Speeches start at 1pm; as is now traditional, the whole thing has essentially been leaked to the papers, see here and here for representative samples, there’s also a live stream with the relevant documentation beside it.
Comment moderation is off to simulate the ‘live blog’ thing I still can’t quite get right on this site.
Here is an Analytical Note on the Challenges Forecasting Irish Corporation Tax from staff economists of the Fiscal Council.
Here’s a guest post on the very important potential fiscal costs of climate mitigation by the IIEA’s Joseph Curtin.
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The basic imperative to reduce emissions is easily understood. From March 2015 to July 2016, in each successive month the previous highest global temperature for that month was broken. July 2016 was the warmest of any month on record in the period of historic measurement. Given this record goes back roughly 160 years, the odds of this occurring without man’s input in the form of greenhouse gas emissions is infinitesimally small.
Reducing emissions is a political challenge that is difficult to grapple with, in Ireland as in many other countries. In welcome developments, we now have a Government Department with “Climate Action” in its title, and the newly established citizens’ assembly was given the goal of exploring “how the State can make Ireland a leader in tackling climate change”.
But on the ground there are few examples of “action” and “leadership” to draw upon. There has been no plan to reduce emissions since the previous strategy expired 4 years ago. As we can see from the EPA’s latest inventory report, since the end of the recession in 2011 Irish emissions have more or less flat lined. In fact emissions will probably increased in 2015 (although EPA data have not yet been published) and are projected to continue increasing in the years ahead.
The NTMA are out with a really interesting note here (.pdf). 3 sectors–pharma, manufacturing, and finance and insurance–are responsible for 69.5% of all corporation tax.
Worth contrasting with Paul Tancred of Revenue’s earlier work trying to understand the problem here.
The latest exchequer returns are in, and are a bit down relative to trend and to target month-on-month. From the release:
|
July 2016 Outturn
|
July 2016 Target | Excess/Shortfall (€m) | Excess/Shortfall (%) | |
| Income tax | 1519 | 1522 | -3 | -0.20% |
| VAT | 1766 | 1830 | -61 | -3.30% |
| Corp. Tax | 116 | 139 | -23 | -16.50% |
| Excise | 482 | 507 | -25 | -5% |
| Stamps | 114 | 111 | 3 | 2.30% |
| Capital Gains | 14 | 8 | 6 | 67.40% |
| Capital Acquisitions | 19 | 17 | 2 | 13.80% |
| Customs | 26 | 29 | -4 | -13% |
| Levies | 0 | 0 | 0 | 0.00% |
| LPT | 21 | 23 | -2 | -6.60% |
| Unallocated | 9 | 0 | 9 | 0.00% |
The two numbers everyone will focus on are the 13% drop in customs taxes and the 16% drop in corporation tax.
In terms of money in the door up to July, the State is still up 8.5% on last year, so we shouldn’t be too worried about the supply of sweeties come Budget day just yet. The other important thing to note is just how volatile these data are–they bounce around a lot, and you can read very little into one month’s data. So please, before everyone runs off saying Brexit is killing the Irish economy, it isn’t. Or perhaps more accurately, it isn’t just yet.
Another interesting piece of data shows Irish consumers are a bit put off but unlikely to develop Brexit flu from contact with their nearest neighbour.
While UK PMI data is nose-bleed inducing, the recently-released KBC consumer sentiment index shows that Irish consumer sentiment declined in July, but the scale of the drop was relatively modest when measured beside its UK equivalent, as the chart below shows.
So what do we see? We see a bit of concern, and bit of a wobble, but that’s all, up to now. Hold fire on the pronouncements of doom for a few more months at least.