Showing posts with label tasc. Show all posts
Showing posts with label tasc. Show all posts
Thursday, 5 July 2012
Investment strategies and economic recovery
TASC hosted its third lunchtime seminar yesterday. Tom Healy, Director of the Nevin Economic Research Institute, gave an interesting presentation on 'Investment Strategies and Economic Recovery', which is available for download here. Comments?
Thursday, 14 June 2012
Innovation policy and perfomance in Ireland
Sinéad Pentony: TASC hosted its second lunchtime seminar yesterday. Professor David Jacobson examined the issue of innovation policy and performance in Ireland, which is based on work that David has been doing for TASC on the wider issue of industrial policy, which will be published in the coming months. The presentation included a critique of innovation policy and highlighted the fact that innovation is much more than R&D; that low R&D industries may be major users of results of R&D generated elsewhere; and that low R&D industries may also be innovators. The presentation also provides a very useful assessment of Ireland's performance as a researching country by examining the international evidence.
Tuesday, 22 May 2012
TASC submission on unemployment
Sinéad Pentony: In a submission to the Oireachtas Committee on Jobs, Social Protection and Education, TASC has looked at a number of key questions.
The submission provides an overview of unemployment, which clearly illustrates the scale of the crisis and who is being most affected. There are clear inequalities in the labour market within and between generations. Those previously unemployed in craft and related areas represent over one third of those who are on the live register and this group is more likely to have lower levels of education and skills. Almost one third of young people are unemployed. The reasons for this include a lack of jobs, low levels of education and training coupled with limited work experience and the fact that young people are more likely to lose their jobs in economic downturns.
The submission also considers the measures that Government is taking to address the problem, which includes reform of labour market activation policy – Pathways to Work, and the Government’s Action Plan for Jobs. These measures include some long over-due reforms, but they will not address the unemployment crisis, as it is primarily a demand-side problem – the demand for labour is less than the available supply of labour and addressing this issue requires a targeted programme of investment and economic growth.
Finally, the submission considers the issue of youth unemployment and puts forward a number of recommendations that include improving the quality of existing policies aimed at providing young people with valuable work experience and training; assessing the feasibility of providing a ‘Youth Job Guarantee’; assisting young people to become entrepreneurs; and targeted education and training initiatives aimed at young people with no formal qualifications.
The submission provides an overview of unemployment, which clearly illustrates the scale of the crisis and who is being most affected. There are clear inequalities in the labour market within and between generations. Those previously unemployed in craft and related areas represent over one third of those who are on the live register and this group is more likely to have lower levels of education and skills. Almost one third of young people are unemployed. The reasons for this include a lack of jobs, low levels of education and training coupled with limited work experience and the fact that young people are more likely to lose their jobs in economic downturns.
The submission also considers the measures that Government is taking to address the problem, which includes reform of labour market activation policy – Pathways to Work, and the Government’s Action Plan for Jobs. These measures include some long over-due reforms, but they will not address the unemployment crisis, as it is primarily a demand-side problem – the demand for labour is less than the available supply of labour and addressing this issue requires a targeted programme of investment and economic growth.
Finally, the submission considers the issue of youth unemployment and puts forward a number of recommendations that include improving the quality of existing policies aimed at providing young people with valuable work experience and training; assessing the feasibility of providing a ‘Youth Job Guarantee’; assisting young people to become entrepreneurs; and targeted education and training initiatives aimed at young people with no formal qualifications.
Thursday, 16 February 2012
TASC issues new report on State Assets
Click here to download TASC's new report, The Strategic Role of State Assets - Reframing the Privatisation Debate. Comments?
Thursday, 8 December 2011
A Roadmap to Greater Inequality: TASC response to Budget 2012
TASC's response to Budget 2012, A Roadmap to Greater Inequality, is available for download here.
Friday, 25 November 2011
Who will pay more and who will be protected in Budget 2012
Sinéad Pentony: Budget season is well and truly underway and the slow drip feed of information and kite flying continues. The broad thrust of the fiscal adjustment is presented as a fait acompli – ‘we have no choice’ but to continue on the long hard road of austerity, with those least able to absorb reductions in income and access to essential services being faced with bearing the brunt of the adjustment. TASC and others continue to point out that there is an alternative and this involves ensuring that those who can afford to make a greater contribution to the adjustment are made to do so.
Once again, child benefit appears to be in the firing line and it's filling plenty of column inches. There are also plans for a range of other savings across the Department of Social Protection In the area of health, the proposals being considered include the imposition of an annual fee of €50 for medical card holders along with increases in other user health charges covering prescriptions and access to A&E services.
Even if only some of these proposals make their way into the budget, when they are combined with the confirmation that the main rate of VAT will be increased by two percentage points, this year’s budget is looking very similar to last year’s budget.
In contrast to the debate about where the cuts should be made and by how much, last week Revenue provided details on the amount of tax that was collected through the ‘domicile levy’. This levy of €200,000 was introduced in Budget 2010 on Irish people who are domiciled in Ireland but non-resident for tax purposes. The levy is applied to individuals whose income and assets exceed certain thresholds.
Revenue reported that less than €1.5 million was collected and this was based on a average return of €147,000 by ten individuals who are liable for the levy. The returns are made on a self-assessment basis. Revenue also estimated that, in 2009, there were almost 6,000 individuals who were classed as non-resident for tax purposes and that 440 of these were considered to be very wealthy.
By anyone’s standard,s the domicile levy has failed to ensure that this particular group of Irish people is made to pay their fair share as part of the adjustment. The question is - will the up-coming budget send a clear message that this situation is not going to be tolerated any longer and that other measures are going to be put in place to ensure that the wealthiest Irish people will be made to contribute to the fiscal adjustment on a more equitable basis?
The Community Platform's taxation proposals have highlighted the types of measures used in other countries to tax wealthy non-residents – the US citizen-based tax and the French tax on global assets. The TASC proposals also include measures to increase the level of taxation on assets and passive income from assets held in Ireland, along with reducing the number of days that non-residents can be present in the State from 183 to 90 days.
The economic and equality arguments have been well rehearsed at this stage for targeting taxation measures high earners residing both inside and outside the country. TASC’s Equality Audit of Budget 2011 clearly illustrates who was made to pay more in the last budget. It will come down to the political choices and priorities in relation to who will be made to pay more and who will be protected this time around.
Once again, child benefit appears to be in the firing line and it's filling plenty of column inches. There are also plans for a range of other savings across the Department of Social Protection In the area of health, the proposals being considered include the imposition of an annual fee of €50 for medical card holders along with increases in other user health charges covering prescriptions and access to A&E services.
Even if only some of these proposals make their way into the budget, when they are combined with the confirmation that the main rate of VAT will be increased by two percentage points, this year’s budget is looking very similar to last year’s budget.
In contrast to the debate about where the cuts should be made and by how much, last week Revenue provided details on the amount of tax that was collected through the ‘domicile levy’. This levy of €200,000 was introduced in Budget 2010 on Irish people who are domiciled in Ireland but non-resident for tax purposes. The levy is applied to individuals whose income and assets exceed certain thresholds.
Revenue reported that less than €1.5 million was collected and this was based on a average return of €147,000 by ten individuals who are liable for the levy. The returns are made on a self-assessment basis. Revenue also estimated that, in 2009, there were almost 6,000 individuals who were classed as non-resident for tax purposes and that 440 of these were considered to be very wealthy.
By anyone’s standard,s the domicile levy has failed to ensure that this particular group of Irish people is made to pay their fair share as part of the adjustment. The question is - will the up-coming budget send a clear message that this situation is not going to be tolerated any longer and that other measures are going to be put in place to ensure that the wealthiest Irish people will be made to contribute to the fiscal adjustment on a more equitable basis?
The Community Platform's taxation proposals have highlighted the types of measures used in other countries to tax wealthy non-residents – the US citizen-based tax and the French tax on global assets. The TASC proposals also include measures to increase the level of taxation on assets and passive income from assets held in Ireland, along with reducing the number of days that non-residents can be present in the State from 183 to 90 days.
The economic and equality arguments have been well rehearsed at this stage for targeting taxation measures high earners residing both inside and outside the country. TASC’s Equality Audit of Budget 2011 clearly illustrates who was made to pay more in the last budget. It will come down to the political choices and priorities in relation to who will be made to pay more and who will be protected this time around.
Wednesday, 2 November 2011
TASC Pre-Budget Submission
Aoife Ní Lochlainn: With the conclusion of the latest round of elections and referendums, public attention will now turn to the upcoming four year plan and Budget 2012. As usual, the budget rumour mill has been churning since early summer and various kites are in full flight: €1bn cut in welfare spending, €1bn cut in capital spend, a hike in VAT, and so on. This will be the Government’s first budget, and thus it presents an opportunity to make a decisive break with the past and to show that, although it is required by the EU/IMF deal to make savings in the order of €3.6bn, it can take a different, more progressive path to recovery.
TASC, in its Pre-Budget Submission launched yesterday, suggests a number of policy proposals aimed at reducing the deficit, supporting jobs and protecting low-income groups. Since the advent of the economic crisis, successive budgets have focused narrowly on closing the deficit, to the detriment of both low-income groups and the economy as a whole. The ranks of those on low incomes have swelled over the past number of years with increased unemployment and decreases in earnings, and it is here that the pain of recession is felt most keenly.
As demonstrated by a recent analysis conducted by TASC, the introduction of the Universal Social Charge (USC) and the decrease in social welfare payments meant that those on lower incomes were left disproportionally worse off by Budget 2011. Not only do reductions in the incomes of the lower paid increase inequality, but they also lead to reductions in aggregate demand, which of course has knock-on effects for our economy.
Planning to cut the deficit should not preclude investing in people and infrastructure. If Ireland is to emerge from this crisis in the next few years we will need to ensure that we have a well-educated, highly skilled labour force ready for work. If we are to attract investment and return to growth we need to continue to improve our infrastructure. TASC is proposing that the Government take €1.2bn from the National Pension Reserve Fund and invest in education, skills and training. Capital spending should be maintained at its current level.
Current spending should also be kept at its current level. There are certainly savings to be made in the public sector, but any efficiencies gained should be re-invested so that frontline services are maintained and low income groups are protected.
The Celtic Tiger years left our taxation system unbalanced and disproportionally reliant on consumption and transaction taxes. With the recession and the collapse of the housing market, this has lead to a serious erosion of our tax revenues. While the previous Government had begun to address some of these imbalances by increasing income tax, introducing a carbon tax and beginning the process of reducing harmful tax expenditures, there remains a lot more the current Government can do to create a more stable and equitable taxation system. As mentioned above, the introduction of the USC in Budget 2011 disproportionally affected lower earners; the Government should ensure that any changes in taxation do not further disadvantage these groups. In particular, the Government can remove the remaining property-based ‘Legacy Reliefs’ on non-residential property and cut the level at which individuals and companies can claim interest rates against tax for residential properties. A reduction from 75% to 40% will yield in the order of €350m for the exchequer.
TASC's proposals target mainly passive income, which means that they are less harmful to economic growth. The introduction of a property tax, for example, based on valuations rather than a flat tax, can raise a billion Euro per annum. If such a tax is equality proofed, i.e., incorporating a system of deferrals for those who cannot pay is introduced, it is a more equitable way of raising revenue than an increase in income taxes which hit low to middle income earners. Ireland is in the minority of developed nations in not having any form of recurrent property tax. Our reliance on property transaction taxes (stamp duty) rather than a recurrent property tax can be said to have contributed to the housing bubble, along with the bogeymen of lax regulation, bad planning and harmful property reliefs. The Government should also look at ways in which our taxation system can help address environmental concerns. A modest increase in the carbon levy for example, coupled with other emissions reductions policies will help Ireland lower its carbon emissions.
Finally, TASC has made proposals to save €2bn a year from 2012 to 2023 by restructuring the Anglo Irish promissory notes. These promissory notes are not covered by the EU-IMF deal and therefore the Government could argue with its European counterparts that any restructuring would not constitute a breaking of the deal. Saving €2bn per annum over the next decade would bring a massive boost to the economy and help narrow the deficit, ensuring that the need for damaging cuts and tax increases can be reduced.
TASC, in its Pre-Budget Submission launched yesterday, suggests a number of policy proposals aimed at reducing the deficit, supporting jobs and protecting low-income groups. Since the advent of the economic crisis, successive budgets have focused narrowly on closing the deficit, to the detriment of both low-income groups and the economy as a whole. The ranks of those on low incomes have swelled over the past number of years with increased unemployment and decreases in earnings, and it is here that the pain of recession is felt most keenly.
As demonstrated by a recent analysis conducted by TASC, the introduction of the Universal Social Charge (USC) and the decrease in social welfare payments meant that those on lower incomes were left disproportionally worse off by Budget 2011. Not only do reductions in the incomes of the lower paid increase inequality, but they also lead to reductions in aggregate demand, which of course has knock-on effects for our economy.
Planning to cut the deficit should not preclude investing in people and infrastructure. If Ireland is to emerge from this crisis in the next few years we will need to ensure that we have a well-educated, highly skilled labour force ready for work. If we are to attract investment and return to growth we need to continue to improve our infrastructure. TASC is proposing that the Government take €1.2bn from the National Pension Reserve Fund and invest in education, skills and training. Capital spending should be maintained at its current level.
Current spending should also be kept at its current level. There are certainly savings to be made in the public sector, but any efficiencies gained should be re-invested so that frontline services are maintained and low income groups are protected.
The Celtic Tiger years left our taxation system unbalanced and disproportionally reliant on consumption and transaction taxes. With the recession and the collapse of the housing market, this has lead to a serious erosion of our tax revenues. While the previous Government had begun to address some of these imbalances by increasing income tax, introducing a carbon tax and beginning the process of reducing harmful tax expenditures, there remains a lot more the current Government can do to create a more stable and equitable taxation system. As mentioned above, the introduction of the USC in Budget 2011 disproportionally affected lower earners; the Government should ensure that any changes in taxation do not further disadvantage these groups. In particular, the Government can remove the remaining property-based ‘Legacy Reliefs’ on non-residential property and cut the level at which individuals and companies can claim interest rates against tax for residential properties. A reduction from 75% to 40% will yield in the order of €350m for the exchequer.
TASC's proposals target mainly passive income, which means that they are less harmful to economic growth. The introduction of a property tax, for example, based on valuations rather than a flat tax, can raise a billion Euro per annum. If such a tax is equality proofed, i.e., incorporating a system of deferrals for those who cannot pay is introduced, it is a more equitable way of raising revenue than an increase in income taxes which hit low to middle income earners. Ireland is in the minority of developed nations in not having any form of recurrent property tax. Our reliance on property transaction taxes (stamp duty) rather than a recurrent property tax can be said to have contributed to the housing bubble, along with the bogeymen of lax regulation, bad planning and harmful property reliefs. The Government should also look at ways in which our taxation system can help address environmental concerns. A modest increase in the carbon levy for example, coupled with other emissions reductions policies will help Ireland lower its carbon emissions.
Finally, TASC has made proposals to save €2bn a year from 2012 to 2023 by restructuring the Anglo Irish promissory notes. These promissory notes are not covered by the EU-IMF deal and therefore the Government could argue with its European counterparts that any restructuring would not constitute a breaking of the deal. Saving €2bn per annum over the next decade would bring a massive boost to the economy and help narrow the deficit, ensuring that the need for damaging cuts and tax increases can be reduced.
Tuesday, 18 October 2011
Presentations to 2011 FEPS/TASC Autumn Conference
The 2011 FEPS/TASC Autumn Conference was held on Friday, October 14th, and Saturday October 15th. Videos of the event - including the closing keynote address delivered by Professor James K. Galbraith of the University of Texas at Austin - will be uploaded later in the week, but in the meantime we've uploaded some of the PowerPoint presentations (below the fold). Please note that other PowerPoint presentations will be available later in the week. The programme for the event is available here.
Click here to read Professor Stephany Griffith-Jones' opening keynote on Friday (Expert Round Table on Financial Regulation). On Friday afternoon, a session on 'Regulating for Stakeholders' looked at the impact of financial regulation (or its absence) on different stakeholders. Click here for Dr Eleanor O'Higgins' introductory overview, and here to read Margaret Ward's take on the impacts on consumers. Damon Silvers of the AFL-CIO gave a presentation on the impact on workers (here), and Dr Jonathan Westrup of the Irish Management Institute looked at the effects on business.
Following the Stakeholders session, Prof Terrence McDonough of NUI Galway looked at Irish banks and asked whether the pillar banks are still fit for purpose. His slide on 'Saving Private Banking' provided one of the weekend's catchphrases. Friday ended with a presentation by Dr Jim Stewart of TCD on new forms of banking.
The Friday Expert Round Table concluded with a presentation on 'Changing the regulatory landscape' by Shane O'Neill, Head of Banking Supervison at the Central Bank.
Saturday morning started with a session on investment. Click here to see Michael Taft's presentation, and here for Michael Burke's presentation, followed by a presentation from Kieran Rose of Dublin City Council, which will be uploaded during the comping days.
The session on investment was followed by a panel discussion on the European debt crisis. Following a presentation on Ireland's Debt Audit by the project's lead researcher, Dr Sheila Killian of the University of Limerick (to be uploaded shortly), Professor Stuart Holland of Coimbra University in Portugal, Professor James Galbraith of the University of Texas at Austin and TASC's Tom McDonnell discussed ways of escaping the debt trap. Professor Holland's presentation is available here, and Tom McDonnell presentation can be downloaded here.
Lunch on Saturday was followed by two breakout sessions: (1) A Job for the State? The new mixed economy, and (2) Good health is good for the economy.
Breakout (1) heard presentations from Professor Stuart Holland, TASC's Aoife Ni Lochlainn and Dr Helena Lenihan of the University of Limerick.
Breakout (2) heard presentations from Dr David Stuckler of the University of Cambridge, Professor Eamon O'Shea of NUI Galway, and health policy analyst and journalist Sara Burke.
Following the breakouts, Dr Tom Healy, Director of the Economic Research Unit, spoke on Charting a New Course. This was followed by Professor James Galbraith's closing keynote address.
Click here to read Professor Stephany Griffith-Jones' opening keynote on Friday (Expert Round Table on Financial Regulation). On Friday afternoon, a session on 'Regulating for Stakeholders' looked at the impact of financial regulation (or its absence) on different stakeholders. Click here for Dr Eleanor O'Higgins' introductory overview, and here to read Margaret Ward's take on the impacts on consumers. Damon Silvers of the AFL-CIO gave a presentation on the impact on workers (here), and Dr Jonathan Westrup of the Irish Management Institute looked at the effects on business.
Following the Stakeholders session, Prof Terrence McDonough of NUI Galway looked at Irish banks and asked whether the pillar banks are still fit for purpose. His slide on 'Saving Private Banking' provided one of the weekend's catchphrases. Friday ended with a presentation by Dr Jim Stewart of TCD on new forms of banking.
The Friday Expert Round Table concluded with a presentation on 'Changing the regulatory landscape' by Shane O'Neill, Head of Banking Supervison at the Central Bank.
Saturday morning started with a session on investment. Click here to see Michael Taft's presentation, and here for Michael Burke's presentation, followed by a presentation from Kieran Rose of Dublin City Council, which will be uploaded during the comping days.
The session on investment was followed by a panel discussion on the European debt crisis. Following a presentation on Ireland's Debt Audit by the project's lead researcher, Dr Sheila Killian of the University of Limerick (to be uploaded shortly), Professor Stuart Holland of Coimbra University in Portugal, Professor James Galbraith of the University of Texas at Austin and TASC's Tom McDonnell discussed ways of escaping the debt trap. Professor Holland's presentation is available here, and Tom McDonnell presentation can be downloaded here.
Lunch on Saturday was followed by two breakout sessions: (1) A Job for the State? The new mixed economy, and (2) Good health is good for the economy.
Breakout (1) heard presentations from Professor Stuart Holland, TASC's Aoife Ni Lochlainn and Dr Helena Lenihan of the University of Limerick.
Breakout (2) heard presentations from Dr David Stuckler of the University of Cambridge, Professor Eamon O'Shea of NUI Galway, and health policy analyst and journalist Sara Burke.
Following the breakouts, Dr Tom Healy, Director of the Economic Research Unit, spoke on Charting a New Course. This was followed by Professor James Galbraith's closing keynote address.
Friday, 30 September 2011
Cork incomes seminar
Videos of yesterday's seminar on 'Incomes - Instruments of Recovery', held in Cork, will be available shortly. Meanwhile, click here to see some of the presentations.
Tuesday, 27 September 2011
Party nation
Michael Taft: Remember that statement – how during the boom years we all ‘partied’ as a nation? Remember those prescriptions – how we had to cut back our living standards, probably back to 2003; in order to restore competitiveness? Remember how we were told that we were living beyond our means and now we had to purge (and purge and purge). With an important seminar on incomes and recovery being hosted by TASC in Cork on Thursday, let’s see just how much we partied, how we lived beyond our means, and how much – as a nation – we indulged at the table of plenty. You can read the rest of this post here.
Tuesday, 14 June 2011
TASC launches new report on health inequalities
Wednesday, 1 June 2011
A Marie Antoinette moment
"Marie Antoinette's infamous response to the news of bread riots prior to the French Revolution, "Let them eat cake", may be apocryphal but it contains an essential truth about the unwillingness of the powerful to accept responsibility for a crisis. Neither is there any attempt to offer a solution that might involve some change to the privileges of the mighty". Click here to read the rest of Michael Burke's piece for the Guardian's Comment is Free site, in which he notes that "Belying any notion of "austerity", which implies all sectors of society must reduce their standards of living in a common cause, the lrish employers' organisation Ibec is pressing for lower wages among some of the lowest-paid workers in sectors such as fast food and hospitality. It is attempting to override the decisions of the joint labour committees and, emboldened by the favourable response it is getting from the new Fine Gael/Labour coalition government, Ibec is now also arguing for the abolition of the JLCs altogether. These proposals follow the policies of both the current and previous Dublin governments in implementing cuts in the pay of public sector workers and imposing a pensions levy, in effect a tax increase". Michael also references the statement by 36 economists, economic analysts and social scientists released by TASC yesterday, of which he was one of the signatories.
Tuesday, 31 May 2011
Wage-setting mechanisms: statement by 36 economists, analysts and social scientists
“We broadly welcome the Report of the Independent Review of Employment Regulation Orders and Registered Employment Agreement Wage-Setting Mechanisms. In particular, the recommendation that the basic JLC framework should be retained is good news for many thousands of low-paid workers. We also endorse the conclusion reached by Kevin Duffy and Frank Walsh that reducing JLC rates to the minimum wage level would have important distributional consequences without having any substantial effect on employment.
“We are concerned that recent proposals reportedly made by Enterprise Minister Richard Bruton are not in line with the Duffy-Walsh report [...]"
Click here to read the rest of the statement issued today by 36 economists, economic analysts and social scientists, all members of the TASC Economists' Network.
“We are concerned that recent proposals reportedly made by Enterprise Minister Richard Bruton are not in line with the Duffy-Walsh report [...]"
Click here to read the rest of the statement issued today by 36 economists, economic analysts and social scientists, all members of the TASC Economists' Network.
Thursday, 19 May 2011
TASC launches discussion paper on debt and banking crisis
TASC today launched a discussion paper by TASC policy analyst (and PE blogger) Tom McDonnell, The Debt and Banking Crisis: Progressive Approaches for Europe and Ireland. You can download the document here. Comments?
Thursday, 14 April 2011
Myths of the Irish Crisis: Wages and Competitiveness
TASC has just issued a new discussion paper by TASC economist (and PE blogger) Tom McDonnell examining two distinct but related claims. First that Ireland lost competitiveness within the European Union in the last decade and second that high labour costs in low-wage sectors are contributing to the employment crisis.
Based on a review of the literature together with Eurostat data, the paper concludes that Ireland did not suffer an overall loss of competitiveness prior to the economic crash. The paper also refutes arguments that labour costs in the low-paid services sectors – sometimes viewed as undermining Irish competitiveness – are high by international standards. Instead, an examination of Eurostat data projects that 2010 labour costs were 9.3 per cent below the EU-15 average in the hospitality sector, and 8.8 per cent below the EU-15 average in the wholesale/retail sector. You can download Myths of the Irish Crisis: Wages and Competitiveness here.
Based on a review of the literature together with Eurostat data, the paper concludes that Ireland did not suffer an overall loss of competitiveness prior to the economic crash. The paper also refutes arguments that labour costs in the low-paid services sectors – sometimes viewed as undermining Irish competitiveness – are high by international standards. Instead, an examination of Eurostat data projects that 2010 labour costs were 9.3 per cent below the EU-15 average in the hospitality sector, and 8.8 per cent below the EU-15 average in the wholesale/retail sector. You can download Myths of the Irish Crisis: Wages and Competitiveness here.
Wednesday, 2 March 2011
Research indicates reducing JLC rates will cost Exchequer and depress consumer demand
Research published last week by TASC indicates that any moves to reduce Joint Labour Committee rates will involve significant direct and indirect costs to the Exchequer. The research is contained in TASC’s Submission to the Independent Review of ERO and REA Wage Setting Mechanisms. Comments welcome.
Wednesday, 23 February 2011
From tiger to bailout
Ireland’s deep financial and economic crisis results from failings in its growth model, policy mistakes and systemic failures within European Monetary Union. The bail-out agreement with the IMF and the European authorities and the associated austerity package will not resolve the problems faced by the country and must be renegotiated. Instead a package is needed to promote economic recovery and jobs growth involving elements including: sovereign debt rescheduling and a lower interest rate, fundamental tax reform, and an investment programme financed by the sovereign wealth fund. That's the opening of an ETUI Policy Brief co-authored by former TASC Director Paula Clancy and Policy Analyst Tom McDonnell. The full paper is available for download here.
Friday, 21 January 2011
Thursday, 9 December 2010
TASC analysis of Budget 2011
TASC has issued its analysis of Budget 2011; you can download a PDF of the document here. Comments?
Tuesday, 9 November 2010
Unemployment, emigration and growth
Tom O'Connor: The seasonally adjusted unemployment figures show a fall of 6,500 signing on the live register. This is totally due to emigration. In fact, it is highly likely that the figures would have risen and not fallen, were it not for the scale of emigration right now, which is now at its highest annual level in living memory.
In the year to last April, the CSO show that emigration stood at 65,300 and the net figure when we subtract the numbers entering the country was 34,500. These immigrants numbered 30,800, a very sharp fall.
Taking the first figure, 5,441 people per month up to last April were leaving the country presumably due to unemployment. Allowing for the outside possibility that 12,000 of the 30,800 immigrants were coming here to draw the dole, which the government would say is outside its control, the numbers leaving the live register due to emigration , up to April last, was 4,441 per month. Over that period, unemployment rose by 51,000 and would have risen thus to 104,292 were it not for emigration. This is in one year!
Now, if we look at the most recent ESRI predictions, things have gotten worse: In the year up to next April, they are predicting net migration to be 60,000 people. This means that the numbers leaving the country minus the numbers coming in will be 60,000 leaving.
If we take it that the numbers coming back will be a maximum of 30,000 per year up to next April, then this would indicate emigration of 90,000. Consequently, 7,500 people are leaving these shores every month at the moment.
Even if we adjust this figure downwards on the off chance that 12,000 of the 30,000 immigrants will come here to draw the dole, the numbers of people being removed from the live register due to net emigration stands at 6,500. This is exactly the same figure as the seasonally adjusted fall in unemployment for the month of October.
So there is no real drop in unemployment, and even with the illusion of a fall of 6,500, there are still 443,000 people on the live register. To make matters worse, were it not for emigration since April, this figure would now stand at 482,000, only 17,000 shy of a half a million people.
Ah, but the government will say that the public finances are stabilising. This is stretching the limits of credulity even further. The government paid €7 billion to the Anglo Irish Bank and the National Pension Reserve Fund last year, bringing the deficit to 25 billion. Netting out this 7 billion to compare last year’s deficit with this year where this 7 billion spending won’t occur, shows that the deficit will widen considerably at the end of this year.
The deficit net of Anglo/NPRF at the end of 2010 was €18 billion last year and it will be €22 billion at the end of this year. Consequently, the government will have saved 4.3 billion mostly by cutting services to those such as old people, children with special needs, community groups, home helps and social welfare recipients and it will have increased the deficit by 4 billion!
Of course the answer is to grow the economy and not deflate it. A whopping 15 billion of the 18 billion deficit last year was due to the fall in tax receipts from €48 to 33 billion from Dec 07 to Dec 09. This was due to unemployment which the government has done nothing about.
In this context, the Irish Congress of Trades Unions have made a very compelling observation this week, that it is the government’s inability to grow the economy and reduce unemployment that is causing the bond interest cost of government borrowing to rise.
The markets know the government is making no headway and the solution is to bring down unemployment. They can see the abject failure of government policy in this regard, which is driving down their confidence and driving up the cost of borrowing.
So, the endorsement by business groups of front loading cuts of 6 billion to reduce borrowing costs is based on the incorrect premise that the markets are looking for this deflationary course of action, when instead they would prefer to see a solution to unemployment and the deflationary cycle in order to grow the economy!
This would reduce unemployment, grow taxes and reduce the deficit alongside a move out of recession and markets know that this would be a far superior result to the current deflation and borrowing policies.
Consequently, the Irish Congress of Trade Unions has called for a wide ranging six billion fiscal stimulus to get the economy growing, reduce unemployment and thus reduce the deficit. This is something that I have been calling for since the summer of 2008 to halt the government’s suicide pact in driving the economy continuously down in to a debt-deflationary cycle.
The Nobel Prize winning economists, Joseph Stiglitz and Paul Krugman have also been advocating this approach and the latter has strongly criticised the failure of the Irish government not to stimulate the economy. TASC has also called for fiscal stimulus. The evidence is overwhelming. Government policy must be radically altered and fast. These are lessons for any alternative incoming government also.
This is a slightly edited version of an opinion piece published in yesterday's Irish Examiner
In the year to last April, the CSO show that emigration stood at 65,300 and the net figure when we subtract the numbers entering the country was 34,500. These immigrants numbered 30,800, a very sharp fall.
Taking the first figure, 5,441 people per month up to last April were leaving the country presumably due to unemployment. Allowing for the outside possibility that 12,000 of the 30,800 immigrants were coming here to draw the dole, which the government would say is outside its control, the numbers leaving the live register due to emigration , up to April last, was 4,441 per month. Over that period, unemployment rose by 51,000 and would have risen thus to 104,292 were it not for emigration. This is in one year!
Now, if we look at the most recent ESRI predictions, things have gotten worse: In the year up to next April, they are predicting net migration to be 60,000 people. This means that the numbers leaving the country minus the numbers coming in will be 60,000 leaving.
If we take it that the numbers coming back will be a maximum of 30,000 per year up to next April, then this would indicate emigration of 90,000. Consequently, 7,500 people are leaving these shores every month at the moment.
Even if we adjust this figure downwards on the off chance that 12,000 of the 30,000 immigrants will come here to draw the dole, the numbers of people being removed from the live register due to net emigration stands at 6,500. This is exactly the same figure as the seasonally adjusted fall in unemployment for the month of October.
So there is no real drop in unemployment, and even with the illusion of a fall of 6,500, there are still 443,000 people on the live register. To make matters worse, were it not for emigration since April, this figure would now stand at 482,000, only 17,000 shy of a half a million people.
Ah, but the government will say that the public finances are stabilising. This is stretching the limits of credulity even further. The government paid €7 billion to the Anglo Irish Bank and the National Pension Reserve Fund last year, bringing the deficit to 25 billion. Netting out this 7 billion to compare last year’s deficit with this year where this 7 billion spending won’t occur, shows that the deficit will widen considerably at the end of this year.
The deficit net of Anglo/NPRF at the end of 2010 was €18 billion last year and it will be €22 billion at the end of this year. Consequently, the government will have saved 4.3 billion mostly by cutting services to those such as old people, children with special needs, community groups, home helps and social welfare recipients and it will have increased the deficit by 4 billion!
Of course the answer is to grow the economy and not deflate it. A whopping 15 billion of the 18 billion deficit last year was due to the fall in tax receipts from €48 to 33 billion from Dec 07 to Dec 09. This was due to unemployment which the government has done nothing about.
In this context, the Irish Congress of Trades Unions have made a very compelling observation this week, that it is the government’s inability to grow the economy and reduce unemployment that is causing the bond interest cost of government borrowing to rise.
The markets know the government is making no headway and the solution is to bring down unemployment. They can see the abject failure of government policy in this regard, which is driving down their confidence and driving up the cost of borrowing.
So, the endorsement by business groups of front loading cuts of 6 billion to reduce borrowing costs is based on the incorrect premise that the markets are looking for this deflationary course of action, when instead they would prefer to see a solution to unemployment and the deflationary cycle in order to grow the economy!
This would reduce unemployment, grow taxes and reduce the deficit alongside a move out of recession and markets know that this would be a far superior result to the current deflation and borrowing policies.
Consequently, the Irish Congress of Trade Unions has called for a wide ranging six billion fiscal stimulus to get the economy growing, reduce unemployment and thus reduce the deficit. This is something that I have been calling for since the summer of 2008 to halt the government’s suicide pact in driving the economy continuously down in to a debt-deflationary cycle.
The Nobel Prize winning economists, Joseph Stiglitz and Paul Krugman have also been advocating this approach and the latter has strongly criticised the failure of the Irish government not to stimulate the economy. TASC has also called for fiscal stimulus. The evidence is overwhelming. Government policy must be radically altered and fast. These are lessons for any alternative incoming government also.
This is a slightly edited version of an opinion piece published in yesterday's Irish Examiner
Subscribe to:
Posts (Atom)