Ireland’s general election is ten days away. This post outlines the two most important economic policy questions that people should ask their candidates. One is about banking debt and outlines a solution that saves EU face as well as Irish money. The second is about the deficit, which still dwarves the banking crisis and means tax rises and spending cuts are a necessary evil.
With Ireland’s next Budget now just seven weeks away, a plethora of proposals for what to do (and not to do) are being announced weekly. This post discusses just two measures – on income tax and on property tax – that could meet the Government’s targets of €2bn in new revenue next year and €6bn in new revenue by 2015.
Last month, the OECD published its latest Economic Outlook, which downgraded expectations for rich-country growth this year. This post digs a little deeper into the OECD database and compares how the private and public sectors have changed over the past three years. It finds that the private sector is paying more to get less in most countries – except the US, Japan and Ireland. It also finds an effective stimulus in the OECD of about 6% of GDP in 2010, compared to 2007. This is largest and – as spending-led – perhaps least sustainable in Ireland and in Denmark.
This post examines whether the Government’s pledge to reduce the deficit to 4% of GDP by 2014 is consistent with its promise not to cut its workers’ rates of pay. The chief concern is that, with tax receipts unlikely to grow by more than 10% over the coming five years, an adjustment in expenditure of €10bn – needed to meet EU (and thus market) expectations – will have to come from non-pay expenditure. No matter which way the numbers are cut, with public sector pay off limits, this is a tall order.
This post outlines a scenario for Ireland’s government finances out to 2015. Even with aggressive productivity targets for areas of current expenditure, the deficit is likely to be above 4% of GDP by 2015, while the national debt will again be larger than national income and take up one-fifth of all tax revenues. Grounds for optimism – and pessimism – and alternative scenarios are also explored.
