IGEES Papers and Outputs

The Irish Government Economic & Evaluation Service (IGEES) recently published a summary of papers and other outputs by IGEES economists. This showcases the papers that have been published on the IGEES website from January to December of 2016. While this is not an exhaustive list of the work that IGEES staff undertake, it does show the varied and detailed work that IGEES staff carryout throughout the year.

The summary is available here.

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.

Using Ireland

I see that the government is changing its tone on Brexit and the border, and I welcome this whole-heartedly.

Life is too short to try to figure out what goes on inside the average Brexiteer’s head, but here is my best shot, as it relates to the Irish border.

Economics is all about choices, and consequently I have very little time for people who don’t realise that if, say, you eat a cake, you no longer have it. But as we know, the Brexiteers have refused to admit that their country does, in fact, have real and important choices to make.

In particular, if they want to avoid costly customs inspections, they need to remain members of the customs union. And if they want to avoid all the other border formalities and barriers to trade that existed before 1992, they have to remain members of the Single Market. If they exit both the customs union and the Single Market, this will inevitably reintroduce frictions of various sorts making trade with the EU more costly than at present, and this will remain true even after a free trade agreement is negotiated. For the whole point of the customs union and Single Market was to do away with those frictions.

So they have a choice, and it seems as though they are choosing to make trade more costly between the UK and the rest of the EU. That will have a variety of negative consequences for the UK economy. But to date, the UK government has been incapable of realising or at least admitting publicly that that is the choice they have made, since they are denying that you can’t both have your cake (leave the customs union and Single Market) and eat it (preserve frictionless trade with the EU). Perhaps they sincerely believe this — a scary thought. Or perhaps they just don’t want to admit it publicly, and given the many lies told during the Brexit campaign, you can understand why.

And this is where they hope that Ireland can help them. They tell us, hand on heart, that of course they want to avoid a Border, but what they really want is to leave the Single Market and customs union, and preserve frictionless trade with the entire EU. Which is, as said, impossible. But some of them apparently think that by shedding crocodile tears about the Irish border, they can achieve the impossible — by inducing the EU to turn a blind eye to smuggling across the border, thus undermining the EU customs regime and our consumer, environmental, and other safety standards. And of course, once the nonsense that technology can “solve” all border problems has been accepted in the Irish context, they hope that this will serve as a precedent for trade with the rest of the EU. Indeed, I have seen that argument made quite explicitly in the UK press, but since it’s Sunday I’m not going to spend an hour digging out the relevant quote.

But all that technology can do is lower (not eliminate) the Brexit-induced costs of legitimate UK-EU trade. It can’t stop illegitimate trade, which is why you really need border controls. And so we occasionally read British politicians and commentators tell us that the solution is of course going to involve a “light touch” approach towards smuggling, in effect “turning a blind eye” to it. Such suggestions are not only intellectually unserious, and unethical –since they amount to arguing that we should give a licence to organised crime to print money — but astonishingly politically naive. The UK is dealing with 27 other sovereign, democratic nations who aren’t going to allow their customs regime and regulatory standards be undermined, and their legal order upended, just to preserve the Brexiteers from the embarrassment that awaits them once the UK public figures out that cake, once eaten, is gone.

And so, as I say, I welcome the new tone coming from Merrion Street and Iveagh House. My best guess is that the hardline Brexiteers have never been interested in a special deal for Ireland per se, since they evidently don’t give a toss about the island, but that they have been hoping that Ireland can serve as the key unlocking a very, very special deal for the UK.

A deal so special that it is, in fact, impossible.

And I don’t think our country should let itself be used as the Brexiteers’ useful idiot.

 

 

 

 

Dublin Economics Workshop – Annual ‘Kenmare’ conference

This year sees the 40th Annual DEW Economic Policy Conference. The event takes place on September 22nd/23rd in the Clayton Whites Hotel in Wexford, with the generous support of the Dublin Chamber. On behalf of the organising committee, I am pleased to announce the programme for the event is live and available via this link.

As in previous years, the conference is the premier forum for presentation and debate on the major economic issues facing Ireland. This year, topics covered include Brexit, housing, monetary policy, redistribution and inequality, Public Sector pay and the National Planning Framework. To pick out some highlights:

  • Kevin O’Rourke (of this parish), Frances Coppola, Catherine Day (ex-European Commission) and Rory Montgomery (Dept of Foreign Affairs) on Europe after Brexit
  • A “during dinner” session on the DEW at Forty, highlighting some of the policy wins, failures and lessons from the last four decades – chaired by Sean Whelan (RTE)
  • International perspectives on solving Ireland’s housing crisis, including a presentation from the author of an OECD report on land use
  • A session on Ireland’s tax policy, featuring among others David Bradbury, head of Tax Policy (and BEPS) at the OECD
  • An expert panel discusses Ireland in 2040, with contributions from John Moran (ex-Dept of Finance) and Conor Skehan (DIT and Housing Agency), among others.

There will also be two keynote addresses, one on Friday afternoon (on Brexit) and one on Saturday (as a follow-up to the Ireland in 2040 session). Given the strength of the line-up, we advise those interested to book early as there will be significant demand and places are limited. All bookings can be made via the website: dublineconomics.com. There are a limited number of special all-in fee packages, including 2 nights B&B and 2 dinners, as well as the conference fee, available at the website.

Presentation to MacGill Summer School

Earlier in the week I contributed to a session at the MacGill Summer School on threats to the economy.  My speaking notes for the presentation are here though delivery may have been slightly different.

Conclusion:

We can build 40,000 houses a year, motorways between our regional cities, urban rail connections in the capital, and the roll-out of broadband across the country. We can reduce taxes, increase social transfers and public sector pay. We can spend all the benefits of the surge in Corporation Tax, ultra-low interest rates and the proceeds from the sale of the banks. They are our choices to make. But we cannot do it all and expect the benefits of prudent economic and budgetary management.

No lobby or special interest group sees their request for support as being the one that pushes the economy into the red. And they are right; but we have to watch the totality of what we are doing. If we try to do too much and fly too close to the sun we will fall to earth.

The biggest threat to the Irish economy may not be the decisions of Teresa May or Donald Trump; the biggest threat to the Irish economy are the choices we make ourselves. Let’s make a better fist of getting it right this time.

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.