Housing shortage – whatever happened to the workers?

James Wickham: There’s a lot of building to do: Ireland needs a housing building programme, a renewal of infrastructure, investment in public transport especially in Dublin. Meanwhile, office construction is already growing (count all those cranes). It’s hardly surprising that firms are trying to persuade emigrants to come back home. Who’s going to do the building?

London on the Liffey? Some impacts of the relocation of financial services jobs to Dublin

James Wickham:  Post-Brexit it is widely believed that Ireland will benefit from the relocation of some  financial services employment from London to Dublin.  There are some issues about the type of employment generated by mobile financial services...

Google and the case for broadband investment

Tom McDonnell: It is too easy in these days of high drama on the European stage to forget the fundamentals that will drive our eventual economic recovery. And we will recover provided we make the right strategic decisions.

It was welcome therefore to see this intervention by Google's executive chairman Eric Schmidt. He stated yesterday:
“The thing the Government can actually do that’s hard is [to] work with the telecommunications providers to get more broadband. It’s very difficult for small businesses to do,”

“There are very few things that are better use of your money than long-term infrastructure in information technology that serves the interests of the citizens of the country.”

My own doctoral research has focussed on the development of telecommunications infrastructure in Ireland and there is a wide body of theoretical literature and empirical evidence that backs up Schmidt's claim that 'broadband' matters for a country's growth prospects.

The rate of knowledge acquisition in an economy plays an important role in the long term growth rate of that economy. Broadband internet reduces the costs associated with learning and is a facilitator of knowledge acquisition and diffusion par excellence.

It is what is known as a General Purpose Technology. That is a transformative technology like the steam engine and electricity which affects the entire economy.

And Ireland is a broadband laggard.We are at the bottom of the class with Portugal and Greece.

Fixed (wired) broadband subscriptions per 100 inhabitants in the EU15 and Norway, Iceland and Switzerland (June 2010)
Rank Country Total
1 Netherlands 37.8
2 Denmark 37.3
3 Switzerland 37.1
4 Norway 34.2
5 Luxembourg 34.1
6 Iceland 33.3
7 Sweden 31.8
8 France 31.4
9 Germany 31.3
10 United Kingdom 30.5
11 Belgium 30.0
12 Finland 26.4
13 Austria 23.0
14 Spain 22.2
15 Italy 21.3
16 Ireland 20.3
17 Portugal 18.9
18 Greece 18.7
Source: OECD

A number of factors have hampered broadband development in Ireland, for example, low population density and a geographically dispersed population.

A lack of infrastructural investment by Eircom has also contributed negatively to broadband development in this country. One reason for the lack of investment is that the company was loaded with debt in the years after privatisation. Eircom now has debt levels approaching €4 billion. This was a legacy of Leveraged Buy Outs which the state had made itself powerless to stop.

Eircom's troubled finances will prevent it from investing sufficiently in the future. Although the Government's finances are perilous, the case for state investment in broadband is strong.

House Swap on Ghost Estates

Nat O'Connor The Department of the Environment has published a report into the state of 120,000 dwellings in Ireland's unfinished, 'ghost' housing estates. (RTÉ news report here and report summary here). It will be some time before a full set of solutions are proposed as to how we deal with the surplus houses. And different decisions (knocking them down versus investing in them to make viable communities) will please or displease different sectors in the economy.

I want to suggest is that there are innovative, low-cost solutions available for people trapped on unfinished estates, and we should discuss a wider set of possibilities than are necessarily permitted by a legalistic or bureaucratic mindset. One solution would be to allow people on ghost estates to swap houses. Allow people in unfinished estates the option of moving - cost-free - to a same-size dwelling in another ghost estate. This would be a quick option to create viable communities, where vital infrastructure like sewers, road surfaces and lighting can be finished more cost effectively.

Such a proposal would require the Government to twist the arm of the banks a little, to allow mortgages to be moved from being secured on one asset to another. And stamp duty should be waived on the transaction, and 'first time buyer' status moved, which will require our bureaucrats to be flexible.

I imagine many people living on mostly unfinished estates have massive negative equity. Combined with the unfinished nature of the estate, these properties will be difficult to sell - which lessens people's ability to move after job opportunities or for family reasons. Allowing them to move to estates where the infrastructure is consolidated would relieve all of this.

But the main goal would be to allow people to get on with their lives sooner, and allow them to contribute to society and the economy, without spending years more trapped in 'limbo' (or hell in many cases).

Yet, as well as the administrative issues, one of the barriers to this kind of solution is the lack of any kind of coherent urban policy in Ireland. Our attitude to planning has been as laissez faire as our approach to financial regulation. Hence, the idea that the state could create such a house swap scheme comes up against the mental (but no less real) barrier that 'we don't do that kind of thing in Ireland'.

Just as we belatedly come to appreciate the merits of regulation, we should also begin to seriously consider the need for better urban policy built around the needs of people who are trapped in the many sub-standard built environments that resulted from the last decade.

Running to Stand Still: Next Generation Broadband in Ireland

Donal Palcic: Forfás published its latest report on Ireland’s broadband performance last week and as usual it evoked a strong sense of déjà vu. At times I feel sorry for the good people at Forfás who work on producing such reports, who must be frustrated at making countless constructive policy recommendations year after year only to see little or no progress on their implementation. Every year, the Forfás broadband reports highlight the positive developments in the Irish broadband market but every year they are forced to concede that we are still lagging significantly behind our peers.

A quick trawl through the introductions of reports from the last few years highlights the difficulty Forfás must have in coming up with a new formula of words to describe the same problem:

Forfás Broadband Report Nov. 2004:
“although there have been a number of significant developments in the Irish broadband market in recent years, Ireland continues to compare poorly for overall take-up of broadband and has slipped further behind the leading countries”.

Forfás Broadband Report Nov. 2005:
“although there have been a number of significant developments in the Irish broadband market in recent years, Ireland’s relative performance has not improved”.

Forfás Broadband Report Dec. 2007 (referring to findings of Nov. 2006 report):
“although there had been a number of significant developments in the Irish broadband market in recent years, Ireland’s relative performance continued to lag that of its competitors”.

Forfás Response to DCENR Consultation Paper on NGN (Oct. 2008):
“despite recent progress, Ireland continues to lag behind competitor regions in the range, speed and cost of broadband services. Critically, we also remain behind leading regions in developing a next generation network that will allow Irish businesses and households access to the advanced broadband services of tomorrow”.

Fast forward to the latest report and we are told that “while progress is being made in improving the cost and availability of basic broadband, Ireland is lagging at least 3 to 5 years behind competitor countries in terms of rolling out infrastructure capable of high speed next generation broadband”.

Part of the blame for our consistently poor performance must be laid at the feet of the Government. While it has (belatedly) intervened in the market through various programmes such as the County & Group Broadband Scheme, Metropolitan Area Network programme and National Broadband Scheme, these initiatives, while welcome, are simply not enough. Given the structure of the Irish telecommunications industry and its market and infrastructural characteristics, the Government needs to adopt a much stronger role in implementing effective policies and actions that will facilitate a more rapid rollout of next generation high-speed services.

ComReg also has a role to play in stimulating investment by private telecoms operators in the market. Key actions to facilitate private investment which were highlighted in the latest Forfás report are: 1) ensuring an appropriate return on investment; 2) examining the potential for infrastructure sharing and co-investment between private operators; 3) enabling wireless spectrum for the delivery of higher-speed broadband; and 4) ensuring wholesale access to Eircom’s products is made available (e.g. full local loop unbundling etc.).

While the above ComReg actions are of obvious importance in terms of the development of higher-speed services, Government actions also have a role in determining the speed at which the required private sector investment takes place. As highlighted in a number of Forfás reports, the State can play a significant role in facilitating investment.

The creation of a ‘one-stop-shop’ for State-owned broadband infrastructure would provide private operators with easier integrated access to core network infrastructure and facilitate further competition in the market. This recommendation was mooted years ago, however progress on this initiative has been painfully slow. As it stands the DCENR has established an Implementation Task Force to oversee the project and there is no indication of when we might expect to see it.

Other policy initiatives which have been suggested on a number of occasions and which have not been progressed quickly enough are: 1) making the provision of ducting in all new premises mandatory; and 2) making the provision of ducting in all relevant public works and State infrastructural development programmes mandatory (e.g. electricity, gas, rail, roads, water, sewage etc.). The latter is one area where the coordination of civil works by one utility network with all other networks would greatly lower the cost of investment for all. Indeed, the millions that will need to be spent in fixing the damage done to the road and water networks during the recent floods and cold snap present a perfect opportunity for installing ducting where feasible.

Even if all of the above was implemented tomorrow, it is far from certain that enough private investment in next generation infrastructure (particularly access infrastructure) will be stimulated, especially in rural areas. It may still be necessary for the Government to provide this infrastructure itself, or at the very least to partner with the private sector in delivering it. Failure to do so will put us at a massive competitive disadvantage to other countries in years to come.

The chief area of concern in the development of advanced high-speed broadband infrastructure in Ireland is the local access network. While investment by UPC in upgrading its cable network and investment by other companies such as Imagine in WiMAX technologies have improved things in this regard, these services are only available in certain parts of the country. Eircom’s dominance of the fixed-line market means that investment in its local access infrastructure will be of crucial importance in ensuring a more rapid rollout of next generation services across the country.

Eircom’s new owner, STT, appears to be establishing a more cordial and cooperative relationship with ComReg and has indicated that it plans to invest in Eircom’s network and intends to stay in Ireland for the long term. The recent move to drop Eircom’s legal case against ComReg’s decision to lower the monthly charge for shared line LLU services from €8.41 to €0.77 reinforces the view that the company will be more cooperative with the regulator than under previous owners. That said it is hard to see how STT plans to undertake significant investment in Eircom’s network given its approximate €4 billion debt burden. Indeed, S&P recently put Eircom’s rating of B on ‘creditwatch negative’ and warned that the company could breach covenants on some of its debt in the next year.

The EU has changed its State Aid rules to facilitate joint public-private investment in broadband infrastructure in both rural and urban areas. Governments in other European countries have recognised the importance of investment in fibre-based next generation networks by intervening in their telecoms markets. For example, last year, Finland (a country with a similar urbanisation rate as Ireland) made universal minimum internet access speeds a legal requirement. The Finnish government committed to a minimum speed of 1Mb/s per second from July of this year and 100Mb/s by 2015. Another example is the UK, where the British Government has set up a Next Generation Access fund (to come from a £0.50 monthly levy on all telephone landlines). The approximate £1 billion in funds that the levy generates will be used to facilitate the installation of fibre-optic cable in rural and suburban areas where it might otherwise have been unprofitable for the private sector to invest.

Further afield, the Australian Government has announced a multi-billion fibre-to-the-home project which will provide 100Mb/s connections to 90% of homes over the next eight years. The project is to be run as a joint venture with the private sector where the State will own a minimum of 51% of the project. In Singapore, the Government is providing almost US$500 million for a joint venture project with a private sector company to construct the passive infrastructure for a national next generation broadband network. A further US$166 million in funding is being provided for a separate joint venture with Starhub, a subsidiary of Eircom’s new owner STT, to build and operate the active infrastructure for the national network and will be competed by 2015.

It is clear that other countries realise the strategic importance of high-speed broadband and are taking steps to ensure their countries don’t fall behind. What is worrying for Ireland is that we are already behind many of the above countries as it stands and cannot afford to fall further behind through inaction. While many of the policy and regulatory actions mentioned earlier, if implemented, could do much to facilitate improved private investment in infrastructure, Ireland can ill afford to wait and see if the required investment will take place, and at the required pace. The Irish Government needs to become more proactive and play a stronger role in the development of Ireland’s next generation broadband infrastructure, particularly at the local access level. This requires either direct investment by the State or co-investment with the private sector (Eircom’s dire financial situation could provide an opportunity for the Government to step in and make a deal with the company in relation to its network infrastructure). Maybe then future Forfás reports won’t need to perennially point out that we lag competitor countries in terms of our broadband performance.

League tables and losing the plot

This post was originally written on April 21st in response to an article in the Sunday Business Post. We are re-posting it following last night's Prime Time Investigates programme on social welfare fraud.
Peter Connell: As the Irish economy has spiralled downwards over the past six months, those with an interest in attempting to understand what’s happening and evaluating the solutions being proposed are, at least, being exposed to an increasing informative public discourse. You may not always agree with what economists write as opinion pieces in the national media, over at Irish Economy, here at PE or elsewhere in the blogosphere but, generally, you’re presented with reasoned, well informed arguments that represent genuine attempts to enlighten.

Instinctively when you prepare to read an opinion piece on the solutions to the country’s economic ills by Dr. Ed Walsh, ex-president of the University of Limerick (UL), you know it will be written from a particular ideological perspective. No problem there. We all have ideological perspectives, whether acknowledged or not. Dr. Walsh, since being appointed the first president of UL (then the National Institute for Higher Education) in 1970, has almost four decades of experience of public policy formation in Ireland and has held numerous influential positions in areas key to the country’s economic development including chairperson of the Irish Council for Science Technology and Innovation that advises the government on science policy. So, you could reasonably expect to find some good ideas in Dr. Walsh’s piece in the Sunday’s Business Post entitled ‘Back to when we were winners’.

According to Dr. Walsh it’s all about competitiveness. We were winners in 2000 when we were the fourth most competitive country in the world. Then we ‘lost the plot’. In 2007-8 we were back in 22nd place. And why are we down in 22nd place? The World Economic Forum said the poor quality of our infrastructure was the most problematic factor for those wanting to do business in Ireland. So, does Dr. Walsh identify some innovative ways in which we can fund investment in our infrastructure? Or perhaps he has some insights into how we might convert the significant state investment in fourth level education into innovative, hi-tech enterprises? The strange thing is he doesn’t mention the state of our infrastructure at all and, in this article at least, has nothing to say about the role that technology and innovation might play in growing jobs and creating wealth, an area in which he has considerable expertise. Instead, his piece identifies our overly generous welfare system, high wages in the public sector and failure to tax those on low incomes. Into the mix he adds rigid labour laws, the undue influence of teachers unions in curriculum development and the lack of reform in local and national governance as being the cause of our problems. That’s quite a list. And he backs his arguments up with some figures.

First of all, he suggests that we reduce the size of the public sector workforce by 85,600 to get us back to the level in 2000. Even at the crudest level we can say that, thankfully, we’ve about half a million more people in the country than we had in 2000. That’s about 70,000 more children of school-going age who require teachers in schools that have some of the highest class sizes in the OECD, and it’s up to 40,000 extra older people aged 70 and over who depend on public services more than other sections of the population. In 2000 our health service was just beginning to receive the investment it required to repair the damage done by cuts in the late 1980s. Since then an additional 9,000 nurses have been recruited, but I guess they’re surplus to requirements if we’re to ‘get back to when we were winners’. Certainly, there’s scope to reform the public sector, but not with a demolition ball.

Next up, public sector wages. Dr. Walsh argues that ‘benchmarking against other EU countries provides the framework within which Irish public sector salaries can be brought into line’. He goes on to claim that Irish teachers are paid 37% more than their British counterparts and 26% more than those in Germany. This claim appears to be a quote from Danny McCoy of IBEC writing in the Irish Independent in November 2007. The data is from 2004. But OECD data from 2005 shows something quite different (see pages 384-387). While Irish teacher’s salaries were towards the top of the table internationally, they were lower than in Germany, somewhat higher than in England, but lower than in Scotland. The OECD report also shows teacher’s salaries as a ratio of GDP per capita as a way of assessing the relative value of teacher’s salaries across countries. A secondary school teacher in Ireland with 15 years experience earns a salary equal to 1.2 times GDP per capita. This places the Irish teacher at 14th in the international league table of 30 countries reviewed by the OECD.

Next, Dr. Walsh, pleading the case of high earners, quotes the discredited statistic that the top 6.5% of earners contribute half of all income tax collected, and that 38% of the workforce paid no income tax at all. Colm Keena of the Irish Times, in an article I quoted in an earlier post, presents an alternative perspective on the data on which these statistics are based focusing on individual earners rather than revenue cases. If Dr. Walsh cares to examine the data, he will find that perhaps the most striking fact is that just 9,129 individuals earned €6.7 billion in income, while the lowest 1.2 million earners had an income of €13.3 billion between them.

And now we come to welfare fraud. According to Dr. Walsh ‘welfare fraud and welfare tourism are now a major burden on taxpayers’. And the evidence? Apparently, there are 1,044 welfare claimants at Ballyconnell Welfare Office and the town only has a population of 747 according to the 2006 census. This, he remarks, is an alarming statistic. The source of his information on the number of claimants is a Department of Social Welfare and Community Affairs press release issued by Mary Hanafin. And the implicit aim of the press release is to lay the blame for the doubling of unemployment rates in the border counties on fraudulent claimants.

Unfortunately the situation is worse than Dr. Walsh thinks. The most recent figure for March 2009 is 1,161. This information is readily available from the CSO website, which is generally a more reliable source of information than ministerial press releases. Anyone who has ever dealt with a Social Welfare Office would also know that they serve wide hinterlands, not just small towns. Preliminary research suggests that the Ballyconnell office serves a population of about 14,000. It’s one of two covering the whole of Co. Cavan. Unfortunately there are over 6,500 people now unemployed in the county, many of them young local men who worked in the construction industry.

Dr. Walsh suggests that this welfare tourism is down to our over-generous welfare payments. I suggest he reads Michael Taft’s excellent piece on this topic over at Notes From the Front. Referring to another league table, he shows that we’re in 13th position out of EU 15 when it comes to the level of unemployment benefit paid to a single claimant. Dr. Walsh chooses to compare Irish rates with wages in Lithuania and Romania.

So, unfortunately I wasted seven or eight minutes reading Dr. Walsh’s piece in Sunday’s Business Post. It’s disappointing that one of our brightest opinion formers didn’t do his homework, but presented an argument based on press releases and snippets of information chosen to bolster a particularly extreme view of where we’re at and how we can solve our problems.

In any case I’m not convinced that we should set our sights exclusively on climbing the competitiveness league table. We’re now 22nd. Above us, in 20th place, is Iceland.

How to create jobs

Slí Eile: From a Financial Times editorial (The Luck of the Irish) of 10 August on the current state of the Irish economy:

‘The next few years will be harsh, and the burden of the adjustment will be borne by those least able to cope. Dealing with the fiscal crisis will mean it will be difficult to protect the country’s most vulnerable people. But, as the wreckage of the boom is washed away, older, safer sources of growth will be uncovered.’

Let’s parse this:

‘The next few years will be harsh’

You will search hard to find an industrialised country in the West that has seen a fall of around 15% in national output in the space of two years (2009-2010). Any recovery in global conditions will, most likely, lead to ‘jobless growth’, last seen in this country as we pulled out of the 1980s recession and before lift-off in employment levels in 1993.

‘.. and the burden of the adjustment will be borne by those least able to cope…’

Exactly. That is the whole point of the Dublin Consensus.

‘… Dealing with the fiscal crisis will mean it will be difficult to protect the country’s most vulnerable people.’

In other words, per the Dublin Consensus, There-Is-No-Alternative line, either because the political progressive wing is too weak in electoral terms (or too divided in terms of what to do), or because a rapidly shrinking cake means some adjustment in real income of social welfare recipients. This is the nub of the McCarthy et al argument – incomes have fallen all over the place – it is only inevitable (and fair?) that the incomes of those at the bottom of the income distribution should take a hit.

‘…. But, as the wreckage of the boom is washed away, older, safer sources of growth will be uncovered’

Interesting point which challenges us to think about how recovery can be generated. What will be these ‘older’ and ‘safer’ sources of growth – more foreign direct investment in pharmaceuticals, information technology? Back to horticulture and wind power? Or, green agriculture and food? New manufacturing technologies? New types of services? A reformed and re-equipped public service ready to deliver a better service?

We need to start thinking this through. For all its limitations and vagueness, the ‘Smart’ Report (remember?) of December 2008 contains some useful ideas particularly in regard to new sustainable technologies.

In previous contributions to this debate, Paul Sweeney, Jim Stewart and Sean O Riain have pointed to the importance of high value added, innovative enterprises as the mainstay of industrial policy. Key to this is an innovation-rich environment, with universities, research institutes and state agencies all providing support, skills and knowledge. We will still need foreign direct investment but we need to give much more attention to growing indigenous enterprises trading on home and world markets.

The State has a vital role to play in providing a more rigorous regulatory environment, as well as a complete overhaul of banking and finance. The Property-Financial-Political Complex has been dealt a blow and is on the floor. Let’s make sure that it doesn’t resume business ever again. Somehow, I fear that the lessons of history are often missed for lack of proper analysis and understanding.

In reference to the McCarthy Report, in the Irish Times on 10 August, Chris Horn of Iona Technologies (Our economic future lies with innovative exporters) said:

However, while the report tells us where we can cut back, it has not told us where we could focus our investment for recovery. In all the hubris and grappling for position after the publication of the McCarthy report, I have been surprised by the absence of public discussion on just how we now expect to drive growth in our economy.

The nub of his argument (in contrast to the strategy of relying on the safe, old and big investors) is that we should be focused on creating a culture and environment of a very large number of innovative, export-led companies at the heart of our new economy.

I agree. I would argue that we need to defend the income of those in relative, and especially consistent, poverty through a Basic Income for all citizens and residents, while at the same time, using fiscal policy to redistribute income and wealth, while at the same time using a reformed state infrastructure to enable private and public firms to compete on the basis of new ideas, technologies and markets.

That's the business of any future Government committed to economic development and social justice.

STT bid for Eircom

Donal Palcic: The fifth change of ownership of Eircom now appears imminent with Singapore Technologies Telemedia (STT) very likely to make a deal to acquire the company in the coming days. While STT's latest offer price is not known, it is unlikely to be significantly higher than its original bid of just under €110 million given the scale of Eircom's debt that it would assume.

The STT bid was backed by Eircom's ESOT who favoured an industry player over other private equity investor bids. The hope is that an industry player will make a long-term commitment to the company and invest in Eircom's ageing network.

Since STT's bid for Eircom now appears inevitable, and a Government deal to acquire Eircom's network infrastructure which I argued for in a previous post is now wishful thinking, what will now happen to one of our country's most strategic assets is very much up in the air.

While the hope is that STT will make the required investment in Eircom's network infrastructure, STT is a commercial operation that will demand a return on its investment. It is also taking on an enormous amount of debt. It is therefore hard to see STT investing on the scale (and at the speed) required.

The Government still has an important role to play in the development of our national telecoms network assets. It needs to maximise the use of its current fragmented portfolio of assets by amalgamating their ownership/management and providing 'one-stop-shop' access to these assets on an open wholesale basis. Creating a State-owned telecoms network utility to manage these assets would seem like the best option to achieve this. The ownership of any newly built infrastructure (ducting laid down as part of road construction and other civil engineering projects) should also be transferred to this new network utility company. In addition, the company could itself invest in infrastructure in areas where it deemed it necessary, removing the need for the Government to foot the bill for projects such as the MANs.

Sadly, I fear that the Government will keep following its 'do minimum' and 'let's wait and see what happens' approach, Eircom's new owners are unlikely to invest heavily in its network, and Ireland's telecoms infrastructure and broadband services will continue to fall further behind her European peers.

Growing up about taxes

James Wickham: Maybe it’s time to grow up about taxes.

One feature of the Celtic Tiger years was the way in which Ireland’s role as a low tax economy became part of the national identity. This led to the absurd situation in which the Labour Party could claim that it supported the ‘right’ of Ireland to have a lower corporation tax rate than other EU member states. In other words, the Irish Labour Party defined itself in Europe as the Social Dumping Party.

There are several important consequences of this low tax mantra.

Most obviously, it contributed to the situation in which the major inheritance of the boom will be just a pile of rusting SUVs – of private goods that will deteriorate, not of public goods that will last. Historically Ireland missed out of the post World War II boom years (the ‘trente glorieuses’). These were marked by substantial social investment and the creation of the physical infrastructure of the European welfare states. By contrast, our boom involved relatively little public investment. Let’s be honest. Compared to ostensibly poorer European countries, our public infrastructure is pathetic. This is most obvious in public transport, but the same is broadly true in health, education, etc.

Because we have accepted that taxation is inherently bad, we have allowed a continual denigration of the notion of public service. On the one hand, we have denied that many people work as nurses, as teachers, as civil servants etc. partly because they actually want to do something more useful than just earning more money for private consumption. On the other hand, we have accepted that the public sector is inherently inefficient. Consequently, despite all the rhetoric of partnership, the public sector unions have never become the champions of an effective public service. All too often, opposition to changes that would produce a better service has come from the unions themselves. Take the current conflict in Dublin Bus. Despite the efforts of some rank-and-file busworkers, the conflict over the cutbacks has been posed entirely as about employment. The unions have not taken any stance about the deterioration of this crucial public service that the cuts will involve.

The rhetoric of low taxation is linked ideologically to that curiously ambiguous person, ‘the taxpayer’. In a market society virtually everyone does, of course, pay tax. However, a discussion of public policy based on ‘the taxpayer’ is rather different to one based on ‘the citizen’. For example, whereas all citizens are equal, taxpayers differ in terms of how much tax they pay. So presumably those who contribute more should have more say in how ‘their’ money is spent. And the belief that taxpayers give ‘their’ money to the state ignores that ‘their’ money could only have been acquired thanks to the state and the wider society. Even the super-rich use public goods and depend on some residual social solidarity for their very existence.

Finally, the low taxation mantra was a crucial part of the PD project to move Ireland closer to Boston than Berlin. One subterranean theme in the Lisbon referendum was that ‘we’ didn’t need those snotty Europeans any more. Whereas, after 1973, membership of ‘Europe’ made Ireland less and less an island behind an island, the boom years then made Ireland more and more firmly part of the Anglo-Saxon world. Maybe it’s time to move again?

Professor James Wickham teaches in the Department of Sociology, TCD