June 2017 Fiscal Assessment Report

The 12th Fiscal Assessment Report from the Fiscal Advisory Council is now available.  The report has a summary assessment and four in-depth chapters but here’s a summary of the summary to give a flavour of the analysis:

  • The economy is performing strongly and does not require fiscal stimulus.
  • It may be necessary for fiscal policy to “lean against the wind” (i.e be counter-cyclical) to offset overheating pressures and/or prepare for possible downside risks that may materialise.
  • No overheating pressures evident at present but likely if current high growth continues.
  • In the near term, growth may exceed government projections due to momentum from 2016 and possible increase in housing output.
  • Medium-term outlook is uncertain due to external risks such as Brexit, and a “hard” Brexit is used as the central scenario in the latest forecasts.
  • Debt levels remain high and the role of revised debt targets is unclear.
  • Fiscal rules breached in 2016 and likely to be breached again in 2017.
  • Unexpected revenue gains have been used to fund within-year increases in expenditure.
  • In 2016, government revenue (excluding one-offs) grew by 2.7 per cent and primary expenditure by 2.4 per cent; the underlying primary balance was essentially unchanged in 2016 with a similar outcome expected for 2017.
  • Fiscal stance is not appropriate for a rapidly growing economy that is close to its potential, that continues to run a deficit with a high debt levels and that has clearly identifiable risks on the horizon.
  • Fully adhering to the fiscal framework, including to the Expenditure Benchmark after the MTO has been achieved, would go some way towards avoiding fiscal policy that aggravates the boom-bust cycle.
  • The Council welcomes the commitment to develop an alternative to the Commonly-Agreed Methodology for supply-side forecasts.

There is much more detail on all of this in the report.  The report does not contain much about Budget 2018 because the government have not updated their “fiscal space” estimates.  These will be provided in the Summer Economic Statement to be published in a few weeks and will be assessed in the Council’s Pre-Budget Statement.

23 replies on “June 2017 Fiscal Assessment Report”

The consistent overestimation of the average interest rate on the debt is curious. Virtually all the stock is at a fixed coupon so is there a bias in forecasts, predicated on a sharp rise in the rate of any new borrowing.?
On a broader point, the document discusses various estimates of the output gap, but it is clear that the economy was operating well below capacity a few years ago, yet the Council at the time and indeed in every year since argued for a tighter fiscal policy than required to comply with EU rules.
As the Council notes, Finance could also be much more transparent in terms of the Expenditure framework, especially around one-off adjustments.

True, but are you suggesting that they should have advocated looser policy when unable to borrow and when debt levels were yet to begin declining?

I think the arguments are based on 1 – what’s happening the cycle, 2 – debt sustainability.

Ideally, you run countercyclical policy, but if you’ve run nothing but procyclical policy for a decade or more, then you’re hands are tied. You have to do more of the same to get out of the mess that’s been created.

Policy was tightened- the structural primary balance went from a deficit of 9% of GDP in 2010 to a small surplus in 2013. Calling for tighter policy than the rules warrant makes no sense every single year regardless of the state of the economy. The point is that it does make sense now but the impact is diluted because ‘that’s what they always say’.

Since leaving the EDP (which is not rules based) I cannot recall the Council calling for tighter policy than required by the rules:

June 2015: Balancing these factors, the Council assesses that a policy of following minimum compliance with the rules in 2016 is appropriate.

November 2015: The Budget projections signal an intention to comply with the Preventive Arm of the SGP and the domestic Budgetary Rule from 2016, which is consistent with prudent policy.

June 2016: The projections signal an intention to comply with the Preventive Arm of the Stability and Growth Pact and the domestic Budgetary Rule, which would be consistent with prudent policy.

November 2016: From 2017 onward, the Government’s projected fiscal stance and intention to comply with the EU fiscal rules is consistent with the deficit and debt remaining on a downward path. Provided the economy is growing at a sustainable rate, the use of the available fiscal space as envisaged in the current forecasts would be consistent with prudent policy.

[I was member of the Council since January 2016.]

The issue may be one of the policies implemented differing from the plans announced. The announced plans in Spring/Summer Economic Statements have tended to show compliance and these have been deemed appropriate or prudent. Policy has deviated from these plans through supplementary estimates and the like and these moves have been deemed inappropriate. Maybe it’s “that’s what they always say” (IFAC calling for tighter policy) because “that’s what they always do” (government deviating from plans). I cannot recall any instance of plans showing compliance with the preventive arm of the SGP not been deemed appropriate/prudent. Ireland has not been compliant with the preventive arm since leaving the EDP.

The Council has advocated continued compliance with the Expenditure Benchmark after the MTO has been achieved. This goes beyond the requirements of the SGP but will not be an issue until 2019. All budgetary plans to date have shown compliance with the Expenditure Benchmark after the MTO has been achieved.

“No overheating pressures evident at present but likely if current high growth continues.”

Is there a list of indicators feed into the view on “overheating pressures”?

The concept of “overheating” itself is not clearly defined. The term is used to reflect an economy operating above its potential with a growth rate also above its potential. No economy can grow above its potential for ever. And if something cannot go on for ever it will stop. But how can we say that an economy is operating above its potential when potential cannot be observed [and further in the case of Ireland when getting the level and growth rates is in itself difficult.]

There is no fixed set of indicators that one should look at but recent experience in Ireland suggests that some or all the following are possible warning signs:
– rapid growth in investment and/or consumption
– rising inflation (both consumer and assets)
– below average unemployment
– rising real wage inflation (in comparative terms)
– a reduction in the savings rate
– increasing growth in private sector credit
– deterioration in the current account balance
– falling net international investment position

I would characterise those as tending to be measures of aggregate ‘overheating’ actually occurring, or not.

The reference was to “overheating pressures” being evident, or not.

As you say, ‘overheating’ is a loose term, but “overheating pressure” would be to “overheating” as “force” is to “movement”; and it would be leading.

Aggregate “overheating pressure” can be “overheating” already occurring in parts of the economy.

We have had overheating in construction sector employment in the not too distant past and most analysts now agree that construction employment will again be ramped-up (as a matter of government policy if necessary). I have repeatedly drawn attention to the failure to train sufficient tradesmen for the sector over the last few years, and there has been “overheating pressure” which is beginning to translate into “overheating” in this area.

It has taken a few years for the idea that rising house prices caused by an excess of demand over supply perhaps shouldn’t be encouraged, and that, maybe, more supply is needed. I wouldn’t be amazed if rising rates for trades (and knock-on pressures in other sectors) were similarly initially greeted as just what the economy needs – with the idea of greater supply of people competent to use a hand tool following rather later.

Maybe it won’t affect the aggregates this time.

Correct and maybe “signs of overheating” is better than “overheating pressures”. Using your “force is to movement” analogy we do see housing as something that could lead us in that direction. This summarises our position.

Growth could be higher if housing output increases faster than is implied by the latest forecasts.  If we take the forecasts as being on the basis of housing output being 15,000 last year they imply it will increase in fairly steady increments to reach 30,000 units by 2021. 

There is an ongoing dispute about the level of housing output at present.  We have not gone into the detail of it but 15,000 seems to be at the upper end of the range. It could be around 10,000.  The required output also has a range of figures but something between 25,000 and 35,000 units a year is the general ball park.  

Output has been below the “equilibrium level” for a number of years so output rising to 30,000 would only be enough to cover ongoing demand; it would not be sufficient to meet the excess demand that has built up over the past few years.  To clear that, annual output would have to rise above 30,000 units for a period.

Output may rise much faster than implied by the current growth forecasts and when it does start to rise is likely to rise above 30,000.  Previous research from the ESRI suggests that every 10,000 unit increase in housing output adds one percentage point to GNP growth.  We don’t know if that is still holds but it seems about right.

So, say, output is currently 10,000 and rises to 40,000 within three years.  That is an increase in annual output that is 20,000 more than is currently built in to the forecasts.  That puts two additional percentage points onto GNP growth rates over the period. 

On current forecasts the unemployment rate will be around five and a half per cent by 2019 (and the current drops suggest it could be even lower).  But what will it be if housing output is 20,000 higher than built in to those forecasts?  Where are the workers going to come from?  Are former construction workers now working in other sectors going to move back to construction?  How will they be replaced in the sectors they leave?  Will this lead to upward pressure on wages eroding competitiveness?  Or maybe we can import the workers through inward migration.  But that in itself leads to an increase in housing demand which is the problem we are trying to fix with increased supply in the first place. 

And a large part of this investment is likely to be funded by borrowing by households.  Private sector credit has been contracting since the crash but if it starts to expand that will provide further stimulus to the economy.  Because it is funded by borrowing the increase in house purchases does not necessarily mean a reduction in demand elsewhere and in fact can increase it.  We saw this previously when a large increases in housing investment corresponded to large increases in consumption.  It possibly requires contractionary forces elsewhere to ensure the growth is sustainable.  When the lending stopped in 2008 it wasn’t just housing investment that fell; it was consumption too.  And we simply didn’t have the capacity in reserve in either the public or private sectors to replace that with resources from elsewhere.  Of course, we had to go in the opposite direction and exacerbate the problem through tax increases and public spending cuts while households likely undertook precautionary savings.  This was poor economic management but it is easy to say that in hindsight.

We’re not saying that we’re heading down the same track again – but it is a risk.  There is currently little sign of overheating in the Irish economy.  But we cannot say that this will continue to be the case. 

Issues in the Design of Fiscal Policy Rules | Department of Economics Discussion Paper Series | Working Papers

Published: May 2014. Jonathan Portes. JEL Reference: E62.

Typo Alert: Economics[-]Discussion

p.s. as you know, I take some issue with these atemporal, acontextual, ‘ruules’ … hence this Portes/Wren-Lewi in the biblio caught my eye …

Both Ireland’s previous booms lasted over 20 years (1958/59 to 1981/82) and 1986/87 to 2007/08). It is quite possible that this one will too – which would mean we are only one quarter the way through it. There is absolutely no sign whatever of it coming to an end from internally-generated factors – inflation is negligible, the balance-of-payments is in heavy surplus, government borrowing is very low, debt is falling, house-building is still very much at the low end of its cycle. All this is confirmed by the latest IFC report which sees not a scintilla of a sign of a downturn.

Left-liberal commentators long for a massive economic crash that will sweep the old order away. They thought they had it in 2010-2011 and were devastated when it turned out they hadn’t (something which was easily predictable). Nevertheless, hope springs eternal. They are now prattling on about ‘another housing crash’ and hoping that this will bring the economy down. What contributed massively to the 2008-2011 recession was a fall in new house-building from 85k in 2006/07 to 8k in 2011/12. It is impossible that this can be repeated. In 2017 new house-building was 15k. Even if new house-building was to stop completely (as likely as Leitrim winning the All-Ireland double this year), the effect would be about a fifth of that during the recession. It is far more likely that new house-building will rise in coming years.

Having said that, there is always a possibility of some externally-generated catastrophe causing a recession (e.g. Middle-East war, a massive terrorist attack, Wall Street collapse etc). These are infrequent, but usually impossible to predict.

I know I have asked this question before: went unanswered. So here goes again.

Q (to all economists, incd. those at the ECB; IMF, etc. ) – Do you actually believe that economic growth (aka: Rate-of-Growth) can continue indefinitely in positive values? And if your answer is ‘Yes’ – then please explain. Thank you.

I’m puzzled by Ireland’s apparent, statistically outlying, positive Rate-of-Growth figure. We are a ‘small, open economy’ – and our nearest neighbours, and the US, have all had Rates-of-Growth between +1% and +2% for some time now. Curious. I hope the data is not being ‘massaged’. Its very difficult to have faith in estimates from the team that gave us that 26% Rate-of-Growth figure. And as for – so-called ‘sustainable economic growth’. Its an oxymoron.

Our economy would indeed be ‘growing’ if, within our major employment sectors, the numbers of persons employed in full-time occupations are trending upward, together with a parallel increase in the median wage/salary for those respective sectors. Our quarterly Revenue Returns look a bit dodgy; need careful watching. Those returns must exhibit a steady, upward trend-line in personal income taxes and VAT from retail consumptions. Have they? Are they? Will they?

Another positive ‘growth’ indicator would be that the proportion of the Working-age Population in full-time employment is showing a steady upward trend also. This metric has to be above 56% for it to be meaningful. Above 60% it would indicate a healthy economy.

All increases in residential property prices and rents (in the various segments) greater than increases in median incomes would be a negative economic indicator, as would an increase in personal, corporate and state debt levels. Any increases in interest rates would be very serious. Trend-lines for the appropriate economic estimates would be more informative than a single, ‘naked’ percentage value. I regard G*P (or its surrogates) as a ‘meaningless mean’.

I assume that a ‘deficit’ fiscal position assumes that our futuristical rates-of-Growth will provide the surplus over current expenditures to repay both the accrued principle and compounded interest? Really? Or is just a reprise of – “Roll Along Little Dogie – Roll Along!” The recent tweets from the IMF are not encouraging about the global economic situation being ‘Business as Usual’. Interesting.

Note: the correct reponse to my question above should be ‘No’ – but some other time, as they say.

Q (to all economists, incd. those at the ECB; IMF, etc. ) – Do you actually believe that economic growth (aka: Rate-of-Growth) can continue indefinitely in positive values? And if your answer is ‘Yes’ – then please explain. Thank you.

Indefinitely, Brian? No, the sun will explode some day, and we won’t last that one.

For the next 100 years, while maintaining a reasonable environment? Yes, absolutely. Most economic growth over the past century has not been caused by increased inputs (oil, human hours/sweat, metal) but by improvements in what is loosely defined as productivity, e.g. people working smarter. I see no reason why this cannot continue.

Widespread/universal education lets citizens unleash their intellectual potential and both be more productive and have more occupational choices. (On the one hand, we are nowhere near the utopian ideal of universally equal access to education; on the other, this just means there are large gains to be made.) I am not that long in the tooth (1987), but I can already see vast improvements in primary education since my time there. More generally, I think big data/econometrics will be to public policy what vaccination was to medicine. If/when done right, these improvements are completely economically and environmentally sustainable, and can deliver economic growth for the foreseeable.

To my mind, Keynes’ thoughts on his grandkids’ prospects are still prescient.

Enda, thank you for taking the time to respond. I’ll print-off your reply and add it to my archives. Mind you, I’m not all that convinced by your explanation. But no harm done.

Global economic Rates-of-Growth, when averaged for the last two decades, have declined to almost half of what they used to be for the first seven decades of the 20th century. That really sucks!

The problem lies ahead – so expect our politicians and their purblind camp-followers to continue to chant the latest twit – unable as they are to engage with what is enivitable: a stagnant (zero growth) economy. So. Unless we intend to reduce our annual national deficits in parallell and in proportionate to our declining Rates-of-Growth we shall need QEs ad-naseum – and negative interest rates to match. And how long will that continue for? A goodly while yet.

And TM never got to be MT! Oppps!

Economies operate in cycles and very long ones called Kondratiev cycles. Debt can’t keep growing forever. At a key point in the Kondratiev cycle the UK tends to have a hung parliament.
Debt based systems tend to see productivity improvements paid to capital. This is not sustainable either.

The Irish Government should try to get the debt level down. Trump and Brexit have failed. Neoliberalism is in trouble.

I’m not sure, Joseph. Nowhere do we say that housing output growth should be slowed down. We say “it may be reasonable to expect that housing output could exceed equilibrium levels of output (i.e., annual demand) for some time.” The issue is assessing what this matters for the residential construction sector and the wider economy/society. Extract from page 48.

While unsustainable credit growth may be unlikely to contribute to an overheating economy in the near term, a response to persistent supply pressures in the housing market may do so. Estimates of the number of new housing units required to meet demand due to demographics and new household formation vary quite substantially. Regardless of what estimate is used, however, completions are likely to have been well below estimates of annual demand for some time. Depending on the extent to which supply now falls short of demand levels, this lack of supply may have led to a significant build-up of pent-up demand, which could have contributed to the significant price increases recently observed.

While supply has yet to show strong evidence of a sharp response to potential significant pent-up demand in the residential property sector, if it were to do so, one could see employment and output in the sector increase rapidly. In the 2000s, the rise in labour demand from the construction sector had two impacts. Firstly, the additional demand for labour contributed to upward pressure on wages, thus leading to competitiveness losses. Secondly, as the economy was already at full employment, substantial inward migration occurred to meet this demand for relatively unskilled labour. Given that unemployment is rapidly falling, any substantial increases in construction related employment could tighten the labour market, in a comparable way to that observed in the mid-2000s. If there has indeed been a build-up of demand in excess of any supply response, it may be reasonable to expect that housing output could exceed equilibrium levels of output (i.e., annual demand) for some time. How the housing sector might then return to more normal levels of activity would have a significant bearing on the cyclical position of the economy. Given that construction activity is quite tax rich, significant changes in the construction sector output, as outlined above, could yield large changes in tax revenue, as was the case in the 2000s.

Is this not a view that will resonate with many in this country?


I assume the letter writer, like myself, reacted to the report on the Irish Times the opening lines of which were;

“A sharp increase in the number of new homes being built here over the next few years risks overheating the economy, the State’s fiscal watchdog has warned.
The Fiscal Advisory Council is the latest think tank to warn about the risks posed to the economy from recent trends in housing.”

You are correct, the Fiscal Council, having read the extract, does not say we should not build sufficient houses, but like other public bodies that have commented on how the supply deficiency will be handled (ESRI and OECD), has concentrated on the potential negative economic effects of meeting supply, and has chosen to highlight these potential negative effects. As you know, there are ways to avoid the potential negative effects, including tax increases. But it may be helpful to try to put some guesstimates of the impact of meeting unmet and expected housing demand.

Roughly based on some figures of housing build costs outlined the Ir Times (March 2016, linked), and taking a traditional 50/50 split for material and labour, we get a labour cost of approx €60,000 per completed housing unit (or a little less than 2 labour units per house). This gives a total labour cost of about €1.8 billion for 30,000 houses. It does not appear to be an enormous sum of money, particularly when there is already some (possibly half that number?) level of houses already being built.

Ireland must surely learn to accommodate an additional 50,000 construction workers, in order to meet its own accommodation needs. If meeting housing supply needs causes ‘competitiveness’ problems in some industries, then perhaps some of those industries need a little wage competition. In particular, I have the Dublin hotel sector in mind, a sector not shy of pushing its prices up, as far as possible and as quickly as possible, despite still benefitting from a ‘reduced’ 9% vat rate. Do not such price gouging cause overheating!

Now lets consider the other side of the equation.
According to the latest Daft.ie report (Q1, 2017), it says that
“Across the city [Dublin] as a whole, prices increased by an average of €17,500 in the first three months of 2017 alone and have risen by almost €120,000 in the last five years. ”
Even if one discounts the full €120,000 house price rise, and take an ‘excess price’ figure of 60,000 per house in Dublin, the same 30,000 annual housing build is already putting an ‘excess’ price of €1.8 billion into the hands of somebody, possibly a landowner or developer, or whoever.

Why is a €1.8 billion such an issue if it is made up of labour costs and results in an adequate supply of housing, but is not worthy of comment (in the Ir Times report at least), when it is already landing in the pockets of a small few.

[Some of these people who hoard land, and who are now sitting on land (even NAMA now accept this), can sit CGT tax free on this land for 7 years, for land purchased up to Dec 2014.
By announcing a 50% or 80% CGT tax on such land not sold within one year of the end of the 7 year period, the government would almost immediately encourage the hoarded to unseat themselves from the tax free next egg that they are sitting on.]

I think it would be fairly safe to say that land and ‘development’ ‘cost’ now account for over 50% of the final ‘cost’ of houses of housing in Dublin, yet we rarely warnings from public bodies that such issues be robustly tackled. Why is that?

The comments of the Fiscal Council rightly point to past mistakes, dreadful past mistakes in relation management of the economy, but we cannot allow ourselves to become prisoners of our past mistakes, to the point where we make the mistake of failing to respond to the present day needs of this society.

PS Apologies for delay in replying, but I was so absorbed and enthused with Jeremy Corbyn and Labour’s performance in the UK, that the reply took a backseat, for a while.

The Marshallian invention of the 2D Supply v Demand plot is a very dodgy place to commence any analysis of the divergence between the demand for private residential accomodation (whether purchased or rental) and the process by which residential properties are supplied (constructed) – hence the establishment of an ‘equilibrium’ or Market price. The velocity of Demand far outstrips the corresponding velocity of Supply of physical units – hence ‘price’ is no longer the valid explanatory variable. Its not that demographic changes are not causative – they are.

A more likely proximal cause of Ponzing property prices is the increased availability and affordability of corporate credit. Times were that private residential mortgage credit was limited and prudently dispensed and property prices exhibited a long-term upward trend at a steady 4% p/a, compounding. Not any more. The individual consumer is dead – long live the Funds!

Given his IFAC responsibilities, Seamus deserves our gratitude for being prepared to post here and to respond to commenters’ queries.

It does seem, however, that an enormous amount of effort is being expended and what must be painful contortions being performed to crunch the numbers and mangle the English language to give the impression that the quantification of the fiscal and macroeconomic performance or this weird and wonderful polity and economy (which, essentially, is sui generis) may be subjected to the rules and calculus developed for more conventional economies. And it is even worse when the rules are largely driven by German ordoliberalism and their continuing obsession with the schwarze Null.

In addition to the gentle milking of the Leprechaun economics of the MNC enclave a key objective of highly complex but significantly redistributive taxation and public expenditure policies is to ensure the continuing, if sullen, docility of a majority of voters who are being ripped off by a generally well-co-ordinated and powerful plethora of special interests. This trade-off features in all advanced economies, but the extent of the rip-off is moderated in many situations by the engagement of genuinely adversarial political forces. In Ireland this is replaced by totally ineffectual parliamentary charades. But I suspect that’s the way we like it.

Hi Paul,

IFAC has a dual role – as an advisory body to the Minister and Dept. of Finance and as a watchdog to ensure that the government of the day pursues responsible fiscal policies that will not lead to a breach of EU rules or will likely end up in disaster all over again. But its duty in this latter respect, as I understand it – and please correct me if I am wrong – is limited to pointing out when government and its agents are pursuing a risky course. It cannot impose sanctions on government policy direction beyond issuing a public rebuke. That’s all as it should be in a democracy. What it means in practice though is that the effectiveness of the Council depends on the respect which Government accords to its expertise and to its independence.

The same applies with regard to its economic advisory functions. If the government-of-the-day doesn’t take the Council’s advice ‘seriously’, then it follows that neither the media, nor the public at large, will either. IFAC’s capacity to achieve resonance with the public, and generate public confidence, appears limited both by its design and its statutorily–defined functions. I’m not even sure that it is allocated sufficient resources to enable it to communicate, or engage in public education activities, on the meaning and importance of the exercise of ‘fiscal responsibility’ to the continuing and future welfare of the country (?)

There’s never been a public debate In Ireland about IFAC, or what it does, or what it’s designed to do. It’s generally perceived as something set up as part of our Troika arrangements of the time to avoid a repetition, once recovery set in, of the sort of fiscal profligacy that ultimately resulted in the 2009 crash. It seems to me that there is little sense amongst the public, or the media, that the establishment of a Fiscal Council was something we should set in place anyway in our own self-interest. Unlike similar structures in many EU and other countries, IFAC hasn’t been around long enough yet for its value and purpose to become publicly appreciated.

Thus my own concern would be along a somewhat different line to those you have expressed. Because political authority in Ireland is traditionally overly centralised – a strong executive, weak parliament, and even weaker regional/local structures – independent regulatory agencies, or expert advisory bodies, are constructed to serve a more symbolic purpose than to engage in purposeful activity that might constrain any central government’s political will. We like to set up the appropriate institutions. Thereafter, we tend to ignore them as suits our immediate political priorities.

Recently I attended a conference at which a guest speaker suggested Ireland needed more ‘evidence-based policy making’. All around the room heads nodded in tacit approval. It hardly seemed the right time or place to ask: “So how do you define ‘evidence-based policy’?” Whether it’s to do with matters of science or economics, evidence must have its place. But so far as I know, once it is entered into the realm of policy making, ‘evidence’ assumes a directly political function. For sure, it’s long been recognised that technocracy is incompatible with democratic political systems – nobody could bear to live in one for long, for starters. According to the best scholars in the business, the optimum that can reasonably be achieved is ‘evidence-informed’ policy making. Arguably, in Ireland we’re only at the starting point of know what we mean by it.

As for IFAC, I admire their perseverance and their continued contribution to public debate

Neither bureaucratic ‘rules’ nor a Fiscal Council are necessary for us to achieve a fiscally meaningful position – just the possession of the requisite political testicular equipment and the psychological fortitude to dismiss the usual suspects with their extended Oliver Twist begging bowls and their plaintive wails – “Please Minister, gives us more taxpayers money.” – Political Realism demands and commands that our elected politicians obey . QED.

Middle-class and poorer folk need increasing money incomes (not vouchers nor tax breaks) to continue as consuming consumers. That means continued improvements in waged-labour opportunities (which look quite iffy), with parallel increases in Social Welfare cash payments to match any price increases in necessaries. I’d watch this latter situation closely.

Hmmm.. So all we need is an autocratic strongman to keep us in line? No institutional architecture, nor the rule of law, required to set boundaries on the omnipotent one who knows what’s best for us; which ‘begging bowls’ should be filled and which turned away empty?

I would have thought that ‘the cult of the political strongman (or self-styled ‘difficult’ woman)’ is taking a bit of a battering of late; given the chaos and instability such figures show themselves capable of unleashing within their own societies and.beyond. Never seems to work out all that well, now does it?

Difficult, dirty, messy and dishevelled as it may be, I think I’ll opt for old consensual-style democracy any day; thanks all the same

“Hmmm.. So all we need is an autocratic strongman to keep us in line?”

No. I actually had the Irish Mammy in mind! Put the Fear of God into the waverers, she would – KO! Both my grandmother and mother wielded their wooden-spoons to considerable affect 🙂

Seriously though, fiscal discipline seems to possess the same cache as 70s style bell-bottom trousers: quaintness. How abouts the FC publish a full listing of all the various tax ‘incentives’ that are embedded into the commercial, industrial, agricultural, construction and property sectors of our economy? With an estimate of the tax forgone – or dished out. Might prove a tad inconvenient that might.

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