Speaking Truth to Power(lessness)

One of the more remarkable episodes in the recent French presidential election, and with wider lessons, was a heated debate in Amiens between Emmanuel Macron and workers at a Whirlpool factory under threat of closure.

While Macron was holding talks with city and union leaders in the chamber of commerce, Madame Le Pen arrived unexpectedly outside the factory gates, took a number of selfies with workers, promised unspecified special measures to save the factory, denounced Macron and was driven off in her election bus.

After his meetings, Macron arrived at the same factory gates to face booing and jeering and cries of ‘Le Pen for President’. After explaining why he had met the leaders ahead of the workers (because, he said, leaders of a trade union that behaves responsibly should be engaged with), he promised to answer all questions, and he did for an hour. The following is my attempt to summarise the subsequent questions and answers; it involves some rearranging.

Q: Why don’t you close the French border, for instance to imports from Poland where wages were low.
A: I won’t close the borders or roll back globalisation because it will cost French workers thousand of jobs if they work for firms that need to be able to export.

Q: There no work, it’s too late for us to find other work, we are unemployable.
A: Absolutely not true. There is work but it is different work and it requires retraining.

Q: Why are companies allowed to pay dividends at the same time as they are closing factories?
A: Stopping dividends, or banning factory closures is not possible. It would end foreign investment into France, and all the jobs those investments bring.

Q: Our factory needs special measures.
A: It is the responsibility of the workers and managers to make a success of the business. It’s not the responsibility of the Finance Minister, who should firmly and even-handedly apply policies and laws that support long-term economic development. Even with the best policies and laws, unfortunately some factories will still close.

Macron’s reaction to almost every single thing said to him is an impassioned ‘Non, non, non.’ It is difficult to think of other examples, anywhere, of a politician, during an election, in front of the television cameras, telling voters he would not do what they asked because it would not be in their interests, but would instead support the policies the voters blamed for their difficulties. I won’t do things that won’t work, he says at one point. That’s not the policy I support, he says at another.

45 minutes of the discussion is to be found on the last video link on this page of the En Marche! party website. The first 9 minutes is an argument over why Macron went first to the chamber of commerce, and why he waited until the second round of the election to visit factories such as Whirlpool’s; the policy debate begins after that. In parts of the recording, Macron plunges into the crowd and the exchanges can’t be heard very clearly.

Database of Irish Non Profits

This is a guest blog from Benefacts.ie’s MD Patricia Quinn.

There’s no tag on the Irish Economy for “nonprofit” or even “charity” – maybe a symptom of the almost total lack of data until now on the organisations that make up this sector in Ireland. Hopefully, this is about to change.

Since 2015, Benefacts has been drawing on a variety of open data sources to create a dataset of unprecedented currency, granularity and reach. The Database of Irish Nonprofits is derived from all of the files placed in the public domain by ~20,000 organisations that would be classified by by statisticians as “NPISH” – nonprofit institutions serving households. According to Eurostat:

“Non-profit institutions serving households, abbreviated as NPISH, make up an institutional sector in the context of national accounts consisting of non-profit institutions which are not mainly financed and controlled by government and which provide goods or services to households for free or at prices that are not economically significant. Examples include churches and religious societies, sports and other clubs, trade unions and political parties.

NPISH are private, non-market producers which are separate legal entities. Their main resources, apart from those derived from occasional sales, are derived from voluntary contributions in cash or in kind from households in their capacity as consumers, from payments made by general governments, and from property income.”

http://ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:Non-profit_institutions_serving_households_(NPISH) consulted on 08/08/2017

A simpler way to think of this set of organisations is: all those that are neither part of the private sector, nor part of government.

Database scope

Some are charities, some are not – either because they are explicitly excluded from the definition in law by the Charities Act, 2009, or because they haven’t got around to registering yet.

About half are incorporated, mostly under the Companies Act (as CLGs), although there are also hundreds of industrial, friendly or provident societies including trade unions, and a handful that were incorporated by statute, some of them – like some major voluntary hospitals – prior to the foundation of the State. There are also thousands of church or faith bodies, as well as sports, cultural and recreational clubs, societies and associations.

The number of ~20,000 includes all of those nonprofits that are registered with and required to return information to at least one national public authority – the Companies Registration Office, Revenue (for tax relief as charities, schools or sports bodies), the Charities Regulator, the Library of the Houses of the Oireachtas. Many thousands more are not included on national registers but are governed by national bodies (for religion, sport etc) – hopefully for future inclusion in the Database.

Having identified its scope, Benefacts harvests data every day from multiple public sources, sometimes availing of open data files and – for financial and governance data – extracting it manually from financial statements and other regulatory filings. Benefacts doesn’t ‘scrape’ other peoples’ websites, but we do add some additional information including a classification (following Eurostat norms), the URL of each nonprofit, and information about compliance with some voluntary codes. This model, which is co-funded by government and philanthropies, means that there’s no effort required of any nonprofit to be included.

Accessing the Database of Irish Nonprofits

To see who’s in the Database, have a look at the open datasets generated by Benefacts from the data derived from these public sources.  This is updated every day on data.gov.ie. The list is sortable by

  • Registered name(s)
  • Benefacts classification
  • Address
  • Eircode
  • County
  • Name(s) of authorities by which the nonprofit is regulated
  • Regulatory number(s)
  • Link to each nonprofit’s listing on Benefacts.ie

A free public website – benefacts.ie – provides user-friendly access to extracts from the currently available data and public files on each listed nonprofit, there’s a public API that allows users to download the same information as a data feed, and a new customised service for institutional users to support governance, risk and compliance analysis (Benefacts Analytics). Users in government like the CSO, the Charities Regulator, IGEES analysts and internal auditors have had bespoke reports with more granular data extracted from financial statements (balance sheet, I&E, notes to the accounts), reflecting their particular requirements.

What does the data tell us?

Earlier in 2017, using the full population of available data, we published the first in an annual series of reports analysing the nonprofit sector in Ireland. We intended this as a billboard, drawing public attention to some of the main features of the sector, and starting to explode some myths.

The Irish nonprofit sector is hidden in plain view. It employs 150,000 people, and has an aggregate turnover of €11bn, only 18% of which is derived from government grants. Service fees from Government account for 31% of the sector’s revenues – mostly in the health and social services sub-sectors – but only 2,700 nonprofits rely on government funding of any kind. Remuneration data available for the first time in 2015 under FRS102 indicates that only 0.5% of people working in independent nonprofits – excluding those where salaries are pegged to governmental paygrades – receive annual remuneration of more than €70,000: this compares to 12.8% of people in the population at large.

This is all very interesting, but it is only scratching the surface. Since 2015, Benefacts has been harvesting extensive financial and governance data from the financial and constitutional documents of thousands of nonprofits, and socialising the data on various platforms.

The nonprofit sector will continue to be the Cindarella of the Irish economy until such time as the Database of Irish Nonprofits starts being used by economists who will put our dataset in the wider context. Where is Prince Charming?

Developments in enterprise credit in Ireland

The Bank published the 2017 H1 edition of the SME Market Report last week.

Highlights from the report include:

  • Gross new lending to non-financial, non-real estate SMEs continues to grow. Annualised new lending to Q1 2017 was €3.6bn, a 32 per cent increase since Q1 2016. By way of context, between 2010 and 2013 this number ranged between €2bn and €2.5bn.
  • Despite this growth in new lending, the outstanding stock of credit to SMEs continues to contract. In Q1 2017, the stock of SME credit declined to €16.6 bn, down 8.2 per cent from the previous year. This reflects the fact that loan repayments, loan sales and liquidations are still more than offsetting new lending flows.
  • The SME lending market remains highly concentrated, with the market share of the three main lenders in new bank lending flows being 82 per cent.
  • The current application rate for bank finance is 20 per cent, which is lower than at any point since 2011. However, the share of these applications going to new loan and overdraft facilities continues to grow, while the share going to renewal and restructuring of existing facilities continues to fall.
  • The rejection rate on SME loan applications has risen slightly in the last year for Micro and Small firms, but continues to fall for Medium-size firms.
  • The default rate on SME loans in Ireland is currently 18.7 per cent. This rate is highest in the Construction and the Hotels and Restaurants sectors, while it is lowest in the Agriculture, Manufacturing and the “Other Community, Social and Personal Services” sectors.
  • Irish SMEs continue to pay a significantly higher interest rate on bank credit than other euro area SMEs. The premium paid on small versus large loans in Ireland also continues to remain significantly higher than that in comparator countries.

Link to the report can be found here.

Free-to-air Broadcasting and the GAA

The evolution of the modern sports league is directly linked to the growth of broadcasting revenue in sport. While many see sports broadcasting as a public good, since the late 1980s there has been a general migration towards subscription-based, satellite channels. The emergence of satellite broadcasting changed the position from one where content competed for scarce distribution outlets on terrestrial television, to one where there is an abundance of spectrum competing for scarce content. The general improvement in broadcasting technology and changes to the regulatory environment have aided this movement, allowing for restricted access.

Like all sports, the GAA has adapted to this evolution. In 2014 the organisation sold broadcasting rights to BSkyB, with 20 matches shown on its Sky Sports channels, 14 of which are exclusive. The continuation of this deal to 2022 has been argued on the grounds that it promotes the game internationally and provides coverage to Irish emigrants.

Not everyone is happy with this. Speaking on The Sunday Game, RTÉ hurling analyst Michael Duignan said that “the biggest disgrace of the weekend was on Saturday evening, that the Waterford-Kilkenny wasn’t shown on free-to-air television”. He continued: “The Sky deal is so wrong on so many levels and it’s not because I’m in RTÉ working for the Sunday Game. My parents are at home. My father is 83 years of age. A savage hurling man. Why should he go to the pub? He doesn’t go to the pub to watch a match. They have enough money in the GAA. How much money do they want? What about the people who have supported it all their lives that can’t watch it? I think it’s disgraceful.”

The Broadcasting (Major Events Television Coverage) Act 1999 (Designation of Major Events) Order 2003 and Broadcasting Act 2009 do prevent “events of major importance to society” from migrating to subscription channels. The following are considered to fall under this category:

• The Summer Olympics
• The All-Ireland Senior Inter-County Football and Hurling Finals
• Ireland’s home and away qualifying games in the European Football Championship and the FIFA World Cup Tournaments
• Ireland’s games in the European Football Championship Finals Tournament and the FIFA World Cup Finals Tournament
• The opening games, the semi-finals and final of the European Football Championship Finals and the FIFA World Cup Finals Tournament
• Ireland’s games in the Rugby World Cup Finals Tournament
• The Irish Grand National and the Irish Derby
• The Nations Cup at the Dublin Horse Show

The Act also states that “Each of Ireland’s games in the Six Nations Rugby Football Championship is designated as an event of major importance to society for which the right of a qualifying broadcaster to provide coverage on a deferred basis on free television services should be provided in the public interest”.

In theory, far more could migrate to subscription platforms, including all provisional finals and the All-Ireland Quarter-Finals and Semi-Finals. While this is unlikely to happen, it is possible. After nearly 60 years waiting, I am sure every Waterford fan would say Saturday night’s game was of “major importance”. Those north of the Suir will obviously argue otherwise.

Summer 2017 Economic and Social Review

The summer 2017 edition of the ESR is now on-line, including the following articles:

Brendan M. Walsh (1940-2016): The Economist at Work
by J. Peter Neary and Cormac Ó Gráda

Life Expectancy in Ireland since the 1870s
by Brendan Walsh

Civic Returns to Education: Voter Turnout in Ireland
by Yuanyuan Ma

Integrated Modelling of the Impact of Direct and Indirect Taxes Using Complementary Datasets
by Michael Savage

and a policy article on
If Opportunity Doesn’t Knock, Build a Door: Reflecting on a Bioeconomy Policy Agenda for Ireland
by Laura Anne Devaney and Maeve Henchion