth is a mirage and, even if in the unlikely event it is not entirely a mirage, there should be no tax cuts as to do so might overheat the economy.

Talk about having your cake and eating it.

The JTO view is more in line with all the stats:

(1) The economy has been growing strongly since 1986, with the exception of the period 2008-2011. The latest phase of growth began in late 2011 and has been accelerating since.

(2) Far from not benefitting anyone or not trickling down, since late 2012 the budget deficit has melted away at a rate no one predicted (a marked contrast with the UK), unemployment has fallen by almost half, retail sales and car sales are soaring, and consumer confidence is at an all-time high. There is now ample scope to reduce some of the taxes that were raised during the recession.

(3) How long will it last? I don’t know. If I did, I’d make a fortune.

But, looking at historical precedents, the first economic boom in Ireland lasted from 1958 to 1982. The second economic boom in Ireland lasted from 1986 to 2007. As booms progress, stresses usually build up in an economy that bring the boom to an end. Typically, these are accelerating inflation, loss of competitiveness, balance-of-payments deficits etc, as unemployment disappears, employees seek higher wages, and consumption/imports grow faster than production/exports. Clearly Ireland is nowhere near that point yet. In the 2 previous booms it took 20 years to get to it. The current boom is only 4 years old. Inflation is zero, the budget deficit is gone, there is a massive balance-of-payments surplus. Based on internal factors, there is a minimal chance of the current boom ending and Ireland going into recession. From all the stats, 2016 looks more like 1994 than 2017.

But, its not all rosy or risk-free. Current leadership in the western world is the worst in my lifetime. Obama has more or less already retired. The next President might be a crook or unbelievably a socialist. France, Italy and Spain are paralysed by statism. Parts of Europe are under invasion from North Africa and the Middle-East and are effectively in a war situation with associated clampdowns on free movement of people. While, throughout the western world (Ireland included) the liberal assault on the traditional family and the way in which society was traditionally organised is continuing apace, bringing in its wake a growing underclass and a growing number of people more or less dependent on the state for their living. So, it would be foolish to dismiss the possibility of a global recession. Its definitely a possibility. And, if it happened, it would obviously affect Ireland. But, a recession being generated from within Ireland, forget it for the next few years and maybe longer, if 1958-1982 and 1986-2007 are anything to go by.


Have your figures been “endorsed by the Department of Finance”, presumably by those civil servants who proffer advice but it remains, of course, the job of politicians “to take decisions”.

We have these politicians throwing mythical figures at one another about “fiscal space”, two words that threaten to mark indelibly the career of our MOF i.e. extra money that might or might not become available. This in circumstances where it is quite clear that there is no adequate analysis, still less control, of the levels of recurring current expenditure!

The Irish electorate deserves the politicians it elects in these circumstances, especially those offering a department for this or a department for that. Were it not for the limitation in the Constitution on cabinet numbers, there would be a government post for everyone. This may well come to pass.

The New EU/UK agreement.

Migrant EU workers have just been turned into Mexican wet-backs. Social Europe has just been turfed out the UK neo-liberal window.

@ Tomaltach

You say: “..this election is in many ways far more disheartening than that of 2011. Back then the issue was crisis managment. But right now it’s more about what kind of politics and society will hope to look forward to over the next say decade or so.”

I agree, as do, I reckon, many other citizens, with the latter opinion , but not that the quest is disheartening. Fair enough, FG made the egregious mistake of assuming that an electoral strategy that might effectively apply in a far larger polity (UK) could be replicated within a small country with a deeply embedded PRSTV system (Ireland).

“Keep the recovery going” might sit well within certain sections of our business community, but is realistically meaningless beyond that cohort. It is also frankly insulting to the vast majority of Irish citizens who know that the real ‘recovery’ has had precious little to do with the direct actions of government in any case, and has happened in spite of their policies rather than because of them. Plus, the inherent fragility of our current economic recovery, subject to externalities, is apparent to all.

The endless repetition of a vacuous slogan, designed for electoral gain, has only served to bring popular ridicule down on the heads of the majority party in government, and rightly so. I never thought I would sit in front of the TV, a bag of bounty bars on my lap, waiting to whoop at the next hapless government spokesman’s enunciation to “keep the recovery going”. Sadly, I was never disappointed over the first ten days of this GE campaign. Whoops, aplenty!

As you suggest in your post, if we’re looking to the future, then immediate micro-problems that affect people’s day to day living conditions need to be acknowledged, and granfted onto overall macroeconomic objectives.

That said, I’m not pessimistic about the GE outcome. As citizens we will choose among the candidates to find representatives that fit best with our own personal judgement on individual candidate capacity for problem-solving, contributing alternate views, and leading the country forward. Thereafter it’s up to the TDs of all parties, and none, to cobble together a workable executive. And may God help them if they fail in that primary duty!

@ Veronica

Excellent post! I agree with you. and Tomaltach, all the way except when you get to your conclusion. The citizens in question, on the evidence, have no interest in whether the country goes forward or backwards only in what they expect their favoured candidate to deliver for them.

Cliff Taylor on the likelihood of the “permanent government” being required to hold the fort for a a time.

It is to be hoped that it will not waste the next five years in the same way as the last five have been and throw everything at coming up with an immediate replacement for the “tennis club” accounts on the basis of which the country is continuing to operate. The next overrun of health spending will be the canary in the mine.

In addition to talking about a broad tax base, it’d be nice to have a broader political base.

The established parties (FG, FF, Lab, SF) get millions in subsidies. New entrants are fighting against their own money to try to get their ideas across. It’s no wonder we’re not seeing enough in the way of bright ideas.

If anything’s disappointing in the election it’s the lack of ideas and the lack of discussion of them. Our political discourse is stuck at the level of Fintan O’Toole and Vincent Browne (i.e. not very high). Break the political party lock on funding and perhaps we’d get somewhere. Maybe, maybe not.


One could contend that it took 6 general elections and a change of horses by Dick Spring for a majority of voters to settle on a combination of factions capable of providing reasonably competent governance following the long drawn-out play-out of the impact of the economic lunacy advanced by Martin O’Donoghue (and swallowed by Jack Lynch and George Colley) in 1977. (It was long drawn out because, in the FG-Lab 1982-87 combo, FG was unable to tackle the macro issues with the monkey of Labour on its back and it was pathologically incapable internally of dealing with the micro issues.)

It’ll take at least 3 general elections to sort out the aftermath of the triple (property, banking, fiscal) blow-out in 2008. It appears that a majority of voters are little concerned about by whom or how they are governed. They may have a well justified perception of the ability of fully empowered governing politicians to screw things up without the saving grace of getting things rights and of an effective continued functioning of the machinery of government for a limited time until stable governence emerges – most likely via another general election.

They gave FF and the Greens a well-deserved electoral kicking in 2011; now thet seem minded to give FG and Labour an almost equally well-deserved electoral kicking. Once they’ve had that satisfaction, they might then give more thought to the questions of by whom and how they would consent to be governed – and, equally important, who should comprise the government-in-waiting.

If the general election fails to generate a stable government we should not lament the failure of the voters to elect sufficient TDs for whatever factions would be required to generate one. We should enjoy and celebrate the electoral kicking they appear almost certain to deliver to the arrogant, the over-mighty, the self-serving, the panderers of special interests and the incompetent. And we should look forward to them getting another bite at the cherry where they will probably deliver some sensible and sustainable governance.

@ PH

cf. the written PQ link above.

The voters are totally in the dark because the politicians see it as in their interest to keep it that way. The mutual game of blind-man’s buff will continue until the budgetary facts are pinned down and in a comprehensible manner. The establishment of an Independent Budgetary Office (IBO) would not help as the upstairs/downstairs division of the single most important department of state responsible over the past five years makes it incapable of providing the necessary financial data.

However, I agree with you that the kicking about to be handed out by the voters, it would seem, to the parties principally responsible for this deplorable situation is a hopeful sign. Maybe the public servants concerned will finally grasp that inter-departmental rivalries must take second place to the creation of a comprehensive rolling system of national accounts and take the opportunity to impress this need upon whatever incoming government is cobbled together.

If the polls over the weekend are correct (and obviously I don’t know any more than anybody else whether they are or not), their overwhelming message is that the electorate want a stable center-right government in the form of an FG/FF coalition (or arrangement of some sort), with a mandate to continue the current economic recovery, reduce taxes, and an end to social liberal experimentation. Such a government would be under no pressure to ‘repeal the 8th’, plunder and secularise the school system, introduce an NHS, or abolish the Angelus, all the things the loopy-left media in Ireland think the electorate are primarily concerned with.

Given that the polls tend to underestimate FF, I wouldn’t totally rule out FF being larger than FG (so an FF/FG coalition rather than an FG/FF one), but I’d be surprised if that happened. Assuming not, an FG/FF coalition (or arrangement of some sort) is the only viable combination. The alternative parties, which were supposed to overthrow the traditional ‘big two’, are faring very poorly. Lab are imploding (obviously there are not enough anti-Catholic bigots to go round). Halleluia for that. I pray they will get zero seats on Friday. SF are coming nowhere near where they hoped, while the SocDems and Renua are getting only a few per cent. In contrast, FF are having a good election and making fools of those who predicted they were on the way to extinction. FG are not doing badly either. They look like getting 28%-30% and being the largest party. Its the collapse in the Lab vote thats bringing the current coalition down. So, an FG/FF (or FF/FG) coalition is the only viable option after Friday and one which clearly the majority of the electorate want. Such a coalition could easily last 5 years.

Of course, its possible that, based on historical animosity rather than intelligent analysis of the current political situation, one or the other of FG or FF will refuse to play along. If so, I’d expect another election soon with the one that didn’t didn’t play along getting a hammering in the subsequent election. Likewise, if either of FG or FF constructed an absurd rickety-rackety coalition with SF and possibly some of the smaller left-wing parties (unlikely, but just about possible), that coalition would soon be massively unpopular, would collapse as soon as some issue of substance came up, with all parties participating in it collapsing at the subsequent election.

DOCM: I know not whether I should laugh or cry at some of your comments – “The voters are totally in the dark …” This is simply not correct. ” …because the politicians see it as in their interest to keep it that way.” Really? The primary interest of a parliamentary politician is to get their bum back onto that brown leather seating. Period.

You must fully incorporate into your mindset that any Irish government is actually an elected dictatorship – and you know about dictators? – carrot in one hand; stick in other. They hand out goodies in a disproportionate manner to garner and to sustain support and will ruthlessly and vengefully penalize those who actively oppose and criticize them. So which group of groupies do you think attracts the most followers? Yeah, I thought so.

“Maybe the public servants concerned will finally grasp that inter-departmental rivalries must take second place …”

This is even more wistful – if not downright delusional. The PS – above certain ranks is hierarchical, pyramidal and rule and regulation bound. The upper-level of the PS working world is a Bitch creation environment. One eventually either reverts to type (or metamorphoses) and becomes professionally devious, mendacious and self-seeking or slips sideways and becomes an administrative automaton You would never believe this to be so. But just try working with them. Concepts such as loyalty, co-operation, accountability or God forbid, openness and transparency are only required from those of lower rank. What’s it all in aid of? Dunno. But the stakes are awfully small. Maybe that’s it.

Do not look to our senior PS for meaningful restructurings. You will be very disagreeably surprised. Albert Reynolds was correct – he wanted things on a single page. The PS will provide a booklet – and several committees and sub-committees to render that. Its the Mushroom Policy, or the Bullshit Brigade, whichever you prefer.

If today’s Irish Times poll is accurate (and who knows?), its a disaster for the Left. The total Left vote (including dubiously SF and the Greens) comes to 29 per cent, which is well down on the last election. Of this, over half is SF, whom many leftists (with good reason) don’t consider left-wing at all. Even generously awarding them the Green vote, the pure Left (what we might call the Fintan O’Toole Left) are on 14 per cent (Lab 6, SD 3, Trots 3, Greens 2). This after the biggest recession in the global economy since the 1930s. Pathetic. Time facts were faced. The Irish electorate are simply not interested in any of the many variants of socialism.


I don’t think a majority of voters are in the dark. There will always be a certain percentage of voters who believe it is possible to impose levies on others so as to provide largesse for them without having any detrimental impact on the body politic or economic. But I sense that a majority of voters are much more sensible and are very well aware they are being gouged by various special interest groups in the sheltered private, public and semi-state sectors – and all that politicians are offering (and all they are able to offer) are very limited tweaks in the “great re-distribution” designed to compensate for this gouging. This is fuelling considerable disgust and anger.

Where they may be in the dark is on the minutiae of the complex edifice of legislation and regulation that facilitates this gouging. Despite being “hidden in broad daylight”, it would take an army of forensic accountants, lawyers and regulatory economists to provide a full revelation of the mechanism of this gouging. But it didn’t prove necessary to conduct such an exercise to arouse very focused and effective public disgust and anger.

The water charges débacle provided the perfect lightening rod. It had a selection of the full cast of characters from all of the special interest groups – from the high-powered legal, accounting, consulting, IT and PR professional service providers (with their snouts in this huge new trough of fees) through the tame academics (who know on which side their bread is buttered) and the suborned (or lazy) media types to the central govt. departments dealing with environment and energy (hoping to come up with a politically cunning scam) and finance (hoping to fiddle Eurostats’s accounting rules and DG Ecfin’s fiscal rules), to the management, staff and unions of the 34 local authorities and their water divisions (aiming to maximise the preservation of their existing privileges) and finally to the management, staff and unions of a prominent semi-state – BGÉ – (who were to be compensated for the sale of its non-network activities by setting Irish Water up as a subsidiary within it with a free transfer of the sector’s assets.)

The outgoing government may think that it has neutralised water charging as an issue on the doorsteps, and to a considerable extent it has done so. But the damage was done between April and November 2014. While a majority of voters may still be in the dark about precisely how they are being gouged and by whom they are being gouged, this episode provided a glimpse of the collusion that is involved and opened many people’s eyes to similar collusion in other sectors. There will be many voters expressing their disgust and anger at how the mainstream parties (and that’s all of them) have facilitated the continuous gouging they suffer next Friday. And it’s not before time.

Voters are in the dark about how corrupt the Permanent Government is. How disorganised, how wasteful, how inept.
They don’t even use cost benefit analysis or have PS wide purchasing conditions. The number of children who die in care is appalling. The waste in the HSE is probably between 2 to 3 bn annually.
Working class people have given up on BAU. The bourgeoisie should follow them.

@ JTO.

My prediction. Another election, with a FG/FF government ‘reluctantly’ going in to power for ‘the good of the country’. That’s dependent on Enda not calling any more of the electorate ‘whingers’. Otherwise it could be a be a FF/FG.

I would be happy with:
– Hold or increase inheritance tax. (Irish independent myths about those ‘forced’ to sell the family home are just that, a myth)
– Hold or expand the USC and/or PRSI.
– increase in the property tax, though reformed as a site tax.

Note: No one in Ireland pays more that 30ish% in tax. Anyone with significant earnings in the higher tax brackets max their pension contributions and leaf through EIS brochures every December.

For a society that has:
– Reasonable public transport, including proper cycling networks in cities.
– Affordable rent and secure rental accommodation.
– Pension coverage for all those employees without. (It scares me that no one is attempting to deal with that time bomb)
– A functional public health service.
– Well supported families. Childcare (essential for the renting, extended
famililess, economic nomad, running to stand still, young families like mine)
– A well resourced police service.
– Appropriate sentencing for crimes committed.
– Less rent seeking. Health and Legal professions I’m looking at you.
– And a government that won’t take on 1,000s of Syrian/African refugees just because Merkel went on a solo run and is happy for a million or so to come to Germany every year.

Also, a move to a dual Euro/Punt currency system as a hedge against those nuts in the ECB would be nice. Fat chance.

Basically, looking to the past in Ireland and the state of the US/Europe now. I’m for a responsibly governed, Social Democracy without the open door immigration and a renewed focus on the family.

@ PH

When I spoke of voters being the dark, I meant that they had no objective overall picture of the budgetary situation confronting the country in terms of total resources, with reference to the best means of increasing them. They have, of course, a grasp of the areas of it that impact directly on them and that is what they are concentrating on in their dealings with the politicians vying for office. They see the latter, literally, as messengers to some higher instance that, as Marian Finucane memorably described it on one occasion, “will look after them”; the government, in other words. This, it seems to me, is an inheritance from our colonial past compounded by the electoral system which will see repeat counting of paper ballots well into next week.

Labour’s problem is that it looked after the wrong constituency over the past five years i.e. those in permanent, pensionable employment, mainly the public sector, and (i) did not even look after the lower paid therein and (ii) alienated totally the sector of the workforce without either employment or pension. I need hardly add that the failure to stick, as a matter of principle, to the creation of a universal health system, and not be guided by the vested interests in the existing health structure, has also come back to haunt them.

We need a line by line presentation of budgetary spending. This is well within the capacity of modern accounting systems, including the identification of “cost centres”. We should not need the OECD to tell us that we are spending more than any other developed country, bar the US, on health, for example, and getting an inequitable, two-tier mediocre health service, at best, in return. A matter, literally, of life and death as the repeat scandals emerging in the health sector attest.

The major parties are selling quack remedies, including more disruptive re-jigging of the structure of government departments, when this serves absolutely no purpose other than to reduce efficiency even further.

We need a period of squabbling no government. Such have done us some good in the past.

@ PH

By way of addendum, I would suggest that voters would be much better off reading the European Commission’s assessments of where the economy is at, rather than election manifestos, when coming to a view on the likelihood of any of the actions promised “to keep the recovery going” doing anything other than hindering it.

@That’s Legal

Good points. I wonder which party you as best at offering them.

I see loopy Vincent Browne is back writing in the Irish Times today:

This is what he says:

“All income and wealth is the property of society, not the property of those who claim to have “earned” it.

Sums up socialism in a nutshell.

The whole election seems to be about how to divide up wealth, regulate its creation or simply to limit economic activity in some way. Wealth creation itself is off the agenda. We must be a very well off country when all we have to worry about is dividing up an enormous cake, or making it smaller.


I think it’s asking a bit much to expect voters to form a view on the overall budgetary picture. Some, no doubt, will; but most will focus on their perception of the impact on their own specific circumstances. The amount and allocation of public expenditure and the funding of this expenditure are interwoven with the “great redistribution” via the welfare and taxation systems required to reduce the excessive inequality of the distribution of market incomes. Among the similar redistributions in other OECD members, this redistribution is proportionately greatest in Ireland.

So there should be little surprise that many voters choose the TDs and factions who they perceive will maximise their share of this redistribution – and will punish those who previously promised to look after their interests but failed.

So, next Friday, some punishment will be meted out to FG and Labour – and others factions and individuals, almost by default, will enjoy increased support in an almost random manner, since there is no credible or effective government-in-waiting.

It will take a long time before the rent-seeking that generates the excessive inequality of the distribution of market incomes will be curtailed – and the resulting gross inefficiencies of the “great redistribution” will be addressed. But it will happen eventually as more and more voters are beginning to see the excessive and unnecessary burden this rent-seeking is imposing on them.


the only way to get growth going again is to reduce income inequality.
In 2014 Merrill Lynch calculated that that global central banks boosted liquidity by roughly $9tn since equities bottomed in 2009. Over the same period global market capitalisation rose $35tn while the global economy expanded only $14tn.

That is what the top quartile does. It speculates. Might as well p#ss it against a wall. Without growth large swathes of that that 35bn will not be monetized.


Your missing link!

‘But it was Gerry Adams, who, more than any other single person, was responsible for delivering the most significant political achievement of Irish history for generations: the peace agreement on Northern Ireland. In terms of achievement, no other figure in Irish public life rates even close to him.’

[…] The worst of these coalitions has been this tea-party government, which has enforced the cruellest cuts on the lifestyles of the disadvantaged, the most egregious being the 80 per cent in the funding of Traveller programmes, the cuts to respite care, to special needs teaching, to the funding of programmes supporting victims of rape, the cuts in lone parent allowances. All while protecting the tax havens and, latterly, further enriching the rich.

@ PH

I do not agree. Rather, I agree with the opinion of Johnny Foreigner.

Anyone who takes the time to read the Commission report will find in it both the broad budgetary data and a list of the assorted failures of the outgoing government to implement specific undertakings, notably in relation to the control of expenditure.

The idea that the troika “has been sent packing” is, of course, complete nonsense. It is still very much on our case and will remain so until every cent advanced by “official lenders” has been repaid.

The one thing that the election is confirming is that we have the most mediocre political class in Europe, with the possible exception of our nearest neighbour.


I don’t think there’s any fundamental disagreement. You (and Johnny Foreigner) are decrying the inefficiencies and the lost opportunities and highlighting what needs to be done. I recognise all of this, but I’m trying to sketch out the principal reasons for the inertia and for the failure to do things that should be blindingly obvious.

A plurality of voters will get there eventually and some of the logjams will be broken. At the moment many voters are focused on giving FG and, in particular, Labour a well-deserved political kicking. It may result in a situation where no faction or grouping of factions and individuals will be able to form a stable government. But that appears to be of little concern to a large number of voters. They are confident that the government apparatus will continue to function in a caretaker mode if necessary and that they will have an opportunity to deal with this at a later stage if the need arises. And in doing so, by default, they may also address the current lack of a credible ‘government-in-waiting’.

It took the voters a long time to sort out a stable and reasonably sensible governance arrangement after the last FF-facilitated economic mess beginning in 1977. Hopefully it won’t take quite so long this time.

@ BW snr + PH posts re Mandarin shenanigans and Rent Seeking etc –

absolutely spot on – sadly for the general citizenry….

@ PH

I have no illusions about the sophistication of the Irish electorate. It is probably on a par with that of any other i.e. just as easily led. What I do know is that the country has, for the first time since independence, a naer permanent “external examiner”.

My conviction is that the electorate may well give FG/Labour a well-deserved kicking for the failings identified by the examiner in question without being consciously aware of the source. Indeed, there appears to be a generalised popular desire to believe in the myth that with one bound Hibernia was free.


The election debate was marked by what was left unsaid. The PS remains a shambles. Cost benefit analysis would be a novelty. Documentation is a joke.
Health is worse.
The macro outlook is dreadful.


Since they get the opportunity to exercise their ultimate authority only every 4 pr 5 years, it takes voters a while to form a settled view on things. In the last election and this one they have given both elements of the long-standing two and half party system a well-deserved electoral kicking. Around 55% of those who voted and Friday expressed a measure of support for these two and half parties. It wasn’t that long ago when they commanded the allegiance of almost 95% of voters. The messages that an increasing number of voters are seeking to communicate to these parties about their concerns, disgust and anger at the exercise of excessive control and whipping of TDs in these factions, at the excessive dominance of government over parliament and at the capture of governance by vested interests may not be coming across very clearly, but there can be little doubt this disgust and anger exists – and has contributed to the erosion of support for the two and a half mainstream parties.

Apart from a handful of populist and dangerous national socialists and the few perenially deluded on the left the vast majority of those who have been and will be elected outside the two and half parties would, in the past, have fitted comfortably within one or more of them.

It is really only a question of how long it will take one or more of the mainstream parties to realise this and to change party organisation and processes, to change the relationship between government and parliament and to tackle the vested interests.

Whereas FG and Labour frequently beat their breasts about thankless nature of the task they perform cleaning up after another mess made by FF, ironically, it is more often the case that FF makes the changes far more effectively – e.g., Sean Lemass driving the policy changes from 1958/59 that started to lift the economy out of three decades of Dev’s debilitating autarky and the Haughey/MacSharry push to do what FG and Labour failed to do between 1982 and ’87. Perhaps FF can do it again. FG and Labour had their chance and they blew it. They actually deserved a much more severe electoral kicking.

@ PH

No doubt you are right in domestic terms. But I return to the point that I have made repeatedly i.e. that Hibernia may be out of the operating theatre but is still in intensive care because of the enormous debt run up for the medical treatment. Neither politicians nor electorate are prepared to accept the truth of this contention. Only events will push them in that direction.

The big event at the moment is that the only conceivable stable government is a FF/FG one. If they need the most easily adopted government programme, they have Annex A – pages 76 to 80 – of the Commission’s most recent report on Ireland, which I will post also on this thread (with a word of thanks to the thread moderator).

It is, after all, largely that put in place by the previous FF government.

The two parties can take as much time as they like. The less interference from them, the more likely the patient is to recover given that an economy is made up of much more than the national political process, especially if a major percentage of it is owned and run by mainly US companies and has an inbuilt impetus as a result.

Apart from the general state of denial, media included, on the state of health of the patient, the most striking feature of the ongoing electoral postmortem is the failure to recognise that the near demise of the Labour Party is attributable to the fact that the bulk of the unionised workforce (presently working and pensioned) is employed by the state, not by MNC’s and Irish SME’s. Those working for the latter, and especially those who lost their jobs and/or coping with the various debt arrears identified in the Commission’s report, can hardly have been impressed by the manner in which they were, and continue, to be treated relative to those in “permanent, pensionable employment”. Exactly the same dichotomy as that plaguing Spain, Portugal and Greece.

It would have been much better had Labour stuck to the bailout script; and to have blamed the troika! To coin a phrase, it hasn’t gone away.

@Paul Hunt

“Sean Lemass driving the policy changes from 1958/59 that started to lift the economy out of three decades of Dev’s debilitating autarky”.

While some of your points about the current political situation are valid, I would challenge what you say about Dev.

“three decades of Dev’s debilitating autarky”


Poor old Dev is scapegoated in the Dublin 4 media for the fact that the Celtic Tiger didn’t take off until 1958/59 rather than in 1922/23. Thanks to historical revisionists, most people are now under the impression that Dev was unchallenged dictator of ireland (a la Franco or Salazar) for the first few decades after independence, ruling continuously from 1922 to 1958/59 and presiding over an economic and social backwater.

Actually, between 1922 and 1958/59 FF and FG (or CnaG as I think they were called then) were in power for almost equal periods of time (about 18/19 years each). Dev was Taoiseach twice, 1932-48 and 1954-57. Of the 16 years in Dev’s first period as Taoiseach, 4 or 5 were during the Great Depression when every country stagnated, and 6 were during World War 2. I’m not actually sure how Dev was supposed to create a Celtic Tiger in those conditions. There wasn’t that much scope for increasing exports to France or tourism from Germany in the early 1940s While the only multi-nationals that would have been interested in coming to Ireland in those years were the British and German armies, which most people thought at the time Dev did brilliantly to prevent. Taken as a whole, Dev’s first period in office (1932-1948) was extremely successful by the standard’s that Ireland had experienced for the previous century. Between 1841 and 1932 the population had fallen by 70 per cent. But, between 1932 and 1948 it actually rose for the first time since the Famine. The fact that the period 1932-1948 was a lot better than what Ireland had experienced for the previous century might explain why Dev won 5 elections in a row in that time, a feat that Enda Kenny looks unlikely to achieve.

It is true that it would have been better if he’d retired and handed over to Lemass after FF lost the 1948 election. However, it is unfair to blame Dev entirely for the economic stagnation of the early and mid 1950s. If we agree that 1948-1958 was the worst decade for economic growth in Ireland since independence, it is reasonable to point out Dev was in power for only 4 of those years. There was actually an FG-led government in 1948-51 and 1954-57.

It is also wrong to suggest that Irish economic growth only took off after Dev retired. The First Program For Economic Expansion, seen by most economists as the take-off point for Ireland’s economic growth, was launched in autumn 1958. Dev didn’t retire until June 1959. The high rates of economic growth Ireland has achieved almost continuously ever since (except for 1983-86 and 2008-11) were already in full swing (although in their early stages) by the time he left office.

It is true that Ireland was socially extremely backward while Dev was in power. Some examples of this backwardness will give you a flavour of how bad things were then. In 1958 there were only 300 prisoners in Ireland (4,000 today). You could walk the length of O’Connell Street on a Saturday night without being mugged. And, horror of horrors, in some years while Dev was in power there wasn’t a single murder in Ireland. The shame of it! None of these would be acceptable in a modern progressive socially liberal society.

I should declare an interest here in coming to Dev’s defence. I actually met Dev in 1954. Well, that’s putting it a bit strongly. As a 5-year-old, I got presented to him by my parents at some function or other in Bundoran in that year. I had no idea who he was at the time.

Regarding the current political situation, as I said, you make some valid points. The fragmentation you refer to is common throughout the Western World. In the UK the Conservatives and Labour used to get 95 per cent of the vote, but its now down to about 65 per cent. This fragmentation is somewhat more pronounced in Ireland than in the UK, probably because of the PR system. In Ireland any crank party can get 1 or 2 TDs elected, while its much more difficult in the UK. UKIP got 15 per cent in last year’s UK election, but only 1 MP. In Ireland they’d have got 25 TDs with that vote. Other countries with PR are experiencing similar fragmentation to Ireland.

Even so, in this election the sensible center-right has won a clear majority. FG and FF combined look like getting 95/96 seats (out of 158). The total left-wing vote is down compared to the last election. SF have bombed (excuse pun). It looks like 14 per cent is their limit and they’ll never go above it. Labour have imploded. The Social Democrats have the grand total of 3. While the remaining nutty left-wing parties have just a handful of TDs. It is now up to FG and FF to act on what the electorate have voted for and provide (in one way or another) stable center-right economically-sound government for the next 5 years. In some ways the result of the election is ideal, with FG and FF having enough seats to form a stable government, but not enough seats to be tempted to go into coalition with one of the left-wing parties (no combination other than FG/FF has the numbers). If either FG or FF attempt to go down that route and try to form a rackety coalition with any of the left-wing parties supplemented by independents (unlikely but not impossible), they’ll have to pay the price in the election that follows the inevitable collapse of that coalition, probably within a few months. In contrast, an FG/FF coalition can easily last 5 years.

Another aspect of this election is the ludicrously long count. Its a national embarrassment and nobody outside Ireland understands why it takes so long. The current count has been going on forever. It might even last until the middle of the week. The great Bertie Ahern actually introduced a mechanism for bringing the entire process into the twenty-first century, electronic voting. It worked brilliantly in 2002. If it had been used this time, the count would have been done by midnight on Friday and we could all have watched the rugby in peace.

However, the paranoid liberal elites worked themselves into a frenzy and became convinced that Bertie had personally written the software code to count the votes himself and had cunningly inserted the line {if vote = FF add 2 else add 1}. So, now we are left with this farce. Of course, RTE and the other media love it, another reason why they campaigned against electronic voting. Think of the advertising revenue as millions tune in on a cold Sunday night to see if, on the 145th count in some obscure rural constituency, the Progressive Socialist Worker candidate has managed to move into 35th position ahead of the Socialist Worker Progressive candidate from the distribution of the 74 votes of the just-eliminated Socialist Progressive Worker canddate.

Another aspect of this election is the falsity of the opinion polls. A Red C poll last Sunday put FG 10 per cent ahead of FF. The margin in the actual election was 1 per cent. Another poll put FF and SF level. In the actual election FF were 10 per cent of SF. Exactly the same thing happened regarding the FF and SF votes in the 2014 local elections. There needs to be an enquiry, just as there was in the UK after the polls got the result wrong last May (although by nowhere near as large a margin as the polls here have). All the more so as polls by the same companies are being used by the media to generate the belief that there is massive popular backing for various pieces of (always liberal) social legislation.

@ JtO

That’s a fair defence of Dev. It’s all well reviewed in Joe lee’s ‘Ireland 1012-85, among many other tomes. We are all revisionists nowadays.

My father, who lived through it all, often told me about the 30s. It’s quite difficult for people today to imagine what it was like not to have any cash. Even ‘coppers’ were scarce in some homes.

The ambition of the first Cumann na nGaedhael MoF was to lower the rate of income tax below the then British rate of sixpence in the pound. Irish banks put their money on deposit in London. Absent private or public investment, mass emigration was the only possible result. That was responsible government, as they understood it, but in retrospect, it was government in the service of a narrow set of interests, including property interests.

We achieved political independence (26 Counties), but economic and military independence was never likely to be achievable.

It is highly questionable whether the sort of ‘growth’ we have witnessed in recent decades is what Lemass or Whitaker could have imagined. The FDI strategy today is a long way from Liebherr in Killarney 60 years ago. We get 200k jobs, but the most important part of the transaction is fiscal and financial. We have pawned our sovereignty in the process. CJH didn’t just have an eye for teapots.

There are many ways to acquire unsupportable levels of debt, and each entity has its own pathway to bankruptcy. The era of debt-fuelled growth is over. Whichever administration comes to power, the problems remain the same eg shortage of natural resources, eco problems, bust banks, entrenched stakeholder interests, mismanaged public sector, and a hugely alienated, drug-soaked and disoriented underclass.

SF is the only party which has a toehold in the bottom of the pile, and it is a dangerous place, for reasons which are mainly rooted in 26-county social inequality. While many individual clerics fought for social justice, and the family is at the centre of the Constitution, the role of organised religion in this state has mainly been one of support for the status quo. Critical thinking was always unwelcome outside tiny protected circles, so institutional reform has been very slow.

I subscribe to the need for Dail reform, as indeed do most of the regular contributors here, but nowt has happened until the terrible prospect of SF ‘leading the opposition’ came into view. As a good Northerner, you surely can recognise bigotry when you see it.

Far from having ‘bombed’, SF votes and seats are significantly up. I don’t know if that is their limit, and neither does anyone else, not even their own leadership. What we do know is that several Former FF Bigwigs were on the media yesterday, talking about ‘Dail reform’.

Funny they never mentioned that when they were actual Bigwigs, and in power. Notwithstanding their Pauline conversion, ‘market forces’ are going to push a blushing FF into the waiting arms of FG.


I paid some attention to these DG Ecfin documents while Ireland was in the support programme – and even then the Commission officials generated considerable amounts of garbage and refused to tackle key issues. You should probably pay more heed to the disclaimer used: “This document is a European Commission staff working document. It does not constitute the official position of the Commission, nor does it prejudge any such position.”

As for governance options, The Guardian’s Henry McDonald may indeed be revealing a very plausible scenario. It ties in with my contention that when it comes to instituting important and badly required changes – in this instance changes in Dáil procedures and in the relationship between government and parliament – FF often proves to be far more capable and effective. It would be wonderful to see a government in fear of the Dáil – and not dominating and abusing it as has been the wont of successive governments in living memory.

Micheál Martin knows that FF needs another stint in opposition to boost its heft and credibility as the ‘government-in-waiting’ (or at least the core of this of a government-in-waiting). Providing “confidence and supply” to a limping FG-dominated caretaker government is the best option for FF at the moment.


I agree by being so cryptic I was being a tad harsh on Dev. But I also agree with you that he should have passed the baton on when he lost in ’48. Uisce faoi thalamh. We are where we are now. And I’m a bit surprised and bemused that you’re channelling the establishment (if not entirely the Dublin 4) commentariat’s drum-beat in favour of an FG/FF coalition.

As I indicate above, FF providing “confidence and supply” to this well electorally slapped rump of FG and Labour would prove a living political hell for the latter – and could provide remarkably good goverance for the majority of citizens.

John, things have moved on somewhat since the 1970s: the median voter is now right-of-centre, the previously named ‘working class’ or workers or Left, or whatever your having yourself, have metamorphosed following the Cartelization pathway of our so-called mainstream two and one half parliamentary party system.

What we have is the beginning of the end of the transition phase: from a non-sustainable Production/Consumption economy to an even more non-sustainable Credit/Debt economy. The ‘big-lads’ have simply transitioned somewhat faster and sooner than the ‘little women’.

The two economies I refer to above both fall under the same reigning economic paradigm – Permagrowth. Now, it is this 250 year old, fossil fuel driven economic paradigm that is faltering – and it will take ALL political factions, Right, Left and Centre down with it. They all have been constructed upon it!

I got it wrong. I believed that rising energy costs would deflate and stagnate Permagrowth. In fact its low energy costs that is doing it! – coupled with exponentially increasing debt burdens. Its like a violent storm (low energy costs) undermining a cliff-faced shoreline. Its only a matter of time before the cliff-face collapses. Best head inland.

As for Dev. Have you there John. Sat a few pews behind him for Sunday Mass! If FF have any genuine concern for the ‘National Interest’ (aka: The Holy Grail) they will stand firm and remain in opposition. Let the ‘whingers’ put their puny body muscles where their muscular mouths are. They would not like that, now would they? No!

In Roman Emperor terminology – is Enda Nero?

Most commentators seem dumbfounded at FF’s comeback. Conor Cruise O’Brien must be rotating in his grave at a very high speed. Morgan Kelly must be totally flabbergasted. Certainly, given the strength of the economy in recent years, it seems to go against the normal rules. But, anyone reading my posts here over the years would not be at all surprised. I’d say there are several reasons:

(a) FG’s surrender to the Labour Party over its secular anti-Catholic liberal agenda antagonised socially conservative FG supporters in rural Ireland. That’s not to say there are not lots of liberals, especially in Dublin and other large cities, who support this agenda – just that few of them would ever dream of voting FG). How many of those cheering Enda Kenny at Dublin Castle on 23 May last year actually voted FG? I’d say very few.

(b) The growth of the economy since 2013 scuppered the narrative that FF had totally destroyed the economy. In 2011 we were being told (falsely) that all the Celtic Tiger growth was fake, that FF had left the economy in a totally ruined state, destined to not be able to grow again for a generation. Yet, by 2013 it was the fastest-growing economy in Europe and has remained so ever since. Obviously, FG deserve their share of credit for that, but it also undermined the theory that the economy had been totally destroyed. People saw that the severe downturn 2008-2011 was actually a global phenomenon and that the underlying Irish economy was extremely healthy, to the extent that, as soon as the global economy picked up, growth in Ireland came bounding back.

(3) The housing shortage. Recall that we were being told (falsely) in 2011 that Ireland had 350k empty houses, all the product of FF and builders’s corruption. Yet, by 2014 there was a housing shortage. How can this possibly be? It undermined the Morgan Kelly theory that builders (mostly FF supporters) were some sort of evil species who had ‘destroyed Ireland’. The idea that building houses should be prioritised again began to be looked on more favourably, and, as the builders’ party (supposedly), this was bound to benefit FF.

(4) Regional disparity. During 1986-2011, FF’s regional and decentralisation policies were hugely successful. The 2011 census showed this. Between 1996 and 2011 Ireland had an unprecedented population boom. Moreover, for the first time, this boom was spread evenly across the regions. The census showed population growth 1996-2011 just as high in Donegal, Cavan, Monaghan, Galway, Clare, Sligo, and even little Leitrim, as in Dublin and the east coast. In contrast, the perception in 2016 was that the growth was concentrated in Dublin and the east coast. In fairness to FG, I’m not sure how that perception corresponds to reality. It may have been exaggerated. We won’t know until the census. But, the perception was certainly there and that’s what matters in the election. The perception itself may have been partially enhanced by the Dublin 4 cultural war on rural traditional Ireland I referred to in (1).

Even so, FF are not the biggest party. There is no way they can form a government. So, they have 3 options:

(1) Fail to elect a government when the Dail resumes and have another election immediately.

(2) Support a minority FG government for a limited period of time.

(3) Go into full-blown coalition with FG for a full 5-year term, during which, while FG would have the right to the Taoiseachship, FF could reasonably expect 50 per cent of the government posts.

I strongly favour (3), but (2) is not too bad either.

I’d just say that it should be recognised when making their decision that not going into government is as risky as going into government. There seems to be a perception that the electorate always votes out the government and that, under scenario (2), FF can pull the plug at budget time and romp to victory in the election. This is possible, but not at all guaranteed. It all depends on the economy. If the global economy turns down, unemployment rises again and tax increases are needed, then option (2) is realistic. And, some of the greatest economists in the world, Stiglitz, Roubini, Seafoid are predicting just that. However, if that doesn’t happen and the Irish economy continues to grow strongly, with unemployment continuing to fall, the boom spreading out across the country, and a tax-cutting budget in October, then it would FG that would be in the driving-seat at budget time, both with regard to the timing of the election and its likely result. I’d be concerned that FF would have missed the boat.

Finally, FF have now overtaken SF in Donegal, Cavan and Monaghan. They have SF on the run in Ulster. Its time they organised across the artificial border and repeated their success in Tyrone, Fermanagh, Armagh and Derry.


Lest we forget!

Page 7

“As outlined in the Plan, €6 billion of the overall adjustment is being made in today’s Budget. The scale of this adjustment is demanding but it demonstrates the seriousness of our intent.

In simple terms, the gap between Government receipts and spending is almost €19 billion this year. This gap must be closed. We got into this position by seeking, with the full support of those opposite, to spread the benefits of the boom across every section of the population. Between 2000 and 2008, public spending increased by over 140%, while the consumer price index increased by just 35%. Working-age social welfare rates are now more than twice their rate in 2000. Over the same period, the State Pension almost doubled. These increases were well ahead of the cost of living. At the same time, taxation was reduced and the proportion of income earners exempt from income tax increased from 34% in 2004 to an estimated 45% this year. All of this was made possible by the very large property-related tax intake during the boom years. In our dramatically changed budgetary circumstances, it is clear the State can no longer afford this level of social provision.”

The speaker was a great loss to the State.


I agree that public spending increases 2001-2007 were much too high. While Charlie McCreevy was Minister of Finance 1997-2001, a tight rein was kept on public spending and growth averaged 9% a year. For this he and the FF government were vilified and demonised by the media and the left-wing commentators who dominate it. Read what Fintan O’Toole and Vincent Brown were writing about the FF government in 2001, Charlie in particular. This demonisation prompted Bertie Ahern to foolishly change tack around 2001 and replace Charlie McCreevy with Brian Cowen. He let public spending rip. And while FF must bear primary responsibility for this change of tack, it should be pointed out that, throughout the post-2001 period when they were increasing spending massively across the board, the media and even the opposition parties were criticising them for not spending enough.

Meantime in the real world, stats out this week:

new cars sales UP 37% in Feb over Fen 2015

retail sales UP 10.4% in Jan over Jan 2015

number of overseas tourist arrivals UP 18% in Jan over Jan 2015

milk production UP 19% in Jan over Jan 2015

unemployment DOWN again in Feb

So, a good week so far. Lets see what tomorrow’s exchequer figures reveal and whether or not they confirm my prediction of a few months ago that Ireland is heading for a budget surplus this year.

Icing on the cake: Aodhan O’Riordan (the Irish Times made flesh) booted out.

So, they are still counting and (as of 8.20am) we still don’t know the final result of last month’s election. Super Tuesday across 11 states was only yesterday and we have already known the result for several hours. If ever there was a vindication of Bertie Ahern’s plan to bring in electronic voting, this is it.

Dancing at the Crossroads…an Irish kitchen drama

Act 1

1 Resignation of Taoiseach
2 Resignation of FG leader
4 Leadership contest
5 New FG broom
6 All play ring a rosy

Act 2

5 Enter Mr Market… ahem ahem… copybooks out
6 FG/ FF negotiations
7 ‘Solid’ majority government established at last.
8 Events dear boy events..

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