Comments on: Tax increases or spending cuts: is Ireland’s government too big? http://www.ronanlyons.com/2009/10/21/tax-increases-or-spending-cuts-is-irelands-government-too-big/ Irish Economy | World Economy | Property Market | Economic Analysis | Ronan Lyons Fri, 27 Jan 2012 13:32:43 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Five things to remember when judging Budget 2010 | Ronan Lyons http://www.ronanlyons.com/2009/10/21/tax-increases-or-spending-cuts-is-irelands-government-too-big/comment-page-1/#comment-1250 Five things to remember when judging Budget 2010 | Ronan Lyons Wed, 09 Dec 2009 07:35:15 +0000 http://www.ronanlyons.com/?p=988#comment-1250 [...] to spend on this basis. This year, Ireland’s government will have the unenviable tag of being the largest in the EU, relative to the economy that it manages. The increase in expenditure by the government has [...] [...] to spend on this basis. This year, Ireland’s government will have the unenviable tag of being the largest in the EU, relative to the economy that it manages. The increase in expenditure by the government has [...]

]]> By: Best of luck to all manning the pickets today! - Page 13 - Politics.ie http://www.ronanlyons.com/2009/10/21/tax-increases-or-spending-cuts-is-irelands-government-too-big/comment-page-1/#comment-1226 Best of luck to all manning the pickets today! - Page 13 - Politics.ie Tue, 24 Nov 2009 14:38:41 +0000 http://www.ronanlyons.com/?p=988#comment-1226 [...] [...] [...] [...]

]]> By: Public sector pay and the idea of intensive (not extensive) cuts | Ronan Lyons http://www.ronanlyons.com/2009/10/21/tax-increases-or-spending-cuts-is-irelands-government-too-big/comment-page-1/#comment-1219 Public sector pay and the idea of intensive (not extensive) cuts | Ronan Lyons Tue, 24 Nov 2009 09:10:43 +0000 http://www.ronanlyons.com/?p=988#comment-1219 [...] education and health, it’s unlikely that people want less of them in recessions). Secondly, Ireland is already paying a huge chunk of its economy (almost 55%) on its public services, particularly compared to the level of services provided in other countries spending a similar [...] [...] education and health, it’s unlikely that people want less of them in recessions). Secondly, Ireland is already paying a huge chunk of its economy (almost 55%) on its public services, particularly compared to the level of services provided in other countries spending a similar [...]

]]> By: Ronan Lyons http://www.ronanlyons.com/2009/10/21/tax-increases-or-spending-cuts-is-irelands-government-too-big/comment-page-1/#comment-1183 Ronan Lyons Fri, 13 Nov 2009 09:37:58 +0000 http://www.ronanlyons.com/?p=988#comment-1183 Hi Mack, thanks for pointing that out to me. There's no mystery re where my figures came from. For cross-country comparability, you can't use national sources, IMO, you have to use something like the EU or the OECD, to make sure you're comparing apples with apples. My figures came from Eurostat: http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tec00023&plugin=1 And actually came from a version of the table when Ireland's Gov-GDP ratio was projected to be 1% lower than currently (presumably these tables get updated every month or two). Knowing the GNP-GDP gap in 2008, I then adjusted for GNP and, knowing projected growth rates of Government expenditure (+2.7%) and of GNP (-9%) this year, was able to calculate a figure for the Gov-GNP ratio in 2009. I can see why people might want to argue with the numbers, but until our Government (through the CSO) alerts Eurostat otherwise, this is the best cross-country comparison that I know of. Thanks again for giving the opportunity to clarify, R Hi Mack, thanks for pointing that out to me. There’s no mystery re where my figures came from. For cross-country comparability, you can’t use national sources, IMO, you have to use something like the EU or the OECD, to make sure you’re comparing apples with apples. My figures came from Eurostat:
http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tec00023&plugin=1
And actually came from a version of the table when Ireland’s Gov-GDP ratio was projected to be 1% lower than currently (presumably these tables get updated every month or two). Knowing the GNP-GDP gap in 2008, I then adjusted for GNP and, knowing projected growth rates of Government expenditure (+2.7%) and of GNP (-9%) this year, was able to calculate a figure for the Gov-GNP ratio in 2009.
I can see why people might want to argue with the numbers, but until our Government (through the CSO) alerts Eurostat otherwise, this is the best cross-country comparison that I know of.

Thanks again for giving the opportunity to clarify,

R

]]> By: Mack http://www.ronanlyons.com/2009/10/21/tax-increases-or-spending-cuts-is-irelands-government-too-big/comment-page-1/#comment-1180 Mack Thu, 12 Nov 2009 12:03:42 +0000 http://www.ronanlyons.com/?p=988#comment-1180 Hi Ronan, This post is causing some debate on progressive-economy.ie . Michael Burke has pointed out that year-to-date government spending (to October 2009) is €51bn. This report by Goodbody's, which concurs with your analysis, estimates government spending for the year will be €73bn. http://www.goodbodyonline.ie/include/pdf/ER20090717_Budget_Consolidation.pdf The figure seems to be derived from the McCarthy report - http://www.finance.gov.ie/documents/pressreleases/2009/bl100vol1fin.pdf Table 1.1 Projected Government Finances 2009 (as per Supplementary Budget April 2009) Have you any idea of why the discrepency exists between McCarthy's estimates and spending reported by the department of finance here? http://finance.gov.ie/documents/exchequerstatements/2009/Octoberexstatfinal.pdf It's difficult to see how both could be right at this stage? --- Being discussed here :- http://www.progressive-economy.ie/2009/11/home-truths-from-abroad.html Hi Ronan,

This post is causing some debate on progressive-economy.ie . Michael Burke has pointed out that year-to-date government spending (to October 2009) is €51bn.

This report by Goodbody’s, which concurs with your analysis, estimates government spending for the year will be €73bn.

http://www.goodbodyonline.ie/include/pdf/ER20090717_Budget_Consolidation.pdf

The figure seems to be derived from the McCarthy report -

http://www.finance.gov.ie/documents/pressreleases/2009/bl100vol1fin.pdf

Table 1.1 Projected Government Finances 2009 (as per Supplementary Budget April 2009)

Have you any idea of why the discrepency exists between McCarthy’s estimates and spending reported by the department of finance here?

http://finance.gov.ie/documents/exchequerstatements/2009/Octoberexstatfinal.pdf

It’s difficult to see how both could be right at this stage?

—

Being discussed here :-

http://www.progressive-economy.ie/2009/11/home-truths-from-abroad.html

]]> By: john http://www.ronanlyons.com/2009/10/21/tax-increases-or-spending-cuts-is-irelands-government-too-big/comment-page-1/#comment-1167 john Mon, 02 Nov 2009 23:20:13 +0000 http://www.ronanlyons.com/?p=988#comment-1167 Those are incredible statistics for what is supposed to be a politically rightish leaning state Those are incredible statistics for what is supposed to be a politically rightish leaning state

]]> By: Paul Hunter http://www.ronanlyons.com/2009/10/21/tax-increases-or-spending-cuts-is-irelands-government-too-big/comment-page-1/#comment-1148 Paul Hunter Fri, 23 Oct 2009 19:14:33 +0000 http://www.ronanlyons.com/?p=988#comment-1148 We really need strong leadership around about now - someone who can take on the public sector and finally turn it into a lean, cost-effective and efficient operation. There are too many of these outdated work practices, too little flexibility, too much administration. If an entrepreneur was hired to run the public service and run it like a business, I reckon we could halve the cost of it and probably increase it's productivity. But the big question is......is the monster too big to control? And more importantly, which one of our political leaders has the guts to do it? We really need strong leadership around about now – someone who can take on the public sector and finally turn it into a lean, cost-effective and efficient operation. There are too many of these outdated work practices, too little flexibility, too much administration. If an entrepreneur was hired to run the public service and run it like a business, I reckon we could halve the cost of it and probably increase it’s productivity. But the big question is……is the monster too big to control? And more importantly, which one of our political leaders has the guts to do it?

]]> By: Stimulus « Liberty in Ireland http://www.ronanlyons.com/2009/10/21/tax-increases-or-spending-cuts-is-irelands-government-too-big/comment-page-1/#comment-1146 Stimulus « Liberty in Ireland Fri, 23 Oct 2009 10:50:40 +0000 http://www.ronanlyons.com/?p=988#comment-1146 [...] That’s according to economist Ronan Lyons, read his post on this here. [...] [...] That’s according to economist Ronan Lyons, read his post on this here. [...]

]]> By: CorkBoy http://www.ronanlyons.com/2009/10/21/tax-increases-or-spending-cuts-is-irelands-government-too-big/comment-page-1/#comment-1142 CorkBoy Thu, 22 Oct 2009 13:21:33 +0000 http://www.ronanlyons.com/?p=988#comment-1142 Ireland rapidly increased it's public sector annual cost during the boom years, through benchmarking, additional hires, increments and expanding service budgets. This was always going to end in tears - and so here we are. I believe that we would still have had this serious difficulty ticking away in the background even if the boom, albeit at a slower rate, had continued or fizzled out softly. We just would have encountered this squeeze a few more years down the line. The spectacular boom collapse has just made the squeeze all the more crippling for the state - and a lot more immediate. In recent years funding the public service on the back of the boom has been a lot like buying a large house with a large mortgage on the back of a series of big wins on the horses. The elation clouds your judgement. The wins might pay the mortgage for the first few years, but you won't win all the time. Or as frequently as you did during your purple patch. And the mortgage is going to need it's payment every month, every year for the next 30 years... regardless. The public sector unions want Ireland to keep paying the current mortgage... The construction industry wants us to go back to betting on the horses... We need to move to a smaller house? Ireland rapidly increased it’s public sector annual cost during the boom years, through benchmarking, additional hires, increments and expanding service budgets.
This was always going to end in tears – and so here we are.

I believe that we would still have had this serious difficulty ticking away in the background even if the boom, albeit at a slower rate, had continued or fizzled out softly. We just would have encountered this squeeze a few more years down the line.
The spectacular boom collapse has just made the squeeze all the more crippling for the state – and a lot more immediate.

In recent years funding the public service on the back of the boom has been a lot like buying a large house with a large mortgage on the back of a series of big wins on the horses. The elation clouds your judgement.
The wins might pay the mortgage for the first
few years, but you won’t win all the time. Or as frequently as you did during your purple patch. And the mortgage is going to need it’s payment every month, every year for the next 30 years… regardless.

The public sector unions want Ireland to keep paying the current mortgage… The construction industry wants us to go back to betting on the horses…

We need to move to a smaller house?

]]> By: Ronan Lyons http://www.ronanlyons.com/2009/10/21/tax-increases-or-spending-cuts-is-irelands-government-too-big/comment-page-1/#comment-1139 Ronan Lyons Wed, 21 Oct 2009 08:10:10 +0000 http://www.ronanlyons.com/?p=988#comment-1139 Thanks FS, I've fixed Tom's credentials. Thanks FS, I’ve fixed Tom’s credentials.

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