TCD ‘research seminar in Contemporary Irish History: the ideology of radical republicanism 1962 to 1969.’ October 31, 2008Posted by WorldbyStorm in Irish History, Irish Politics, The Left.
add a comment
Thanks to TD for the following…
Hey, it is not up on their site but I saw it on the national archives
noticeboard TCD seminar series ‘research seminar in Contemporary Irish
History’ includes on Wednesday the 5th of November Matt Treacy (TCD)
on the ideology of radical republicanism – which is on at 4pm in IIIS
seminar room C6002 Level 6 Arts Building Trinity.
The site here….just has last years details.
The education cuts… And as ever we are told there is no alternative… October 31, 2008Posted by WorldbyStorm in Irish Politics.
As reported on the Oireachtas website, Minister of Education Batt O’Keefe responded to the debate last Wednesday night as follows:
Before I comment on some of the outlandish claims made this evening, and the scaremongering that has gone on in the past two weeks about the claimed impact on schools and children, I want to first go back to one basic premise as the starting point for any reasonable or rational discussion on this issue. We must accept that the dramatic changes in world economic circumstances, changes that are challenging Governments the world over, require decisive action. Or are we to pretend, as some seem intent on doing, that somehow here in Ireland we can carry on regardless?
The budget was about striking a balance between setting an appropriate level of public expenditure, making measured changes to taxation and setting an appropriate level of borrowing. It is simplistic and dangerous to pretend that expenditure on public services could be allowed to grow as though domestic and international economic conditions were as healthy as they were in recent years. Those on the benches opposite are being outrageous with the people when they offer—–solutions that enable them to avoid putting forward difficult options for keeping expenditure under control.
I find this a most interesting line. “Simplistic and dangerous”… eh? Why so? Let me refer once more to our financial sector which is currently underpinned by state guarantee (although a vague one at that) and may well, if Vincent Browne is correct, have to be part nationalised as has been done in other states. I think the comparison is instructive. We are told about the centrality of financial market and institutional stability to the well-being of our economy. This is true, however much one might wish that we lived in a different economic context. And so when said financial market and insitutions encounter near-catastrophic difficulties every sinew of the state is stretched to support them. To the point where guarantees that might potentially bankrupt the state are given – and for an example of how eventual bankruptcy might operate in future look at the plight of plucky little Iceland, learning the hard way that rhetoric about independence only goes so far in this world, particularly when allied with a peculiarly smug self-satisfaction centred on financial acumen – and hey, does that attitude sound familiar…
But in the Dáil yesterday there were some interesting straws in the wind from Fianna Fáil that speak of a particularly hard-nosed approach. Consider the following from Cork Fianna Fail TD Michael McGrath who said that
…conventional political analysis suggests that the departments of social welfare, health and education should be protected from cutbacks.
But he claimed this analysis ignores the fact that these three departments account for 78 per cent of current gross Government expenditure. “The reality is that it is impossible to bring the Government finances under control without addressing these three departments,” he said.
And so it begins. Having had their brush with political destruction the FF Deputies are newly enervated. The inevitable attacks on basic provision appear.
Now throughout my childhood I was repeatedly told that education was the bedrock of our future prosperity. That was true, and remains so today. Yet somehow the idea that we can continue to fund expenditure on it in a context of a growing population is ‘simplistic and dangerous’.
Let’s also remember that the situation on the day prior to the Budget wasn’t one of an education system basking in the fruits of the boom. If anything quite the opposite. Funding was parsimonious and intermittent across all sectors from primary to third level. Large scale projects did reasonably well, day to day spending much worse. My direct experience of the latter attests to constrained or shrinking budgets since the turn of the decade, and my not entirely indirect experience of the former and indeed secondary education supports the points being made by those working in those areas.
It is difficult to point to the most retrogressive elements of the Budget as regards education… would it be the cuts in the free book scheme and library funding? How about class size increases? The – now admitted – loss of at least 1,000 primary school teaching posts in a system which was already significantly underfunded across decades and at a point in the education cycle of a child when such losses will have the greatest negative outcomes. One of the more painful sights of this week was seeing John Gormley, a man whom I have considerable time for, wilt under the questioning of Brian Dobson on RTÉ News when asked how he could stand over cuts that would see a cohort of school children suffer significant impacts on their education, whatever about the future educational situation.
What is the answer to that question? How is it somehow correct to sacrifice the potential and prospects of a child today for supposed educational jam tomorrow? And the reality is, that for all the talk about protecting the most vulnerable in our society, there is no answer.
But then, how can Batt O’Keefe seriously defend the idea that any cut in education is not worthy of serious critique, and that his rhetoric of ‘outlandish claims’ and ‘scaremongering’ does not reflect well upon him? Cuts mean that someone, somewhere, and in these instances we are talking about school children, will find some service or provision missing or time that previously existed to assist them no longer available. In societal terms the implications of that truth deserves a response a little bit more nuanced and considered than furious hand-waving… particularly a hand-waving which on the one hand summons up the spectre of global financial crisis to keep us in line and on the other seeks to minimise the effect of those cuts.
Let’s look at one of those implications. The Irish Times gives a useful overview of one area, that of language support teaching. In a context where there has been a significant, and welcome, influx of newcomer students the necessity to ensure that they attain a good standard of English is obvious. The Irish Times noted how the present situation where a school can have one language support teacher for every 14 newcomer students up to a total of 6 teachers. The Budget imposes a ceiling of 2 support teachers.
The impact of that on all students is predictable.This makes something of a mockery of the idea that the Minister puts about that these cuts merely indicate a return to a pre-existing status quo. These are challenges that have developed across the decade, there is no way to return to the pre-existing situation.
But remember the Minister of Education tells us that it is ‘simplistic and dangerous’ to argue that there are other ways to deal with the financial crisis.
He went on last Wednesday night to argue that:
We have heard suggestions that there are easy alternative taxation measures that can somehow solve all these difficulties. This is populist nonsense. Let us remind ourselves that in the mid-1980s we followed the route of high taxation and significant borrowing, and we had difficulty recovering from that folly. We also should remind ourselves that it was by pitching the burden of taxation at an appropriate level that we made Ireland attractive for foreign direct investment and enabled private enterprise to flourish.
And this morning, what do I read but reports that the Taoiseach has made similar statements to business ‘leaders’.
Speaking at a business round table organised by the Economist magazine in the Conrad Hotel in Dublin, Mr Cowen said: “Our day-to-day spending exceeds our revenue coming in by over €1,000 for every man, woman and child in the State. Ten per cent of the cost of every teacher, doctor and nurse is paid for from borrowing.
“This will have to be paid back by future generations of Irish people. We cannot simply borrow our way out of trouble or return to the days of punitive tax rates . . .,” he said.
So – for example – reinstating the extra percentage point on the higher rate of tax although it would immediately net us somewhere around €400 plus million (when cut that resulted in €480 million in lost revenue, but I’m a reasonable man and I accept economic activity may have diminished in the interim, although how much remains to be seen) is somehow beyond the beyond, is somehow ‘punitive’. A strange definition of punitive…
But then this is in the context of a government, and commentariat that simply cannot accept that taxes should go up as well as down – dependent upon circumstance.
And the Minister is – of course – the man who thought that…
“If I was to withdraw State funding from fee-paying schools, that would have a catastrophic effect. The issue is not under examination.”
Crazy talk, to even examine dealing with state support for the private sector – eh? Whereas cutting services to the most vulnerable in our flagging state system… Well, here’s some more crazy talk…
The Teachers Union of Ireland (TUI) has some thoughts on what the impacts of this are going to be on families. They make for sobering reading, not least because they contextualise the cuts in terms of their impacts on school children and their families.
At the march we heard:
The ASTI’s vice president Joe Moran [call] the Budget mean-spirited and misguided and that that it would affect every young person in second-level education. Mr Moran said Ireland comes 27th out of 29 OECD countries when it comes to spending on education relative to the country’s wealth.
And in yesterday’s Irish Times a piece by Sheelagh Drudy, professor of Education at UCD, which while comparing Finland and Ireland pointed up a staggering disconnect between political rhetoric and actuality in the context of education:
OECD education figures show that Finland consistently spent a higher proportion of its gross domestic product (GDP) on education than Ireland from the early 1990s to the mid-2000s – even as it was just emerging from its very serious economic crisis.
In 1990, Finland spent 5.96 per cent of GDP on education, compared to Ireland’s 5.2 per cent; in 1995, it spent 6.3 per cent, compared to Ireland’s 5.2 per cent; in 2000, it spent 5.6 per cent, compared to Ireland’s 4.5 per cent; and, in 2005, it spent 6 per cent, compared to Ireland’s 4.6 per cent.
And the contention that we sit at 27 out of 29 OECD countries in relation to expenditure on education relative to GDP would appear to be true. Because if you go to the OECD site you will be able to download some irritatingly macro-laden Excel files which indicate that – for example – in 2004 (for which the latest figures are available) expenditure on educational institutions as a percentage of GDP was 4.6% , as against an OECD average of 5.7%. And this in a context where the number of students enrolled in all areas of education as a percentage of the total population at 24.4% was higher than the OECD average of 23%. And here’s the funny thing, this was during the so-called ‘boom’.
Indeed the OECD in its 2006 Report on Ireland [The policy brief with main findings can be downloaded here, note that it is in PDF format] stated:
Ireland has continued its exemplary economic performance, attaining some of the highest growth rates in the OECD. After a remarkable decade, per-capita income has caught up with and overtaken the EU average.
Yet spending on education remained mired at the bottom of the OECD tables.
So what we have, essentially, is a Government which seeks to defend cuts in a system already in a poor state by contrast with other states, despite our relative prosperity.
And let us note some of the OECD’s thoughts as regards an answer to “What needs to be done in the education sector?”:
Maintaining high rates of productivity growth will also entail continued efforts to upgrade skills. Reforms at all levels of the education system are needed. At the earliest stages, pre-school attendance is low while classes are large and of short duration. International experience shows that integrated systems, which combine pre-primary education and crèche-based day-care, have higher quality for children and provide greater parent satisfaction. Priority should therefore be given to reducing class sizes, extending sessions and creating seamless pre-school and day-care facilities at the same location.
In secondary schools, too many youngsters are leaving without upper-secondary qualifications. They are doing so not because of a hot job market – their employment performance is worse than their counterparts in other OECD countries – but because of inadequate help for students who are struggling. There is a shortage of remedial or catch-up classes and the special programmes that are available focus on children from disadvantaged backgrounds rather than those who are having learning difficulties. Overall, Irish 15 year-olds are good at reading but only average in maths and science. Recent changes to primary school curricula should help in this respect.
I refer to all this because it provides a reasonably objective and dispassionate view of matters. And moreover, if one reads further down one will find suggestions as to funding of third level which I would very much disagree with. So this is hardly an analysis coming from an unvarnished left of centre perspective, but is no less worthy of consideration for all that.
And the thoughts of those on the ground are instructive. As the IT noted on Wednesday:
At post-primary level, the student-teacher ratio has been raised from 18 to one to 19 to one. The Department of Education believes that this will result in 200 fewer teachers in the system. The TUI says 1,200 teaching posts will go.
Is that ‘scare-mongering’? it would appear not.
Principal of Castleknock Community College John Cronin agrees that the department has miscalculated and says the impact of the increase will be huge.
“The naivety of them to think that this increase is a simple matter of an extra student in each class is unbelievable,” he says. “They simply do not understand how a secondary school works.”
Which would appear to be the situation. And as also noted in the IT report:
Cronin is set to lose four teachers.
“It will impact on class size, of course. We have an open enrolment policy so we have students with special needs such as Down syndrome and Asperger’s syndrome. This will certainly affect the quality of their teaching and learning. We will try to minimise the effects, of course, but there is only so much we can do.”
And there’s an iron logic to this. Because with teacher numbers going down the capacity within a school to teach a broader range of subjects diminishes. Bad news for those, apparently, central to our future economic progress such as science.
Worth remembering too that this is from a Fianna Fáil that time and again said that it would reduce the pupil teacher ratio.
One of O’Keefe’s favourite lines, when he’s not talking up the apocalypse, is that the cuts will merely bring us back a year or so… and the follow-on of this is the priceless ‘one step back to take two steps forward…’. But we didn’t start at a position where cuts in education can be absorbed in the way he suggests.
Look, I can go on, but what’s the point? This shabby Budget introduced by a curiously inept government has exposed a void at the centre of our polity where the nostrums of the centre right, hidden somewhat by years of economic growth, are coming into sharp focus once more. If you don’t know about these issues or want further detail look here…
As ever the problem is that for far too many in our political class the belief is that we run an economy first and last and always and that the society which that economy is meant to serve is near irrelevant, to be bought off with the continual reiteration of low taxation. Note what O’Keefe said on Wednesday night… In order to maintain existing jobs and create replacement jobs for any that are lost, we cannot discourage private investment by taxing it out of existence…
Again, is he really suggesting that one or two per cent on the higher rate of tax would result in such an outcome, or that a properly graded progressive tax o higher incomes would do likewise? It is widely accepted that at the time the government introduced the one per cent cut there was a strong lobby against the proposal both inside and outside government. So his words ring very hollow indeed.
I hate overblown rhetoric, I really do. Ten years of listening to talk about the last two governments being paragons of neo-liberalism does that to a person. But I think it fair to say that we’re seeing the transition to one of the most unapologetically functionally right-wing governments this state has seen – well, certainly in my lifetime. One which unashamedly proscribes ‘toughness’ for the weakest while protecting the strong. When we read comments that seem to place economic platitudes above all else and push social and economic justice to the margins then we’re not in Kansas anymore, and certainly not Berlin.
Welcome to Boston, circa 1980.
And so we hear the chorus of the “sensible”…
Yesterday evening, the director general of the Irish Business and Employers’ Confederation, Turlough O’Sullivan, said that while not all recent Government decisions had been well thought out “at a time of crisis it behoves all of us to support the general thrust of the Budget strategy . . . It is not edifying to see protests by sectional interests at a time when we need to be sending out a signal to the international community that we are a mature society capable of managing in the good times and the bad.”
So let’s get this straight. The Budget decisions are ill-thought out, but we shouldn’t protest against them. He does realise we live in a democracy? No?
Russell Brand – Lefty? October 30, 2008Posted by Garibaldy in Culture.
Tags: russell brand
In the North… October 29, 2008Posted by WorldbyStorm in Northern Ireland, The North.
From one of our contributors in Belfast…
…there is real fear in Belfast of big trouble on Sunday with the RIR return parade and no less than 4 republican demos. Loyalists are mobilising as well. The Andytown News has come out against a counter-demo, which is usually significant.
Palin 2012 and the November Surprise… October 29, 2008Posted by WorldbyStorm in US Politics.
It’s funny, reading about the supposed rifts in the Palin/McCain campaign… ooops, I mean of course the McCain/Pallin campaign I couldn’t help but be struck by the following quote from an unnamed McCain advisor who suggested she was…
“going rogue. She is a diva, she takes no advice from anyone. She does not have any relationships of trust with any of us, her family or anyone else.
“Also, she is playing for her own future and sees herself as the next leader of the party.”
It’s the ‘also’ in that paragraph that gets me. That is the sort of word thrown in in a argument as a bridging device between one set of complaints and another as if none of the first set are convincing enough, or alternatively there is a bubble of anger and resentment so great that it encompasses more than the speaker can manage to communicate economically. You’ll have used or heard it yourself, the sort of ‘…and you stink, your feet stink too…also your dog is a mutt..!’ approach.
Childish? Why of course. But no wonder with the situation looking so bad for McCain. The slippage of conservatives to Obama has been quite a sight as they realise who is most likely to be the only game in town for the next four years – or longer.
Interesting too that she is establishing herself, and being given a fair assist in all this by many factions within the Republican party, as the candidate for 2012. Good for her. One wonders at the dynamic of Palin and Obama squaring up to each other. One also wonders at the nature of a Palin populist Republican party. Perhaps more right-wing an expression of US Republicanism than we’ve seen in quite a while.
As for the campaign… well, having been through some epics – haven’t we all – I’m not holding my breath. November the 5th is still just over a week away. November surprise anyone?
I’ve been thinking a little about the quote I referenced from Monday’s Irish Times about the Green Party. It went…
A spokesman for the Green Party said they recognised it was a difficult poll finding for the Government, coming at a time of unprecedented international calamity in financial markets.
“But for the Green Party, it is a solid result in keeping with opinion poll trends since entering government 16 months ago. People recognise we are there to do a specific job on environmental and other issues,” he said.
This blog has been – in the main – critically supportive of the Green Party over the past year or so, as it has been of all our left and progressive formations. But note that I say left and progressive formations.
One of the less lovable traits of the Green Party is the way in which in the course of conversation with their members the line ‘but the Green Party isn’t left-wing or right-wing…’ comes up. It is produced with all the relish of a magician saying ‘ta-dah!’ and it is, like all such lines, intended not so much a means of demonstrating some transcendental political quality as being a conversation stopper. If it is neither left nor right then it does not, or so the thinking goes, have the negative characteristics of either.
Indeed, if the party is not left or right then it can be strongly pro-enterprise, but also vaguely redistributionist. It can be in favour of local government, but seek state power by joining government. It can be fervently, but not too much so, for the retention of Medical Cards and their extension (go see their health policy) while sitting around a Cabinet table and overseeing their reduction. It can be good, it can be bad. It can be up, it can be down. It can be post-ideology and, as the old Marxism Today joke had it, post early for Christmas.
But that’s all so much hogwash because, of course, the reality is that just as gender and race are part and parcel of the US Presidential campaign, however much all parties tend to eschew the language of gender and race, so it is that left and right are intrinsic to the nature of the political environment that the Green Party operates in and therefore impinge directly upon it.
The point being that at some stage the Green Party was always going to have, as this last couple of weeks has forced it, to show the colour of its money on issues which are self-evidently of left or right, or of class if you prefer. And to me as a leftist their response has been startlingly inadequate, which leads me to believe that they may well believe that they are not of right or left. Well. They can believe it, but that doesn’t mean that they’re correct.
The fallacy here is to believe that a contemporary society can be beyond class division, that in some ineffable manner ‘class does not matter’, or to look to the future that even under the massive pressures generated by climate change that a society will somehow operate in such a way as to avoid the internal pressures of class, or that the floods will wash all else before them. There’s more than a little of the old contortions on the further left about the nature of the Soviet Union and its relationship to Marxism, in whatever flavour favoured. The blindingly obvious reality that the Soviet Union, as with any other state/society, couldn’t be reduced to the simplifications of models generated to sustain a political position in entirely different societies appeared to elude those who spent years developing them (and I blame all from orthodox pro-Moscow parties through to the most internationalist of internationalists for that particular failing). And so it is with the Green Party and class and the coming dispensation. I’d tend to take a pessimistic view of such matters and suspect that if climate change isn’t managed in a humanistic fashion then some of the ‘solutions’ might take a very hard-edge right wing character.
In any case, it is impossible in a modern functioning liberal democracy to take political positions which are entirely detached from left/right or class. To pretend otherwise is to misunderstand the fundamental nature of those societies and the power relationships within them (remember the difficulties the Liberal Democrats, another operation who eschew the concept of class, got into at the their last Party Conference as they sought to square that circle). And to reify such a misunderstanding to something close to a truism, or at the least a badge of honour, is to demonstrate – if not an actual vacuity – a problem at the heart of a project.
It is also a product of a party culture, one which is for the most part middle class. No change there from our other parties, one might say, and one might be right. But without an ideology at least with some nodding acquaintance of class (and here I’m suggesting this operates for both left right and centre – indeed Fianna Fáil have managed to turn it to their advantage across the best part of a century) the possibility, no – the awareness – of the impacts of policy decisions will be lacking.
Let me hypothesize for a moment. Imagine, if you will, a newly reinstated Fianna Fáil led Coalition government which is largely tone deaf to the implications of its policies after ten years in power. Times are not as good as they were and it decides that in order to restore some financial “order” it must cut back the Medical Cards for the elderly and introduce means tests. The suggestion itself emanates from a member of another political party in the government, a party of the right. Fianna Fáil knows that this is tricky. It’s basic instinct for recognising this is now intermittent, it’s populism but a shadow of its former glory, but it remains savvy enough to run the proposal past the small more radical environmentally minded party which is also part of the Coalition. They raise no significant objection. They, after all, have no ideological reason for doing such. In fact their own health policy is rather vague on such matters. There is much talk of primary care, but nothing hugely informative as to funding or structures. And so it goes. Fianna Fáil misreading this as an indication that the policy will be tolerated, if not loved, proceed to announce it at the Budget. Chaos ensues.
Now, I’m not saying that is how it happened. I suspect that that might be an element of it, but in fairness few commentators on the day of the Budget were in a position to predict how this would play out, or the ferocity of the public response. But the fact that it is a not implausible reading of the situation tells us something perhaps of our own expectations of such matters and something about the nature of the Green Party.
One might suggest too that if one casts an eye over the past three decades of the Green Party and its successor one will see a very conscious effort to find positions that were distinct from the left and right. Hardly a surprise, for any party there is a necessity to demonstrate its uniqueness. For the Green Party the problem was that its radicalism of many issues has been similar, if not quite the same, as that of the left and further left which has led to a belief that it is of those. Well, yes… and no.
But then look at the place the Green Party is today and consider where have significant portions of their previous platform have gone. And here I’m not talking about transitional issues such as Tara or suchlike which are contingent on time and will for better or worse vanish into the mists, but more long-held beliefs. But here is the curiosity. What precisely were those long held beliefs? Basic income, well that slipped off the radar some while back (it’s still in policy but way down in the tax credits area). And for the others many policies, as with Tara or Shannon, were of a sort that broadly any formation on the centre or left could sign up to with little worry.
And here another political dynamic is apparent which may have more marked problems for the Green Party than other parties. We are all aware of the near-macho requirement for left parties to jettison policy as a mark of their political ‘maturity’. We saw something of a fire sale of such at the last election with the Labour Party and Sinn Féin vying with each other over issues such as personal taxation and corporate tax to present the most ‘responsible’ face to the electorate. Remember, these are avowedly leftwing parties, both pitching in a way which is near-indistinguishable from the centre parties. Near-indistinguishable? I’m being too generous. Indistinguishable.
And that’s not a lash at them to restore some balance at my having produced a critique of the Green Party, but merely to point up that for the Green Party the dynamic can operate in a potentially more pernicious fashion. When the bottom line is the planet itself there is really no bottom line at all in the face of general political activity. Hence the concentration on ‘business-friendly’ rhetoric in the past number of years, hence the push to government as if government in and of itself is a validation of their project. Hence sitting at Cabinet table and acquiescing to co-location, etc (any chance of a change there now that the balance of forces have shifted in the past week?). And most importantly, the concentration on the centrality of climate change to the near-exclusion of all else. As long as the former is being addressed all is well-ish.
But the obvious problem there is that government isn’t about a single issue, however important. It’s a process of compromise and negotiation, of retaining a political base in the face of competing demands and pressures. It is about enabling a society, with all that that entails. It is most importantly, if one does – as indeed I do – believe that climate change is a near existential problem, about shaping a societal response which has to have a collective face and generating the broadest possible coalitions of the people to do so. But the clue is in the term ‘collective’. That means that, like it or not, there will be options for left positions and there will be options for right positions and there will be the consequent necessity to have well thought out and credible policies to determine between them and – if we are fortunate – to provide that humanistic left of centre approach that I mentioned earlier. We’ve just seen an object lesson in the limitations of the use of the word ‘tough’ in our political discourse. A little bit of conviction, some rethinking and some effort to convince wouldn’t go amiss.
While their drop of one percentage point in the most recent poll is far from catastrophic they might do well to reflect upon the trend. And also on a further political reality which is that despite the stringent and near-hysteric calls for self-sacrifice and patriotism from the usual suspects on the centre right as regards this Budget the people weren’t buying, even in the wake of the most serious financial dislocation in generations.
That being the case, and given the fuzziness of their policies in a range of social areas far beyond healthcare, how do they believe they can bring that same people with them to make the sort of sacrifices that may be necessary to implement even the most marginal changes necessary to combat climate change?
Quote of the weekend…Matt Miller on Left, Right & Centre… October 28, 2008Posted by WorldbyStorm in US Politics.
1 comment so far
“I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms,” said Greenspan.
“…Now Alan Greenspan tells us?”
Some further thoughts about the current Budget woes… October 28, 2008Posted by WorldbyStorm in Irish Politics.
Some points made over the weekend in the Sunday Business Post are worth considering. But perhaps not for the reasons the author of those points might think.
Cliff Taylor, writing about the current Budget debacle, has an interesting analysis of the situation. He argues that:
The government’s decision to back down on the over-70s medical cards and the 1 per cent income levy may have been politically essential, but the brouhaha has distracted from what should have been the key message from Budget 2009. Put simply, if economic conditions continue to deteriorate, we will be facing a full-scale public finances crisis.
First he makes a point that is central to his later argument…
Even if the relatively optimistic assumptions underlying the budget are broadly met, the government still faces a huge job in trying to keep borrowing from spiralling higher. Either way, many more groups will be following the over70s, the students and the farmers onto the streets over the months ahead. Taxpayers may be among them.
To which one can only ask, which ones… for therein lies a tale.
He comprehensively outlines the various problems:
Next year, according to Brian Lenihan’s budget sums, we will have to borrow €4.7 billion to fund current spending – in other words the day-to-day costs of running the country.
When you add in further borrowing to fund state capital investment spending, total borrowing (using the EU general government measure) will be over €12 billion, or around 6.5 per cent of gross domestic product (GDP). Borrowing to fund investment projects is justifiable. Borrowing to pay for day-to-day costs is another matter.
The reason for the rapid turnaround is the extraordinary collapse in property-related tax revenues. Here the real problem for the exchequer is not so much the drop in prices as the lack of activity. Without second-hand houses being sold, stamp duty is not paid; without new homes being build and sold, Vat receipts are hit.
Which leads to the following deplorable situation…
The difficulty for the government is that its authority in addressing this situation is now questionable. But if we have marches on the street every time there is a cutback – and row backs here, there and everywhere -we will never get to grips with it and we risk entering a very damaging downward spiral of higher taxes and slow growth.
There is no magic bullet. Opposition noise suggesting that somehow the money can be found by taxing the ‘‘rich’’ is nonsense. There is no easy way out. But the first job for the government is to communicate the gravity of what we are now facing into.
Interesting, isn’t it? The idea that ‘taking the “rich”‘ is ‘nonsense’. And note that the word ‘rich’ is in inverted comma’s. Of course, that raises another question. Just why is it ‘nonsense’? To dismiss the idea out of hand is inadequate as a response, particularly since he earlier notes that:
And then there are taxes. Further hikes are inevitable. Any hope that the carbon tax would be a revenue-neutral levy – with money raised through taxing polluting fuels redistributed through other tax or welfare measures – will be quietly forgotten. Next year’s carbon tax will have to raise a whack of money.
Other significant tax increases will also be necessary, unless the knife is really taken to spending. The risk is that higher taxes further depress growth and spending, prolonging the recession and hitting employment.
So, let’s get this straight. Tax increases are ‘inevitable’, but taxing the ‘rich’ is not a solution, or not even part of the solution. And note that he suggests initially that ‘taxpayers’, as if some sort of breed apart, may well be next out on the streets – presumably, though, he regards ‘taxpayers’ as defining those on certain incomes… but which, if not inclusive of ‘the rich’? We can only surmise that for him the taxes must be soaked from the broad mass of taxpayers and those with the wherewithal or the cunning to evade such measures will continue to do so.
Odd that. Michael Taft has been parsing the outcomes from the tentative notion of raising revenues from taxes on the… er…rich and super-rich and arriving at some very compelling conclusions. Moreover his approach would be at least partially detached from productivity in the economy and therefore essentially neutral in its impacts on economic activity.
I like that solution. A lot. But this is a Fianna Fáil/Green Party/rump PD Coalition, so calculating the odds of that being implemented – or at least a serious tax taking that format, since there were some noises about such a measure over the weekend perhaps from an FF desperate to grab back its ‘populist’ garb – I come up with a figure close to zero (and curiously I seem to get the same figure for any Fine Gael/Combination of others Coalition). So for something a little less heady, consider Finfacts which notes that in 2006 some 31.9% of PAYE taxpayers were on the higher rate, or some 620,900 in total. Now if we were to add even a minimal increase of a percentage point to that rate that would make an addition to the public finances. Not huge, admittedly, but something. But seeing as I’m all for progressive taxation being… progressive, and not restricted to PAYE earners either, I would hope that we might see a sliding scale for those on greater and greater gross incomes. Indeed Finfacts has an interesting quote from Revenue on the costs the reduction of tax rates incurred during the past decade. Hard too to see those on the higher rate who were brought into such a regimen – if it were pitched at that rather low introductory rate – finding too much to complain about, and although granted in a time of reducing economic activity the tax base might dry up, well, we still have the suggestions of Michael Taft. So both those on, what shall I call them, ‘higher’ incomes (and check out the CSO figures on employment, most interesting) and those who are actually rich and very very rich indeed would be given the opportunity to do their ‘patriotic’ duty. Still, I note that Taylor doesn’t recommend the government going out and impressing upon those the need to face tough times.
Returning to Taylor again there is a certain unreality to his thoughts, as when he argues:
Somehow, amid all the post-budget noise, the gravity of the situation facing the public finances has got lost. Unless we get a grip we will be heading back to borrowing figures of 8 to 10 per cent of GDP and a rapidly rising debt burden. This would have a disastrous impact on confidence and business investment of all kinds.
Except that there already is a disastrous impact on the confidence of business investment of all kinds through the melt-down in financial institutions (something, by the by, that Vincent Browne also convincingly points up some major issues with the current government bail-out, which as he notes has not stemmed the precipitous dip one bit since its announcement).
And then let us note that far from there being ‘no magic bullet’ Taylor actually does propose something that will help… except it’s the usual solution that the centre-right is now entranced by.
One way to progress might be a much accelerated early retirement scheme [in the public sector]. Time will tell how the government addresses this one. Cutting non-pay elements of day-to-day spending is equally difficult, as it tends to hit services to the public directly. Yet there is surely room here for a cull of a whole range of programmes and initiatives. Again, the key issue is how this will be achieved.
But a better question might be how this is meant to assist the economy, an economy which has grown with, broadly speaking a low growth rate in the public sector during the last decade.
I find this concentration on the public sector, and aversion to the very idea of progressive taxation (which is implicit to Taylor’s argument) fascinating. Yet again we see the state portrayed as an entity whose function is (with reluctance) to prop up a financial sector which has comprehensively failed – and is continuing to do so (those stats of Browne’s are pretty scary), and which is otherwise there almost as an inconvenience whose assets (the public sector) are to be looted by the ‘productive’ sectors of the economy. That such an approach is entirely self-serving (in a sectoral sense) appears to utterly escape its cheerleaders in the media. But it would be worthy of further scrutiny and publicising in the broader political arena by a left which has been given a stunning opportunity to makes its case.
Meanwhile, from yesterday’s Irish Times…
A spokesman for the Green Party said they recognised it was a difficult poll finding for the Government, coming at a time of unprecedented international calamity in financial markets.
“But for the Green Party, it is a solid result in keeping with opinion poll trends since entering government 16 months ago. People recognise we are there to do a specific job on environmental and other issues,” he said.
Yes, but which ‘other issues’?