Forecasting the Future.

Paul Sweeney makes some forecasts for 2016.

No one had forecast that Ireland’s growth rate would hit 7 percent in 2015. No one. So making predictions for 2016 is a mug’s game but like most economists, mine are projections based on previous trends. They do not predict shocks. 

Have yourself a casual Christmas: 21st century ‘entrepreneurs’ and bogus self-employment in the Irish construction sector

Alicja Bobek: For the majority of us across Ireland, Christmas means holiday. It is a festive season, providing us with a few days that we can spend with family and friends. Most of us will also be off work while being paid in one form or the other. At the moment, more than 90 per cent of Irish working population is classified as ‘employees’, which means that they have their holiday time guaranteed by law.

Neither Boston nor Berlin?

David Jacobsen: The main front page article in last week’s (20/12/2015) Sunday Business Post begins with Enda Kenny’s promise “to cut tax bills for households to bring them in line with ‘lower tax’ countries such as the US and Canada”. The particular target for tax cuts is the high earner bracket, where in Ireland the effective tax rate is 45% while in the US it is 29%.  It seems that we are back to that old dilemma of ‘Boston or Berlin’, with Fine Gael firmly in the Boston camp.

Do we seriously want to make Ireland like the USA?

James Wickham: In a recent speech the Taoiseach stated that he wanted taxes in Ireland to be as low as those in the USA.  Why?  Allegedly this will ensure more jobs are created.  It is in fact quite astonishing that in 2015 the USA can still be held up as a model in this way.

Mortgage arrears crisis remains unresolved with possibility of up to 30,000 repossessions

Rory Hearne: Despite the recent Central Bank figures showing a decline in mortgage arrears there are still 37,000 mortgages for a principal dwelling (home) in arrears for over 720 days. The mortgage arrears crisis remains unresolved and continues to cause a huge amount of suffering to those affected. This blog provides an overview and analysis of the current situation based on the Central Bank figures in order to understand better the extent of the on-going crisis.

NAMA Part II: In order to solve housing crisis the government should redirect NAMA to prioritise its social mandate

Rory Hearne: NAMA presents a rare historic opportunity for the Irish people to provide affordable housing on a sustainable, equitable and well-planned basis to meet the needs of its people rather than speculative investors. This post outlines a number of possible ways that NAMA should be redirected to address the housing crisis.

NAMA Part 1: The Christmas gift from the Irish taxpayers to the super wealthy and vulture funds

Rory Hearne: Tis the season for 'good will' and 'giving' and all that but NAMA is giving away too much from Irish taxpayers to property vulture funds and speculators. Last week NAMA outlined how it intends to provide 20,000 ‘starter’ homes by 2020 and invest €1.9bn in Dublin’s Docklands.  But these so-called ‘starter’ homes will be sold to the international vulture funds who currently see Irish property as the ‘hottest’ investment in Europe. NAMA actually has the land and finance to provide 50,000 homes over the next decade. The Minister for Finance should order NAMA to move away from speculative office and residential development with global financial investors to focus instead on providing affordable housing.

The Paris Agreement: a major step forward or ‘worthless words’?

Paedar Kirby: Amid the widespread welcome for the Paris Agreement, what is striking is the lack of consensus on just how significant it all is. James Hansen, former head of the NASA Goddard Institute for Space Studies in New York and regarded as one of the world’s most eminent climate scientists, went so far as to call it “a fraud, a fake, worthless words” while Cara Augustenborg, chair of Friends of the Earth Ireland, said in Paris that “the gap between ambition and action in the deal is too big.” So should we welcome or denounce this long-awaited global treaty?

Lucky to have job? Research highlights bad working conditions in hotels and restaurants

Alicja Bobek: Hospitality has always been an important part of the Irish economy. As the labour market recovers from the recent recession, jobs are growing in the accommodation and food services sector around the country. By the second quarter of 2015 there was a total of 136,700 people working in this sector, 20,000 more than at the lowest point in 2011. While this job creation is obviously to be welcomed, there is a question about the quality of these jobs.

Flat tax maths doesn’t stack up

Cormac Staunton: The debate on flat taxes arose again this week with RENUA promoting the idea of a flat income tax model for Ireland. They invited me to speak at a symposium they held in order to discuss the proposed model. While I now have a few more details from them, and it is not quite as regressive as I had initially calculated, nevertheless my assessment remains that this model would dramatically increase inequality in Ireland.

Prevention is better than cure – tackling corruption as a health risk to our democracy

Nuala Haughey: In the wake of this week’s RTÉ Investigations Unit programme on standards in public office, there have been renewed calls for a host of legal reforms. These include the establishment of a properly resourced anti-corruption body with full police powers, the appointment of an independent Planning Regulator and the long-overdue overhaul of our toothless ethics ‘watchdog’, the Standards in Public Office Commission.

CoP21: Might Paris begin the long road to a low-carbon society?

Peadar Kirby: The fact that the world’s leaders turned up at the beginning rather than at the end, as happened in Copenhagen in 2009, seems to have galvanised action during the first week of the Paris CoP. Leaders such as Presidents Obama and Holland made plain the gravity of the crisis facing humanity and the urgent need for action, both pledging their countries would be at the forefront. The contrast with the Taoiseach, Enda Kenny’s attempt at special pleading for poor Ireland couldn’t have been sharper. It was a moment for Irish heads to hang in shame.

Inversions as a Tax Strategy - Implications of Ireland

Jim Stewart: The recent announcement by Pfizer that it is taking over Allergan and establishing their joint ‘headquarters’  in Ireland is another illustration of complex corporate tax strategies.  Moving headquarters to a low tax regime in order to minimize tax has become a well known phenomenon. Corporate inversions have a long history as a tax strategy.

Diversions and Inversions: Some Implications of Corporate Tax Strategies

Jim Stewart: The announced takeover by Pfizer of Allergan and consequent redomicile of Pfizer to Ireland has attracted enormous international media interest. Much of this comment is critical of both Pfizer and Ireland.  This blog considers one aspect of Pfizer and MNE tax strategies, that is switching profits away from or to a tax jurisdiction (Tax Diversion).  A further blog tomorrow will discuss inversions as a tax strategy, and some possible implications of the Pfizer transaction.

Troubling levels of inequality within economic recovery

Rory Hearne: There has been much debate in recent months about economic inequality. Last week’s Survey on Income and Living Conditions by the CSO reveals some very worrying trends that show Ireland is a deeply unequal country and that that level of inequality is worsening despite the economic recovery. The share of income going to the top 20 percent in Ireland has increased each year since 2011 and is now back at pre-crisis levels.