Dublin Chamber of Commerce speaks unto the nation… September 1, 2011
Posted by WorldbyStorm in Economy, Irish Politics.trackback
This weekend in the Sunday Business Post no end of fun to be had parsing out a contribution from Dublin Chamber of Commerce Chief Exec, Gina Quin, who offered the reader a long wish list from said organization and its members.
Some eyebrow raising stuff in there, and no mistake. Consider the following:
Unfortunately for businesses serving the domestic market, the lack of a government ‘business plan’ has citizens worrying rather than spending?
Really? I’d have thought, like many of us, that it was other factors… ah, here’s an outline of them…
‘Persistent unemployment above 14 per cent, pay cuts, higher tax and a series of variable rate rises in the last year – including a 0.25 per cent increase in the ECB base rate in April which affected tracker mortgages…’
And that’s taken from…the front page article by Jon Ihle of the same edition of the Sunday Business Post.
But Quin has identified different factors. Current expenditure being the first and foremost. And the €2.1 bn the government has already sought to save isn’t enough. Nope, Chambers ‘feels this should be closer to €2.5bn’. No reason is given as to why this should be. But ‘the primary issue’ is…
‘…reform of the public sector, focusing on the effectiveness of its delivery, pushing or exceeding the bounds fo the Croke Park Agreement. June’s progress report on the agreement was welcomed by the unions and why not? The agreement in effect rules out outsourcing public services and continues a flawed expenditure reform approach. Reform needs to focus on the effectiveness of public service delivery, which will require departments to not only know how much is spent but how much is bought.
Each department manager and public servant needs to demonstrate the linkage between resources and outputs against other options, such as outsourcing.’
And while we’re left pondering the track record of this gift from the state to the private sector, oops… I mean outsourcing, she’s onto another topic.
.. each local authority should be given a current spending reduction of 3 per cent per annum in addition to any cost saving measures that may already be underway.
She throws in the aside that ‘this approach has been effective for local authorities in England’ somewhat ignoring that we start from a much lower base of funding for local authorities than there.
And lest one be concerned that this might be problematic given that lower funding base, perhaps the following will be consoling. Or perhaps not…
A reduction in spend for local authorities does not necessarily mean a poorer output of services.
One has to admire the ‘not necessarily’. To some extent. But she continues:
‘It is possible to deliver the same quality of service at a reduced cost by exploring alternative options such as the outsourcing of local services.”
Now you might think that all this seems pretty aspirational given that exploring an alternative option is not the same as reaching a conclusion on its efficacy, but what’s odd is that Quin and DCC get it on the global level. They’re a lot less cheery about the reductions in capital expenditure and they’re clear in their wish for the state to step into the breach there.
That aside, to be honest it’s hard to see how any of the proposed measures if implemented will prevent many many more citizens from worrying rather than spending.
The Cedar Lounge Revolution 
These parasites never waste a good crisis.
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Just to address your comments-
Confidence is a major component of spending. (Look to at recent commentary from the Central Bank and others; though on its own its not a panacea.) Suprisingly, there are segments of the population in Ireland that do have the money to spend but are concerned as to what the future will hold in terms of taxes on them (Look to the savings rate). Therefore, they have decided not to spend (We got a sense of this when some of our retail businesses reported that Minister Noonan’s call to buy did get people buying). In uncertain times its very prudent to save, while the government has given a framework to getting back to a Exchequer Balance its less clear to the average household how they will achieve it. If the Government brings down the tax bands that will increase the income tax you pay. We are just saying that people want to know what the plan for taxes and cuts are going to be. It’s a common sense recommendation, and the ESRI has followed suit today.
While the growth in Ireland’s exports is a positive, its impact on employment is not as great as an equivalent rise in domestic consumption. Jump starting the domestic economy will in our current circumstances be started by those than can spend doing so which will create a few jobs and those few will lead to a few more etc.
As to your gift of the state of the state comment, I believe we pay taxes to receive services who delivers those services is less important than the state getting the best value for money in delivering. This goes back to one of the key concerns you raised about high taxes. As at the moment the goal is to make Tax + Non-tax income (which is small) = Expenditure, or as close as we can come. One example, is the City of London Corporation where Accenture is working with them to save £28 million, the more money saved the bigger Accenture’s fee; if a pre-determined saving is not achieved, the firm loses out (http://www.irishtimes.com/newspaper/finance/2011/0513/1224296838806.html). Who can offer the best value for money to cash strapped tax payers? We’re not saying its definitely private sector in every case but a bit of competition for these services might help push efficiencies in the public sector as well.
Dublin Chamber in its budget submission, and many past submissions on Local Government finance and reform, does believe that the local authorities’ tax base needs to be broaden. Efficiency needs to be driven by the people that the authority serves. We currently spend €4.6bn on local government. The only Government departments with higher current expenditure are Social Protection, Health and Education. Its about twice the spend of Justice, while adding up Agriculture, Transport and Defence would costs you €3.2bn and the remaining 10 department votes is €4.1bn.
Due to the nature of this piece we couldn’t mention all the details of our submission, which we believe will with minimal cost help jump start some small businesses that will then be able to hire. The link to our full submission is here – http://www.dublinchamber.ie/Uploads/Dublin%20Chamber%20-%20Budget%202012%20Submission.pdf
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“who delivers those services is less important than the state getting the best value for money in delivering”
It is important to the people whose labour delivers those services. Or don;t they figure in teh equation?
As for “jump starting” the domestic economy…Hmm. With 15% unemployment and the government intent on taking billions more out of the economy I’m more than sceptical that any jump starting would light any sustainable flames, but don’t let that dampen your optimism, I wouldn’t want my negativity to ruin the economy’s karma.
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“We’re not saying that it’s private sector in every case…” What an admirable concession, you filthy opportunist vulture.
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No reason to get personal, even if we tend to strongly differ with his thoughts, or rather that of the organisation he represents. In fact I think its useful to get a further sense of what the Chamber believes so for that I’m glad of the response. I’ve a few thoughts I’ll put in a comment later.
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It’s not personal. It’s a comment on the class he represents.
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I think words like filthy and vulture bring an edge to a discussion which impedes engaging directly with the topic at hand, as well as contextually being personalised. There’s a lot to critique and be critical of the original article and the response but simply emoting about it rather than engaging critically seems to me to cede a degree of authority if not indeed legitimacy in terms of the discourse to him and them. Or to put it another way I could spend my life berating others whose beliefs I strongly disagree with but all it would do is perhaps satisfy me while in no way at all assisting me in finding methodological tools to combat their
discourse.
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I’m not interested in dialogue with these vultures, nor am I looking for the opportunity to practice my debating skills.
It’s your website, and far be it from me to tell you what to do, but as a personal preference I’m of the view that Conor’s response to the appearance of a Green Party press officer on Dublin Opinion could serve as a useful model for dealing with these sort of people.
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It’s unnecessary.
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I think the danger there is that that can become an abdication of responsibility. What I most hear outside is that ‘there’s no alternative’. and that’s because there’s a vast gulf between orthodoxy which is self sustaining and self referential and presents itself as an conceptual fair accompli and everything else. People don’t generally trust the ‘everything else’ and where they gift it representation that is generally as a protest to the orthodoxy rather than as a principled adherence to it.
I’m not interested in protesting against the orthodoxy, what I am interested in doing is pointing up where and how it is
inconsistent and pointing out achievable alternatives beyond it. In other words supplanting it. But to do that one has to convince others that one has a thorough understanding of the orthodoxy and the alternative.
Now I can sit here and lambaste Patrick in a personalised fashion drawn on baroque rhetorical flourishes which have no traction whatsoever in our political discourse or culture or I can as others have here begin to point up those contradictions and inconsistencies as a first step to laying the ground for those alternatives that I speak of. The first is easy and takes next to no time with next to zero chance of changing hearts and minds. The second is difficult and time consuming but to me at least holds out the chance of changing those hearts and minds.
Moreover Id point to the fact that in conversations with people I’ve found it vastly more effective to be able to draw in Michael Tafts researched facts on the economy to undermine lazy right wing assumptions than any amount of dissing would. Because many people want something tangible to support their instincts about what and why is wrong with the orthodoxy.
It could well be that I’m wrong but in general terms all i can point to is that I’ve found the more courtesy injected into a context the more chance of learning something useful.
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By the way, I should add I’m delighted someone from the Chamber responded on this site. It provides real meat for us to engage with, which surely is at least in part the point of all this – no?
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Patrick King’s advocacy of outsourcing of public services as a means of reducing government spending clearly shows that he, and the Chamber of Commerce, haven’t really thought this through. Not that one would expect them to, but you’d think they would at least try to fire up a few braincells before they opened their laptops.
As LATC points out who provides public services matters to the people who work in public services. Mr. King should explain how outsourcing public services with no diminution of terms and conditions for workers combined with the provision of a profit margin for the private operator will lead to reductions in government spending, given that the state will have to pay for the services it formerly provided using funds from general taxation. The answer, of course, is that the workers in those outsourced serviced will have their pay and terms and conditions gutted. Therefore, outsourcing is bad news for workers in every case. It’s extremely dishonest of the Chamber of Commerce to not make that latter point clear.
Also, the experience of the UK shows that the consequences of the outsourcing of public services are beginning to take on catastrophic proportions. Not, of course, for the private owners, they’re well insulated, but for those dependent on public services. The UK rail industry is a classic example where it costs a weeks wages to travel by train from London to Birmingham and we’re not far way from the STG 10,000 season communter ticket. All the while taxpayers money continues to be funnelled to private train operators to underpin profits.
Then you look at the recent Southern Cross nursing home scandal where a private equity group, which owned over 800 nursing homes, used the income streams from those homes, i.e. charge to residents, to borrow huge sums on the money markets pushing the company to the brink of closure and with it the 800 plus nursing homes.
Finally, Mr. King cites Accenture’s role in assisting the City of London Corporation reduce it’s spending. Is this the same Accenture that provides extensive tax planning services to companies to allow them reduce their tax liabilities to almost nothing?
And can business mouthpieces please stop trying to speak on behalf of the ‘taxpayers’. F**k all business pay any tax, and the tax base in this state is based on workers income and indirect taxes levied disproportionally on workers.
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Good comments.
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In general I think the idea that an economy can be “jump-started” by increased spending by the affluent, while a large majority of potential consumers are seeing their living standards (and hence the potential to spend) falling, is hocus-pocus. I would love to know on what practical examples this thinking, assuming it’s not just wishful thinking, is based.
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Indeed. Perhaps the Chamber of Commerce has a skewed membership which weighs the retail sector more heavily than others, in which case the “spend more” mantra might make sense to them in terms of increasing their turnover. But even at that it ignores the fact that the discretionary retail spend by the affluent in society tends to be on imported goods, which does little or nothing to create local jobs outside of those who stack shelves on minimum wage (or are paid by the state via job-bridge training schemes), and moves wealth out of the state. It really is a case of self-interested self-preservation by the merchant class, masked as a patriotic call to duty.
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Patrick, just to address your comments, and appreciate the response. Obviously we have strongly divergent views on these matters albeit I think you’re correct to push the issue of capital investment.
Confidence is a major component of spending. (Look to at recent commentary from the Central Bank and others; though on its own its not a panacea.) Suprisingly, there are segments of the population in Ireland that do have the money to spend but are concerned as to what the future will hold in terms of taxes on them (Look to the savings rate). Therefore, they have decided not to spend (We got a sense of this when some of our retail businesses reported that Minister Noonan’s call to buy did get people buying). In uncertain times its very prudent to save, while the government has given a framework to getting back to a Exchequer Balance its less clear to the average household how they will achieve it. If the Government brings down the tax bands that will increase the income tax you pay. We are just saying that people want to know what the plan for taxes and cuts are going to be. It’s a common sense recommendation, and the ESRI has followed suit today.
I’m dubious about that line of argument about ‘confidence’. Fundamentally it seems to me that one has to have sufficient income available to spend in order to be able to spend. As with the quote from the SBP front page article it seems to me that many, perhaps most, in this state simply will not – if they are even able to do so now – spend because their incomes, and more particularly their disposable incomes are already much diminished after three and an half years of wage freezes/cuts, etc, and set to decrease still further across the next three years.
Even as it stands the figures being bruited around as regards upcoming cuts themselves diverge, ESRI proposing €4bn in the next budget, the Government supposedly seeking approx €3.6bn and so on that merely adds to instability and an unwillingness to spend [given that knock on effects of those cuts will almost definitely incur direct costs to people where previously there were none – and whatever alterations to taxes occur etc].
I cannot see how that can have anything other than a further depressive effect on expenditure. I’m a bit amazed that anyone would have risen to the challenge of Michael Noonan’s call but I imagine it depends on what sort of goods.
By the way, I’m not at all against the idea that there should be an outline of what’s coming down the track, simply I doubt that knowing will lend confidence that will impel people to spend. I think a more likely, and arguably more rational, response would be to hold onto whatever funds one has for fear that the global financial situation enters an actual double dip with the consequent knock-on effects for growth and on revenue streams and following on from that social provision in this state. And again, how much do people actually have and how much will they have left given the impact of the upcoming measures proposed.
Finally, the global economic situation is worsening… http://www.guardian.co.uk/business/2011/sep/01/weak-manufacturing-data-double-dip … and the austerity measures already taken look as if they are in part responsible and in part about to collide with that worsening.
While the growth in Ireland’s exports is a positive, its impact on employment is not as great as an equivalent rise in domestic consumption. Jump starting the domestic economy will in our current circumstances be started by those than can spend doing so which will create a few jobs and those few will lead to a few more etc.
I’m struck by the fact you don’t address the point about the Croke Park Agreement. But more importantly, in a sense, is that as we know Ireland’s export growth has minimal impact on employment in this state and worse again despite that growth in the rest of the domestic economy there’s actually further decline. That’s why I’m also very dubious about your proposition that spending will create jobs. In any event this would seem to me to be but a trickle given 14 per cent plus levels of unemployment. Even the ESRI in its most sunny mood only sees 12,000 new jobs appearing next year, and that is very contingent I’d suspect on the global situation – even if the jobs themselves are created by indigenous employers. It’s all pretty thin gruel, isn’t it?
As to your gift of the state of the state comment, I believe we pay taxes to receive services who delivers those services is less important than the state getting the best value for money in delivering. This goes back to one of the key concerns you raised about high taxes. As at the moment the goal is to make Tax + Non-tax income (which is small) = Expenditure, or as close as we can come. One example, is the City of London Corporation where Accenture is working with them to save £28 million, the more money saved the bigger Accenture’s fee; if a pre-determined saving is not achieved, the firm loses out (http://www.irishtimes.com/newspaper/finance/2011/0513/1224296838806.html). Who can offer the best value for money to cash strapped tax payers? We’re not saying its definitely private sector in every case but a bit of competition for these services might help push efficiencies in the public sector as well.
There we disagree, I think that who delivers services is hugely important. Moreover I strongly dislike having to pay for local services through local charges rather than through my general taxation. At the very least it leads to distortions based on geographic location, where costs are kept lower in one spot due to demographic/geographic factors whereas elsewhere due to differing factors they’re higher. I think that’s iniquitous in itself. Regarding my point on the gift of the state, having worked on both sides, both public and private sector, albeit on contract in the former, I’ve seen the interface between private and public sector at first hand and I’ve found it highly unimpressive with commercial enterprises running rings around a public sector which simply hasn’t the in-house expertise to manage or in certain cases understand contracts properly and with consequent overspends on equipment purchases, etc, etc. The history of sub-contracting services to the private sector, or offloading them entirely, doesn’t strike me as a particularly happy one, either in this state or elsewhere.
Dublin Chamber in its budget submission, and many past submissions on Local Government finance and reform, does believe that the local authorities’ tax base needs to be broaden. Efficiency needs to be driven by the people that the authority serves. We currently spend €4.6bn on local government. The only Government departments with higher current expenditure are Social Protection, Health and Education. Its about twice the spend of Justice, while adding up Agriculture, Transport and Defence would costs you €3.2bn and the remaining 10 department votes is €4.1bn.
Again, here I disagree for the reasons stated above. But I really don’t find the idea that local government spending should be high relative to other departments that strange. Consider the range of services covered by Justice [including the Defense Forces now IIRC] and then those covered by Local Government. They’re starkly different.
So clearly we’re not going to have much of a meeting of minds on this.
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Well, first it’s probably best to address the ‘who we are’ sorts of comments first. While we represent big and small business in range of sectors (about 8% retail), our members are people with families. They also feedback to us not just about the concerns they have for their business but for their staff. A good business recognises the value of people that they work with, and equally those people value the company they are a part of. So we hear it all. Here is a link to opinion piece in SBP – http://www.sbpost.ie/news-features/comment-confidence-is-crucial-for-business-performance-58288.html
Interesting that there was a good bit of questioning on my ‘jump start’ comment. Here is the line from the Central Bank: “the greater the level of detail that can be decided upon and announced in terms of the overall fiscal adjustment package, the better. This would help to remove uncertainty for domestic households and firms and contribute to confidence in the adjustment process overall.” The introduction to the ESRI Quarterly Economic Commentary is full of terms like ‘uncertainty’, ‘anxiety’ and ‘turmoil’. Oddly, it’s not the affluent that seem to be the ones not spending that could but those without big mortgage debts and perhaps on secure incomes who are saving.
@CMK – I disagree. Productivity gains do not require loses in pay for workers they require process improvements. Here-to-date this hasn’t been delivered. One problem in reforming the Irish public service has been input = output. Jerry Sexton gave a paper at the SSISI in 2006 which illustrated this phenomenon (http://www.tara.tcd.ie/bitstream/2262/24079/1/jssisi%20sexton%20paper%2006-07.pdf).
Some of our piece was edited down so to clarify in England local authorities were required to deliver annual improvements in efficiency of 2.5% each year from 2005/6 to 2007/8 with many significantly exceeding this target. This target was increased to 3% per annum for 2010/11. More examples and information is available in Dublin Chamber’s Supplementary Submission to the Local Government Efficiency Review Group (http://www.dubchamber.ie/Uploads/Submission%20LA%20Efficiency%20Review%20Group.pdf).
The €2.5bn figured is based on EU/IMF MoU figures and the comments by the Minister for Finance prior to the summer recess.
Commercial rates in Dublin pay for 40% of local government, that’s not taking account of other charges. There are also employer contributions and corporation tax. But as I said our members are business people living in Ireland and paying income tax. [Perhaps worth borrowing the analysis from Revenue’s 2009 figures (http://www.revenue.ie/en/about/publications/statistical/2009/index.html) on Ireland’s income tax system from Ronan Lyons (http://www.ronanlyons.com/2009/07/28/a-little-quiz-on-irelands-income-tax/): Ireland’s top 0.5% of earners, the 11,714 people who earned more than €275,000 in a year, paid almost 18% of all income tax, over €2bn in total. Their average tax rate was 27.5%. Almost 770,000 people earned less than €17,000. Understandably, given tax credits, these workers paid a tiny amount of tax, €20m in total. Their average tax rate was about 0.5%. It’s in the middle, though, where things seem to go all screwy. The median earner, earning about €25,000, paid just 4% in income tax! As I argued before, we seem to have got ourselves into a situation where the typical Irish worker pays hardly any income tax and yet seems to think they are heavily taxed.”]
There is a lack of accountability in the delivery of services because the connection to revenue is so strained. Its mention having general taxation serving this purpose but I’ve my doubts that ‘I’ve paid at the office’ approach creates a lack of fiscal appreciation and accountability amongst households.
Thanks for opportunity to contribute.
(A good dataset for some of the figures I mentioned is at http://databank.per.gov.ie/)
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Patrick, re: productivity in the public sector. Here’s a simple formula (I can’t render it in mathematical formulae as I’m not a a mathematician or economist, so you may not understand it fully, apologies in advance):
Pay cuts+reductions in numbers+steady and/or increased demand for services=increases in productivity. The public sector has delivered huge increases in productivity over the past three years – even though large numbers of workers have been demoralised in doing so.
And another thing, friendly advice, it might be a good for a Chamber of Commerce not to push the oul ‘productivity’ thing too much. People might start to ask awkward questions. Because if, as capitalist propaganda insists, workers are rewarded for productivity then everyone working for Intel would be taking home a million+ a year and the take home pay in all those medical device factories in the Midlands and West would be a minimum of six figures. Yes, let’s reward every private sector worker for his/her real productivity; wages in that sector would double automatically, but that would leave a whole generation of journalists bereft. Eoghan Harris would possibly lose the will to live.
Finally, sorry citing Ronan Lyons is my personal version of ‘Godwins Law’. Having compared his blog post on teachers pay with the OECD figures he based them on, I don’t think he’s as methodologically rigorous as he thinks he is. And Pat Kenny should have been sacked for basing an entire ‘Frontline’ programme on that one blog post that was very weak.
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Interesting that there was a good bit of questioning on my ‘jump start’ comment. Here is the line from the Central Bank: “the greater the level of detail that can be decided upon and announced in terms of the overall fiscal adjustment package, the better. This would help to remove uncertainty for domestic households and firms and contribute to confidence in the adjustment process overall.” The introduction to the ESRI Quarterly Economic Commentary is full of terms like ‘uncertainty’, ‘anxiety’ and ‘turmoil’. Oddly, it’s not the affluent that seem to be the ones not spending that could but those without big mortgage debts and perhaps on secure incomes who are saving.
The thing though is that the Central Bank does not, and most likely cannot, quantify the effectivity or otherwise of the ‘jump start’. Again, the CB’s statement seems no more or less aspirational than that of the Chamber. It certainly doesn’t seem as if it heralds inevitable growth. As regards ‘secure incomes’, I wonder how many genuinely, whether public or private, believe that they have secure incomes. That too feeds into the general unease and anxiety and aversion to expenditure.
[Perhaps worth borrowing the analysis from Revenue’s 2009 figures (http://www.revenue.ie/en/about/publications/statistical/2009/index.html) on Ireland’s income tax system from Ronan Lyons (http://www.ronanlyons.com/2009/07/28/a-little-quiz-on-irelands-income-tax/): Ireland’s top 0.5% of earners, the 11,714 people who earned more than €275,000 in a year, paid almost 18% of all income tax, over €2bn in total. Their average tax rate was 27.5%. Almost 770,000 people earned less than €17,000. Understandably, given tax credits, these workers paid a tiny amount of tax, €20m in total. Their average tax rate was about 0.5%. It’s in the middle, though, where things seem to go all screwy. The median earner, earning about €25,000, paid just 4% in income tax! As I argued before, we seem to have got ourselves into a situation where the typical Irish worker pays hardly any income tax and yet seems to think they are heavily taxed.”]
Two thoughts here. Firstly I actually agree that everyone should be nominally within the tax net. Even a small and nominal payment is better than no payment at all, and whether that payment is transferred back in the form of a credit doesn’t worry me at all. I see that as a basic pillar of social solidarity. That said one has to enquire as to why close enough to 3/4 of a million are on such small wages. There’s another point which is often forgotten, those paying very low income taxes are on very low incomes but they don’t pay no tax at all. They’re hit by the particularly regressive taxes such as VAT which are a lot harder for them to bear than people on medium to higher incomes. That’s central to this discussion as well. Equity isn’t simply in the context of income taxes but of all taxes and ultimately is a factor of how able an individual taxpayer is to bear the weight of taxation.
There is a lack of accountability in the delivery of services because the connection to revenue is so strained. Its mention having general taxation serving this purpose but I’ve my doubts that ‘I’ve paid at the office’ approach creates a lack of fiscal appreciation and accountability amongst households.
And yet this is the way it works with a very broad range of services, such as An Post etc where it’s difficult to believe that their funding through general taxation leads to less accountability. Moreover you’re still not addressing the issue of inequities which arise due to different levels of taxation/provision of services in different areas under the local government funding model. And you’re also to some degree – and admittedly this is only a back and forth by an email equivalent so we’re only skimming the surface – not engaging with the disparities that exist for households in terms of income and the consequent ability to pay or not. Again, so far as with waste charges what we see are profoundly regressive charge structures which bear more heavily on those with a lesser ability to pay.
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@WbS – Indirect taxes are hugely important and in our submission we make the point that increase the higher rate toward 23% will undermine confidence of consumers. Interesting paper on VAT and income here -http://www.esri.ie/UserFiles/publications/jacb201139/jacb201139.pdf
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“As I argued before, we seem to have got ourselves into a situation where the typical Irish worker pays hardly any income tax and yet seems to think they are heavily taxed.””
That’s because 36 per cent of the government’s tax take comes from VAT.
In terms of wage distribution, the top one per cent of PAYE earners had a combined wage that was greater than that of the bottom 32 per cent – in other words, just 23,000 people earned more in wages than the combined wages of over 600,000 PAYE workers. The figures for the top one per cent does not include proprietary directors, nor does it include income from other sources.
Ronan Lyons is a right-wing c***.
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I’ve been working on these figures recently, so here’s something else to ponder:
According to the income distribution statistics produced by the Department of Revenue, the median PAYE wage in Ireland in 2008 was just under €27,000 – that is, around half of all PAYE workers earned €27,000 or less that year, with almost 64 per cent earning less than €35,000. There were almost 120,000 married couples with a single income of between €1 and €27,000, while over 50 per cent of all single-income married couples earned less than €35,000.
In terms of single females, the median wage is much lower – at €20,000 – with 65 per cent earning less than €27,000 a year. The figures are similar for single males, with 50 per cent learning €20,000 or less, and 62 per cent earning less than $27,000 a year.
If the top 23,000 earners want to pay less income tax, well, they should take a pay cut then, no?
By the way, the total take from Capital Gains Tax in 2009 was 606 million euro – or 1.46 per cent of all tax paid that year. Now we know from the CSO that the value of Irish residents’ holdings of foreign securities amounts to 1.44 TRILLION euro.
The point here is that the wealth of the top one per cent isn’t generated by the PAYE wage of the top one per cent – however, it is all but certain that the wealth of the 50 per cent of the PAYE workers who earn 27,000 euro or less a year is pretty much generated from their PAYE wage.
Ronan Lyons. What a fucking right-wing c***.
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Something else to ponder – have a look at the litany of wealth management companies ensconced in the tax haven that is the IFSC. They ave 1.44 trillion eurto to play around with, and getting tax breaks to beat the band to do so.
Yep. Ronan Lyons. What a c***.
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That’s not a terribly convincing defence of the “jump-start” theory, is it? No actual practical examples at all.
Re this
in England local authorities were required to deliver annual improvements in efficiency of 2.5% each year from 2005/6 to 2007/8 with many significantly exceeding this target
it might be worth observing that these were years in which the UK public sector workforce, to my knowledge, expanded, and wages and conditions did not decline. Trying to deliver productivity improvements during times of lay-offs, wage cuts and other demoralising circumstances may be a different story.
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@ejh – Gross savings as a percentage of gross disposable income was at 12.9% in q1 2011. This is described as higher precautionary savings. Our recommendation is that by clarifying what the fiscal adjustment package is this will help households and firms plan for the future. With a bit of certainty those with disposable income or for firms with cash to invest they will know what context this will be done in.
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So this is based on no practical historical examples, isn’t it?
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““As I argued before, we seem to have got ourselves into a situation where the typical Irish worker pays hardly any income tax and yet seems to think they are heavily taxed.”
Another interesting factor, as well as the size of indirect taxation, is the history of low workers’ income tax. During the boom it was a conscious strategy of the trade union leaders and their ‘social partners’ (lol) to deliver real income increases while keeping down labour costs to employers by cutting taxation and cutting it again rather than squeezing out bigger pay rises. It was one of the follies of social partnership for the trade union movement opposed at the time by the left. Pooh-poohed of course by most trade union leaders. Charts were provided by union research departments to support each agreement and to show how real wage increases were being delivered. Delivered in part by tax cuts; tax cuts compensated for by construction taxes. It was all part of the cosy club-golden circle of the bubble years. The current counterpart is the union leadership’s stuporific passivity or weasal spinning on the vicious austerity of their ‘partners’ and filiates (the Labour Party) in government.
PS can we please avoid a) personal abuse and especially b) the use of the ‘c’ word. I know it is sometimes used by the nicest guys around but to these ears it still sounds… well the ‘m’ word come to mind.
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+1
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If it walks like a duck and quacks like a duck D_D….
As far as curse words go, history shows that they are neutralised by greater usage, not less.
Just a thought.
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There’s a basic reason that abusive comments aren’t allowed on here, whatever the provocation (I’m talking in general terms) above and beyond the points I’ve made earlier and above in relation to earlier ones about communication, basic courtesy etcetera.
It’s a weapon that shuts down communication and attempts to delegitimise others points of view. Fine, fair enough, but it can as easily be turned right back against us, and indeed in many discussions in the media etc in a low level way already is…. ‘loony left’ etc.
The self defeating aspect of that in terms of us hoping to get our message out seems self evident.
So no, don’t expect us here on the CLR to go down that route and I’d ask anyone commenting on this site to have the basic level of respect for us to avoid doing so too.
There’s another point. The contributions above aren’t by a troll or a person attempting to disrupt this site but are a direct response to a piece I posted by someone taking a very different line but willing to explain it.
I and any of us here would look like right chumps who hadn’t a thought in our heads other than slogans if we didn’t engage in kind.
And we have because that is the dominant discourse in our society on these issues and to combat it we have to be calm, assured and consistent in our responses so that others who potentially might be swayed will accord our general viewpoints legitimacy.
BTW, one of the fundamental reasons the CLR was started up by smiffy, joemomma, Mbari and myself was because we wanted to get away from the Politics.ie like stuff where it devolves into people hurling insults at each other. And that’s the dynamic that occurs when there’s no moderation and no respect for the approaches explicitly taken by those who start up a site. Everybody starts talking and no-one continues to listen. People should think about that too.
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WBS, I engaged with the points raised regarding income tax, giving detailed evidence and analysis to back them up.
I just want to point that out.
Also, I did NOT pass comment on anyone who posted a comment here, but rather on someone who has no problem using personal invective against the left, and indeed freely uses personal invective against the left.
But hey, if you think Ronan Lyons deserves kids’ gloves – even though personal abuse are the rules he plays by – then you have a right to indulge in that sentiment.
I can guarantee though that Ronan Lyons and his lik think no more less of you today than they did yesterday for your stance – that much is for sure.
It’s still as low and as contemptuous today as it was yesterday.
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Sure, but that’s not the point Conor, I’m not looking for his or the Chamber’s respect, nor am I ‘indulging’ anything or anyone.
On this site there are certain approaches which are blatantly clear to everyone who posts or comments here.
They don’t need editorialising by others, everyone is free and welcome to take whatever line they want on their own sites – it’s just the way we do things.
It’s worked pretty well for five years and more now given the disparate views one finds on the republican left, let alone the left more broadly or the right.
Now no one has to like the our approach. All I and the rest of us on the CLR ask is that everyone who comments here respects it.
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Conor, that’s some great research there. It takes patience to go through Revenue reports.
Are you going to work this stuff into an article/book at some point?
It’s pretty pathetic when even Bloomberg publish stuff like this – http://www.bloomberg.com/news/2011-08-29/give-marx-a-chance-to-save-the-world-economy-commentary-by-george-magnus.html …while in Ireland the “Theo-classical” fellas are holding their ground.
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I back WbyS on this one. Maybe I’m too old or too non-confrontational by nature but I’ve always believed that one of the ways in which the left is superior to the right is in its reluctance to stoop to personal insult.
I recommended CLR to an American friend who read it with appreciation for some months, until the comments celebrating Garret FitzGerald’s death caused him to stop.
Re Mr King’s remarks, a geographical point: there are parts of the country that depend more on public service employment to fuel the local economy than Dublin does.Often a private service alternative doesn’t exist at all ; there are no cherries to be picked and a dependence on funding from central government is the only way any level of services can be maintained.
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Croc I hope your friend might be persuaded back no things have got a bit calmer.
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‘now’
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Here’s the “improved productivity” in a nutshell, service provision outsourced to private operators who hire agancy staff on a casual basis, that’s the “flexibility” that translates into profit, squeezed from the misery of workers’ lives.
http://www.irishtimes.com/newspaper/breaking/2011/0902/breaking4.html
EVerything else is just wondow dressing. I’m with Conor on this, it’s class war and it’s no time to be polite.
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“patiently explain”
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It’s not about ‘politeness’ as I’ve now exhaustively explained above. It’s not tolerated on this site, end of story.
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Ok, politeness missed the point, I agree that descending into personal attack distracts from engaging with content of arguments and no question otherwise, rather I mean that I’, not sure the likes of the DCC are going to be particularly open to persuasion via reasoned argument and that given the scale of assault on workers’ terms and conditions that is underway, and given the collusion between the business class and government in progressing an anti-worker agenda, that out of all of that it seems somehow inadequate to debate matters with a rep’ of the DCC, like do we really think it’s going to make any impact on their collective thinking? I do agree that reasoned debate and coherent argument is necessary ammunition in the war for hearts and minds, but I don’t think the business class are suitable fodder for conversion, that’s all. In that sense I agree with Conor that fire should be fought with fire. But yes, I do think your point about keeping the CLR out of the gutter is a worthy one, it’s why we comment here rather than elsewhere at the end of the day.
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Fair enough.
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do we really think it’s going to make any impact on their collective thinking?
No. But it might make an impact on the collective thinking of people who are reading.
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Of course. The question was only about the usefulness of engaging directly in constructive debate with the rep’ of the DCC, given the ideological ravine between the positions. The point Conor was pushing, which I think has equal merit to WBS’s reasoning, is that the likes of Lyons and disciples of that ideology don’t use velvet gloves in promoting their slanted worldview, whether in terms of selective facts and wholly biased interpretations and extrapolations, so why should we? Fire with fire. Without being personally insulting of course, which as you point out has the effect of undermining the validity of arguments and can tend to make neutral-minded readers switch off.
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Conor rightly didn’t use abusive language in his book – even though by your interpretation of his approach it would have been entirely valid because the other side use abusive language. Why not? Because it would have immediately delegitimised the book itself and curtailed to the point of pointlessness the circle of those who would have taken it seriously.
It’s not fire with fire, it’s delegitimising our own position. We don’t gain from ‘fire with fire’, we lose. And we lose big time. Why?
My direct personal experience canvassing, at meetings in communities, campaigns etc from political activity with the WP/DL independent socialists and Tony Gregory now spanning near enough four decades is that not one of those reps I worked with including TG would use such language publicly [short of being attacked directly by someone] simply because the other side has a slanted worldview. I mean none of this has fallen from the sky. The Ronan Lyons of the world are no more a new arrival when the political forces they represent, FF, FG etc have been in charge of this state since its foundation.
If they – those reps I’ve worked for or wth – had publicly used that approach on public fora or wherever it would have alienated the very class they represented because that class wants coherent articulate and forceful [and yes angry, but not over the top] representation.
Now they like us were/are human and out of earshot they might well do so and fair enough. But this site isn’t out of earshot. It’s a publicly acessible place.
I’m a bit amazed to read that there’s no point in engaging in debate with those who hold opposing views. I think people simply haven’t read what the point of this site is about, it’s precisely so that we can discuss and disagree with views both similar to our own and starkly divergent.
Not to change hearts and minds of those we discuss with but so that our understanding is deepened and so that we influence those who aren’t participating in the discussion but are watching on [and also so that we know the lines of argument they will use and be better able to deal with them – and note as with Patrick’s contribution above that the line is very flexible and shifts depending on our counter argument].
Patrick came on here, not in a trolling fashion but in an open way and disputed some of the points made above and from his point of view tried to justify those of the organisation he represents. Do we think ‘fire with fire’ is appropriate in that sense? Is it justifiable for people to use various terms [and we haven’t even reached the fact that many many believe them to be fundamentally misogynistic due to the way they’re used] in that discussion?
And beyond that is the fact that given our moderation policy and the rationale for this site, if we didn’t engage with him we’d be cutting against the fundamental approach that we established five years ago, and finally its just downright disrespectful on a personal and political level to continue posting comments which are self-evidently breaching rules articulated numerous times above.
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WBS, you may be right, I don’t know, you’ve been at this a lot longer than I have so I bow to your instincts and experience, but I’m simply struck by the futility of debate at one level where what seem to me to be entirely rational and reasonable arguments about alternative narratives seem to have little impact upon the actions and rhetoric of even those on the soft Left, lat alone those at the eye of the storm within the power circles who run the state, including primarily the business class, part of which is the DCC, IBEC, ISME, SFA and the like. I agree totally that discussion in general is educational and informative and opinion-forming for those who occupy the middle ground in particular, and for those on a political journey leftwards, and I think that is the strength of the CLR, ILR, Dubln Opinion etc., in providing a mechanism for reasoned debate within and between the various strands of Left thought. I don’t agree that it necessarily serves much purpose to debate with those already committed to the onslaught against workers’ terms and conditions, it’s not likely that debate will colour their actions, they have the winds of change behind them at the moment and it’s fairly evident that it will take more than words to deflect them from their current path.
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But it’s not their minds you’re seeking to change.
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I genuinely see where you’re coming from , but as ejh notes, we’re not talking about changing their [DCC/IBEC etc] minds but those who we hope are listening to/reading us or those who we support.
Let’s put it this way. A post is written here on Dublin Chamber. Someone from Chamber clearly found a link or a google search and came here and thought it worth engaging. Now, if that person can do that then so can anyone, some of whom will have no fixed opinions on these matters or might be persuadable.
Why on earth would I you or anyone want to have an environment here that might alienate those persons who might be persuaded over to our opinion? And because of that what possible purpose does it serve to attack?
Already this whole thread has been characterised by a level of discourse that could potentially put off those who – understandably – find various terms highly offensive, those who believe that even if someone is wrong wrong wrong in their opinion [as by the way I do and haven’t been shy about stating it from the off in my response to Patrick] they deserve a fair hearing and as importantly a staunch but courteous counter argument.
I just can’t find any reason to justify that tone, that approach, which seems to me and by the way those of our contributors I’ve been in contact with this weekend, to be entirely contrary to what we’re trying to do here.
And the crucial thing is, and this seems to be completely lost, is that here we have an opportunity to engage wtih the other side and to put our case forward clearly, concisely and authoritatively so that anyone who comes here to pick up on the discussion gets our side with no spinning, no hedging, etc, etc. And that it seems to be a serious argument between people who hold different viewpoints rather than one side having stats etc and the other shouting imprecations.
Look, one final thought for the moment. If people think I’m treating Patrick or others with kid gloves, or that somehow I’m letting down the class war then why not the same complaint in spades to Michael Taft who across the years has followed precisely the same line of courteous but firm engagement and rebuttal with those like Ronan Lyons himself if I recall correctly? Actually I do, here’s one example…
http://notesonthefront.typepad.com/politicaleconomy/2009/04/ronan-lyon-has-written-an-instructive-post-on-the-thorny-issue-of-teachers-pay-so-useful-in-fact-that-it-was-hig.html
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Hi all,
Am following this thanks to Patrick letting me know about it.
Thanks to those who argue for reasoned fact-based non-personal debate (and of course I’m well aware that we don’t always agree on what the relevant facts are but at least that’s a start).
To those who seem to have very strong personal opinions and prejudices about people they have never met (including me), I’m happy to engage in conversation and debate, I think it’s a lot more productive than name-calling. And my guess is that some of them could be surprised how much we agree on things, even though I’m sure we would fundamentally disagree on a number of other things.
To those same people, I would also caution against believing in the futility of convincing others on a point. What I believe, I believe because of the analysis I have done of the world around me – no-one’s paying me to have these opinions! I would point to Notes on the Front as an example of the impact reasoned online debate can have “across the divide”!
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I tend to agree with WBS. I didn’t initially respond to the Chamber of Commerce (COC) glossy brochure piece (thoroughly researched before hand and no doubt costing thousands to produce) presented by a respondant of COC in a seemingly ad hoc manner because all I originally saw was a big bull’s eye, and all I wanted to do was send a quiver of arrows through its heart. The second COC response appealing to family values was just complete horse shite; as is the data set link left for us to puruse.
We know that COCs remit is mainly to lobby for local small and medium businesses through cutting costs (usually tax and labour wages) and trying to expand revenue. Hence the reliance on creating confidence via the revenue appeal so that people will spend their money. [I wonder does COC ever think about confidence tricksters á la the mortgage/property debacle? Or do they want the same in the form of pvt consumer debt accumulation?] We also know that COC, for the most part, has aligned themselves with the large capitalist cast represented by the corporations; especially when seeking to cut taxes, wages and labour conditions.
Yet, COC’s interests are not totally aligned with corporations. In fact, they are often at logger heads as small and medium sized businesses increasingly fall prey to the economies of scale, costs of capital and national govt policies which have favoured corporations over local business for decades. (I’m sure COC is only too aware of the irony in its position of having to support globalisation and successive Irish governments who provide tax scam status for the very corporate powers that are destroying local business.)
So, if I’m correct in reading WBS’s thinking, we do not always face a monolithic bloc when confronting capitalists. I would go as far as to say that the members of COC, or those who they represent in the total business community, are quite diverse in their opinions and responses to the latest crisis of capitalism. Surely, a capitalist is a capitalist but not all of them can concretely respond to the crisis in the same manner, nor do all their final rational or non-rational responses fit into neat little packages.
There are thin wedges of opportunity to engage with some businesses or individuals. Obviously the opportunities are rare, but we must have some way of identifying them as they arise and using them to our advantage. Localist cooperations (cooperatives) where we produce real goods for sale in our economy is one such opportunity. As Lincoln once said, they could buy british steel rails for $20 or they could produce their own at $25. The difference was that the more locally produced expensive ones allowed for the use of local resources and the money created from sales, and the attendant wages, went back into the local economy, producing its own multiplier effect, rather than exporting such economy activity to the british empire.
More than likely the COC appeal to this post is nothing more than a cynical attempt to exploit any social democratic tendencies they see on the left, perceiving weakness in this corner; but they also display, through the very act of their appeal, that they must address the current trajectory whereby the public at large is coming to perceive the latest crisis capitalism as being something more than a mere blip on the way to ever more growth.
There is no denying that capitalists will either eventually seek to fold you into the collective or hang you out to dry when it is in their interests to do so. Every capitalist has only one goal, which supercedes all other human relationships and exchange, and that is to accumulate capital – usually in money form. Any social democractic party or individual is mere fodder for the likes of COC these days. I give you our own so-called Labour Party as a prime example. They became involved in a narrative created by Capitalists and were eventually subsummed by the capitalist narraties. They refused to envision any opportunity outside the global growth narrative and so have become a mere reflection of the narrative.
The question not being asked by socialists is why all the main stream parties are pursuing austerity when it is obvious that austerity is making conditions worse. The main politicians from the ruling coalition, and their economic advisors, are not stupid. They know their policies are currently destructive. The orthodox answer is that they are lowering the cost of doing business in Ireland and this will somehow make us competative with the likes of China, India, Brazil and so on. There’s obviously no way of supporting the concept that this supposed lower cost base will result in future growth as defined by capitalism, and I don’t think our leaders, govt or business, particularly care.
What I see, instead, is that the capitalist class and their govt enablers have recognised that 30+ years of ponzi fiat capital has run its course. They cannot afford to let the “lower/under class” (the class they are objectively creating through current policies) to borrow money at reasonable rates. It’s too risky given the fiasco of the property debacle. Capitalist don’t have all the answers to the problems they create. They also recognise that the demand for resources, especially oil but also many mentals, through competition with developing countries is not going to abate. There is only so far they can lower the cost base given resource competition. Herein either may lie our opportunities or our continued stagnation, imho.
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Fair play to Patrick King for engaging with the criticism.
First, the DCC will advocate the outsourcing of public service provision in boom or recession. Its members would benefit from such a move under any circumstances, however the state would only benefit from such a move under very limited circumstances.
Let’s assume for a minute, that private companies could provide these services cheaper than the state while making a profit. The move would lead to redundancies. So, in order to be worth while to the state, these private companies would need to provide the same services to the public, while providing a profit to the business owner and the saving would have to be greater than the cost of the redundancy payments made to those made jobless. Is that possible? It seems unlikely, but maybe.
Of course, we have to look at how a private company might provide a cheaper service. One way, would be to pay workers less for their work or to employ fewer workers than the state currently does. A smaller pay check means less disposable income for a worker. When workers spend less, the retail sector is impacted. Businesses close and/or wokers are made unemployed. There is less income from taxes for the state, and greater costs in terms of unemployment benefits. Of course, if workers who currently provide the services that are to be outsourced to private enterprise are not spending but saving, the impact of the retail sector might not be great, but, in spite of what the Sindo and Newstalk would have you believe, most public servants don’t end up saving milions every month. I suspect that many of the jobs to be outsourced would be low paid jobs, which would be replaced with even lower paid jobs. Low paid workers tend to spend all of their wages in the local economy, so an impact on the retail sector seems likely.
The other way that a private company might save money would be to provide a more spartan service. We need only look at the likes of Ryan Air and Aldi to see that consumers are willing to accept lower quality goods in exchange for lower prices, but there’s a good reason that the state is the provider of certain services. It’s not as though Ireland has ever been ideologically married to socialism. We know that certain services are either of strategic interest to the state or are simply too damn important for the state not to be involved in. If the state were to outsource certain jobs to private businesses, it would have to make sure that proper controls were in place to monitor the performance of these companies. This would probably involve a greater cost to the tax payer.
Another thing we need to consider, is the future. Given our current levels of unemployment, perhaps you could find workers, suppliers etc. whose costs were extremely low. However we are currently in the middle of one of the worst recessions ever encountered in the western world. While a private business might be able to provide a cheaper service today, the difference would narrow as the economy recovers. Any decision to outsource service provision would have to take a medium term view.
And of course, there’s always the possibility of industrial action and its associated costs . . .
As for taxation:
http://www.independent.ie%2Fnational-news%2Fnine-pupils-turned-away-from-school-due-to-lack-of-teachers-2864813.html&h=bAQBAvxjD
http://www.irishtimes.com%2Fnewspaper%2Fireland%2F2011%2F0902%2F1224303348299.html&h=LAQCJT-HF
http://www.irishtimes.com/newspaper/ireland/2011/0902/1224303347792.html
If we need to raise taxes to make sure that even more vulnerable people are not denied their human rights then I’m perfectly happy to pay. I will, however, demand that those who have more, pay more.
And consumer confidence? The fear of job loss, not tax increases, is what leads those who have spare cash to save. The outsourcing of public service jobs is hardly going to help that.
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Obviously we must oppose cuts. This should not mean we oppose reform in public services. Being an retired FAS minion, I would be wary of a carte blanche defence of everything FAS did especially the higher up the tree you go.A major clearout of the higher elechons and a reduction in pay and numbers of the higer masnage,ment grades would not be thatcherite.
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I think it is a tribute to Cedar Lounge Revolution that policy officials from DCC feel they should engage on a blatantly Left forum. When they do so it is important not to abuse them but engage them on why they think public services would be better delivered by the private sector. I am convinced as others have stated that their profit margin would only be secured by putting workers on a minimum wage with poorer holiday and pension benefits. It would be could to get their response.
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Thanks Chet and make do and mend, appreciated, but all I’m asking is people respect this site and it’s approach,what others do elsewhere is grand for them. But yes, it’s good we’re getting some notice from the orthodoxy and we’ll use that to our advantage to help further shape a left approach. I should add, it’s only because if he support and readership of you guys and the people who read us every week that that chance even occurs. Which just goes to prove alternative voices when formed by many can get a look in.
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[…] The 2011 Revised Estimates for Public Services break down that €53bn in current spending. Three quarters of the total, €39bn, goes directly as someone else’s income, either in the form of public sector pay (€15.8bn), public sector pensions (€3.2bn) or social welfare (€20bn). Of these three, public sector pay has already been significantly reduced, once to partially offset the money spent on pensions but also to reduce to actually reduce the Exchequer’s pay liabilities. The scope for further reductions is limited. Public sector pensions could be reduced but is unlikely to save large amounts. That leaves social welfare. How can you cut monies spent on social welfare and not appear callous? […aware as I am of the opinion certain fringe commentators have of me!] […]
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