The Irish Economy: What Needs to Be Done?

with inflation averaging 5% for the last 14 months, unemployment going to brake the 6% mark, a huge budget deficit, a very high minmum wage, how would you keep the Irish economy internationally competitive over the next few years and further into the future?

I would do the following

1. Reduce corporations tax to 9% from 12.5%, this would increase the level of FDI in Ireland and would reduce the cost base somewhat, we must also be aware that the UK are going to reduce their corporations tax, so to keep conpetitive we must do this.

2. Reduce spending on roads and redirect those funds to spend on public transport projects, and increase and improve the connections between suburbs and cities and all major cities.

3. Put major investment into the roll out of broadband and increase Internet speeds, this would make the economy a high tech society and extremely attractive to multinationals, it would make us more preferable to FDI rather than places like India who wouldn't have a good technology infrastructure.

4. Increase investment in other energy sources, like wind, solar, and hydro, this needs to be done as oil and petrol are only going to
get more expensive, which is increasing our cost base hugely.


These 4 measures would improve our competitivness in the short medium and long term, we would be much more attractive for FDI, a successful economy is one that can adjust and currently we can't, but with these 4 measures we will be able to in years to come.

I should also say I would expect the government to do away with their pay increases, as it will end up costing the economy hugely with pay talks this year.

SBP: Clampdown on Current Spending

On roads: the completion of some roads should help competiveness. Which road programs would you advise putting a brake on, besides the M3?

Good thread pfkf1, worth keeping going with it. I hope it gets a long life.

I agree with you about broadband: it is far more important for jobs than the roads programme.

India has only 7% of its population using the Internet, but that is nearly 98 million people to our 33% which is 1.5 million users. As far as I can gather, Indian speeds would be much higher.

Our internet capacities are currently a disaster and none of the political parties seem to have a grasp of it.

Investment in local renewable energies, provided that the technologies are proven, has also got to be up there in the top 3.

Agriculture, forestry and water have got to come into it, as food and water will be at a premium in the medium and long term. We should also look after our inshore fisheries and rivers.

Corporation tax would be a quick fix, if allowed by the EU, but if we depend on it for jobs we would remain very vulnerable to relocation of footloose industry. Plus it means that our workforce is producing profits for repatriation elsewhere rather than for home use.

Definitely good thread pfkf1.

We should try to keep potential rising costs down as the govt is probably trying to do as my alter-ego has posted above with re. to the SBP article. Richard Bruton was saying recently (morning ireland?) that no, the ministers should not accept pay rises now as that would look fairly disgusting going into pay talks soon with public workers and then asking them to put up.

Inflation is the little nasty bit we should be trying to avoid - other problems like pay rises and infrastructural investment (always badly needed) might seem less problematic if inflation was handled well. How can we ask public paid workers to not take rises when the cost of living is rising quicker than they get paid?

Why are we even going on about public pay at all if we want to talk about internation competitiveness? Because it's all a big machine. Those cogs at the top of this page are there for a reason - in the real world there's not two but thousands of cogs all interlinked, all affecting the other, all interdependent - when one is driven faster it speeds up the rest, when one is slowed, the rest slow with it.

Maybe that's an unsuitable analogy but up to now we have been in a period of heightened growth and economic activity; I don't think we managed it as well as we could have but that's for another day. Now we are in a period of slowing growth and it is our duty to manage it appropriately and I hope we do. We probably will well enough but there is always the opportunity for gaining an advantage in a difficult time. We could do it and we should.

AuditorGeneral wrote:

SBP: Clampdown on Current Spending

On roads: the completion of some roads should help competiveness. Which road programs would you advise putting a brake on, besides the M3?

I would say that in the very near future the price of petrol will mean that the use of cars will become less and less, so we shouldn't be putting down more Tarmac for extra cars, we should reduce spending on major road projects and redirect the money towards a world class public transport system. We should do the opposite of what this government is doing now which is delaying all public transport projects until the finances get better.

The future is public transport, not cars, we need to invest heavily in it.

pfkf1 wrote:

AuditorGeneral wrote:

SBP: Clampdown on Current Spending

On roads: the completion of some roads should help competiveness. Which road programs would you advise putting a brake on, besides the M3?

I would say that in the very near future the price of petrol will mean that the use of cars will become less and less, so we shouldn't be putting down more Tarmac for extra cars, we should reduce spending on major road projects and redirect the money towards a world class public transport system. We should do the opposite of what this government is doing now which is delaying all public transport projects until the finances get better.

The future is public transport, not cars, we need to invest heavily in it.

People want independent transport. The future is in electic cars.

Actually, the future is in individual electric cars which are controlled centrally. You tell the system where you want to go and a central computer drives your vehicle. The computer will control all cars on the road so it will be able to organise the traffic to avoid congestion.

Little plug in cars are available but they will only do about 30 m.p.h.
I wonder about reviving the Sinclair with a wind-charged battery.

Bicycles of course are best for short trips when it is dry.

And what about all our canals, can't we put something on them?

DeGaulle wrote:

People want independent transport. The future is in electic cars.

Actually, the future is in individual electric cars which are controlled centrally. You tell the system where you want to go and a central computer drives your vehicle. The computer will control all cars on the road so it will be able to organise the traffic to avoid congestion.

Do you think this could apply outside the cities? Eventually maybe but at the moment in London you can plug your electric car into the grid on the street to be recharged FOR FREE. I'll google it later (and get another post up) . Centralising control of them ... when? GPS monitoring maybe but can you really see pre-programmable cars anytime soon? People like to drive, they like to be in control...

I think there is perhaps a strong future in public transport too - our railways could be rebuilt gradually and they would then at that point be convertible more easily to electricity at the most extreme a conversion. Engines running on species of combustible fuel other than cheap-getting-pricier oil could very easily be installed and god knows what that combustible fuel should be but maybe we should be looking at hydrogen research.

We should be energy independent. We have plenty of natural resources to achieve this. One of the parties should put this in their manifesto as a project for this country - make ourselves self-sufficient in energy. Think of the savings on the balance of payments ...

pfkf1 wrote:

AuditorGeneral wrote:

SBP: Clampdown on Current Spending

On roads: the completion of some roads should help competiveness. Which road programs would you advise putting a brake on, besides the M3?

I would say that in the very near future the price of petrol will mean that the use of cars will become less and less, so we shouldn't be putting down more Tarmac for extra cars, we should reduce spending on major road projects and redirect the money towards a world class public transport system. We should do the opposite of what this government is doing now which is delaying all public transport projects until the finances get better.

The future is public transport, not cars, we need to invest heavily in it.

Yes it's quite possible that the use of private cars for private pleasure will decline dramatically if the price of oil continues to skyrocket.

Maybe the silver lining here will to force governments, esp our own to invest much more in good public transportation systems.

Talk about a scare at bedtime:

http://www.competitiveness.ie/ncc/reports/ncc_annual_07/ch01/ch01_00.html

Apart from Luxembourg, Ireland is now the most indebted Eurozone member, both relative to national income and on a per capita basis. The average Irish person ( man woman and child) was almost €35,000 in debt by 2007.

Since 2002 our rate of exports, manufacture and agriculture ( on which national wealth is based) has declined, and the 'expansion' has been personal debt, public sector spending and construction. The Celtic Tiger lasted for about four years, followed by another four of Celtic profligacy and transfer of national assets into a small number of private hands.

Undoing it is not going to be so easy even if the world economy wasn't in the síucra. I am sure Bertie and his lads expect us all to take the rap for him whilst he retires on a fat pension.

Cactus that's a juicy site dealing with the subject. There's a horrific graph of our personal debt since 2003 when it was less than half it is now (35K each). In a peculiar way this could lead to higher competitiveness because people are shackled to their debts and should be inclined to take less wages as long as there's wages there (assuming there was a real threat that any wage would dissipate but there is actually no sign of this at present probably. Where's Ard Taoiseach with some stats on job creation?)

Auditor #9 wrote:

DeGaulle wrote:

People want independent transport. The future is in electic cars.

Actually, the future is in individual electric cars which are controlled centrally. You tell the system where you want to go and a central computer drives your vehicle. The computer will control all cars on the road so it will be able to organise the traffic to avoid congestion.

Do you think this could apply outside the cities? Eventually maybe but at the moment in London you can plug your electric car into the grid on the street to be recharged FOR FREE. I'll google it later (and get another post up) . Centralising control of them ... when? GPS monitoring maybe but can you really see pre-programmable cars anytime soon? People like to drive, they like to be in control...

It would only apply in cities initially because central control could be used to combat congestion.

The more I think about it, the more advantages it has. You could send the car to pick up your children from school etc. Also, you could drink and the car could drive.

I don't think that being in control of the vehicle is the issue, it's having independent transportation.

How would this make us more competitive? Unless you are talking about foreseeing transport infrastructure pre-emptively?

this is the green london car


http://www.goingreen.co.uk/store

Maybe if Dublin modelled itself on the London system .... ?

the last discussion I had with Ard regarding the economy, he actually appeared to be quite depressed, saying that cowen is quickly going down as the worst minister for finance in the history of the state.

You must remember we in Ireland need to be creating between 70,000 and 80,000 jobs a year just to keep our heads above water, we haven't been reaching those targets for the last 3 or4 months and we won't be reaching those numbers for the next 12 months at least and unemployment will probably reach over 6% this year.

The best growth rate the ERSI are currently predicting is 1.6% by the year end the economy may actually shrink.

We need to show the world that we are setting up economy for the future, so as they will see us as a good solid base to invest in for a medium to long term. A short term measure is obviously to reduce corporations tax. We need to invest in public transport, technology, renewable energy as a matter of urgency.

Auditor #9 wrote:

How would this make us more competitive? Unless you are talking about foreseeing transport infrastructure pre-emptively?

Perhaps we've gone slightly off-topic.

1: Authorise waterboarding for non-cooperative Tribunal witnesses.
2: Execute those responsible for the descration of Tara.
3: Lower corporate tax rates.
4: More taxbreaks for business investments.
5: Points based immigration system.
6: Expedited removal of fraudulent/bogus asylum seekers.
7: Revocation of fisheries agreements with EU.
8: Revocation of Oil/Gas agreements selling out Ireland's resources.
9: Execution of corrupt traitors who sold out Irish resources.
10: Seizure of all assets of corrupt politicians and those of their families until these assets can be accounted for CAB style.
11: More emphasis on science and business in school curricula.
12: Term limits on Dail TDs.
13: Reform of the Seanad.
14: A political CAB.

Well with the self-perpetuating corrupt scum in power one can only hope.

Regards...jmcc

DeGaulle wrote:

Perhaps we've gone slightly off-topic.

Transport and infrastructure are definitely a part of the discussion - we've just gone into too much detail (have a look at the London car above anyway )

pfkf1 wrote:

the last discussion I had with Ard regarding the economy, he actually appeared to be quite depressed, saying that cowen is quickly going down as the worst minister for finance in the history of the state.

You must remember we in Ireland need to be creating between 70,000 and 80,000 jobs a year just to keep our heads above water, we haven't been reaching those targets for the last 3 or4 months and we won't be reaching those numbers for the next 12 months at least and unemployment will probably reach over 6% this year.

That was one of the last things I was reading on p.ie before the END. Yes ArdTaoiseach was negative about Cowen but I don't think he was pro-government but I could be wrong. He produced some very complimentary economic statistics on the Rainbow government which is why a lot of us wanted that combination again last time.

I have to ask you what you are basing the job creation figures on? It might sound like a lot but it probably isn't considering we have a lot of building and retrofitting (and more) to do yet. Is it a think-tank figure?

pfkf1 wrote:

The best growth rate the ERSI are currently predicting is 1.6% by the year end the economy may actually shrink.

We need to show the world that we are setting up economy for the future, so as they will see us as a good solid base to invest in for a medium to long term. A short term measure is obviously to reduce corporations tax. We need to invest in public transport, technology, renewable energy as a matter of urgency.

Lower growth is better in the opinion of many of us, perhaps for the long-run however, but not exactly right now. But then again a little period of rest and respite should allow us to consider consolidating certain infrastructural items or re-designing them or simply give us time to plan and even produce them. Unfortunately people are too up to their necks in debt to welcome a holiday and a rest period to get the likes of the M50 done while things were quiet because it won't be quiet forever.


An economy for the future - yes. We should also look at our housing stock and see if we can do anything to make it attractive for people to rent or buy in terms of price and energy (I know the GP are doing this but the other Parties need to be more vocal on it as you are thankfully). One of the resources we are going to have problems with soon is Expertise and this doesn't grow on trees and they have to live somewhere.

the figure I get is from demographics, employment is taken from age 16-65, there are about 60,000 people born every year and about 20,000 die, so each year we need to create at least 40,000 just keep the Irish employment levels the same and immigration over the last while has run at huge levels which has meant over the last number of years our working population has increased by about 70,000 to 80,000 with immigration levels decreasing the emploment population may decrease a little.

So maybe in an economic downturn those figures may decrease, so this year we probably need an extra 65,000 jobs just to keep employment levels the same. The ERSI has said that we will not create any new jobs this year, this means that we will have a big jump in unemployment.

Things could very bad if the Dollar gets weaker, it looks as if it might €1:$2 by the end of the year and sterling is no better at the rate it is going it could go €1:£1 which would be a disater for exports in the country.

So our population is growing at 40,000 per year but do we actually need 40,000 jobs created to support that? I know in terms of percentages it's actually true but in real economic terms to we need to create that many jobs ? Shouldn't we be looking more at maintaining economic activity i.e. non-inflationary jobs but jobs which would provide growth? I'm thinking of jobs in teaching where you can get people for example who know shag all about computers to learn about them then they spend €1000 on a home system (20% of that back in tax plus the Dell employee salary multiplier effect and so on) and then after that they learn how to use the internet and now they are renting Broadband too... those kinds of 'Increasing Returns' jobs - shouldn't we be looking at creating them at home?

1.Remove Ahern and replace with McCreevy as Taoiseach.
2.Remove Cowen and replace with Ruairí Quinn.
3. Same as above but with Michéal Martin swapped with Richard Bruton.
4.Slash current spending while maintaining 6-6.5% GDP spend on NDP.
5.Increase spending on SFI, EI and IDA.
6.Cut Ministerial wages by 25% and offer PAYE tax cuts in return for pay freezes in social partnership talks.
7.Cut VAT and Stamp Duty rates in Budget 2009.
8.Keep developing renewable enrgy sources in order to curb fuel imports and go towards situation of exporting energy.
9.Sell small stakes in ESB and CIÉ and public buildings in order to part-finance fiscal policy.
10.Increase spending on universities, second-level and primary-level schools.
11.Merge 3rd-level faculties in science and technology in places like UCD with Trinity and DCU in order to build economies of scale.
12.Try to get milk quotas lifted so we can export more dairy onto global markets.
13.Change Section 481 so we get more films into Ireland and more spin-off tourism.
14.Increase BES limit from 1 to €2million.
15.Make paying taxes easier.
16.Fund local authorities better and stop excessive local rate-charging.
17.Increase competition in areas like dentistry, the legal profession and other areas so as to improve productivity and reduce costs.
18.Use places like the Naughton and Tyndall Institute in order to build clusters of high-tech companies.

Hmmm - lets have a look here................

Quote :

1: Authorise waterboarding for non-cooperative Tribunal witnesses.

My sympathys are with your sentiments - but dont worry - the tribunals will finally get the boyos , just as they got Lawlor ,Keating,Haughey(Big mouth Harney excepted) and Burke - slowly methodically but surely in the end- hang the expenses - everybody goes on about the millions spent - nobody seems to notice the billions that CAB and the Revenue have raked in as a result of the Tribunals - its well in profit.

Quote :

2: Execute those responsible for the descration of Tara.

Or just don't vote for them - its a democracy we live in - and we live in a visually/asthetically impaired society - Yes I am a snob!

Quote :

3: Lower corporate tax rates.

Dont see the point - we're just about the lowest anywhere - anymore and the PAYE taxpayer will be paying the production costs of Ireland Inc.

Quote :

4: More taxbreaks for business investments.

Not more taxbreaks - more targeted and specific taxbreaks to build a specific industry or sector - we are not going to be that cash-rich in the near-future that we can give tax-breaks to all and sundry - somebody got to pay the bills here.

Quote :

5: Points based immigration system.

the vast majority of our immigration is from within the EU - so thats a complete non-runner - that said for those coming in from outside -possibly - then again from my experience trying to get work-visas for specifically talented people that I cant get in the EU is damn difficult as it is.

Quote :

6: Expedited removal of fraudulent/bogus asylum seekers.

I was under the impression that this was already underway - Then again I think that this issue is way-over cooked - let them work legally if you ask me - there is no excuse for Irish people to be unemployed over the last ten years - if they dont want the jobs - let the asylum seekers bogus or not have a go at them - better them working and paying tax than nought while their application is being processed

Quote :

7: Revocation of fisheries agreements with EU.

thats an interesting one - we gave that up in a quid pro-quo for strutural funds and agricultural subsidies - we sold out the fishermen for the farmers. Given the perilous and depleted state of the fishing industry in general - I dont what would achieved if even if we did tell the Spanish and French to go to hell. At the same time I would like to see a little more backbone and imagination by our ministers when they do go to negotiate - not at all convinced by the Coughlan one. What could be done would have to be radical:

A) Tell our fishing industry that it is time to pull their socks up and get real about the state of their means of making a living - time to start filling in the proper stats so we have some idea what we actually have or havent and look at their fishing methods from the side of sustainability as opposed to maximium profit - I dont believe the message has got thru yet

B) Get together with Britain and possibly France and declare a complete moratorium on fishing in the Irish Box for at least 5 years - its is now that bad - for scientific reasons - whatever - the Spanish will go apeshit - and get the whole thing bogged down in the European courts for a good half decade - Fish dont respect nationalities or borders so the co-operation of the British ,French and possibly Denmark, Norway Iceland and the US and Canada will be vital - the law of the ocean is over - fishing will have to become ranching and the environment and fragile ecological balance will be vital if fish stocks are to recover at all - pay the fishermen off to go on the doss for 5 years and then bring them in as vital stakeholders in the whole enterprise - the Yanks and Canadians can do this on the Pacific fisheries - why cant we do the same.

Quote :

8: Revocation of Oil/Gas agreements selling out Ireland's resources.

Dont really know about that - one persons sellout is anothers good deal - one has the oil and the other has technology and capital to take the risk -FF can be a bunch of eejits on many things - but on this I will give them the benefit of the doubt - if the agreements were really bad - they would never get past the Dail

Quote :

9: Execution of corrupt traitors who sold out Irish resources.

You really have the ole Maoist/Stalinist thing going on don't ya

Quote :

10: Seizure of all assets of corrupt politicians and those of their families until these assets can be accounted for CAB style.

The law is still is the presumption of innocence until proven guilty for everybody - as frustrating as that may be for some of us.

Quote :

11: More emphasis on science and business in school curricula.

Fair enough - and TBH - great strides have been made in the last 15 years in regard to this - Its not the Politicians fault that science subjects are generally a lot more difficult than others and also that there are still feck all jobs in Ireland to match the qualifications of those who bother - most "science" jobs in this country are "technicians jobs" - ie anybody with a brain who can be trained - Nearly all R&D by the big multi-nationals is done elsewhere - we're a half decent production unit. Its a chicken and the egg paradox - but I think we are slowly getting there - much better would be far more money spend on incubator units for R&D and science startups than the piece-meal efforts in place currently - then again there's feck all you can do with a student population that sees a much easier and more lucrative life in selling Housing and drugs!

Quote :

12: Term limits on Dail TDs.

There are already dail limits on TDS - 3-4-5 years - what would be the point - throwing the baby out with the bathwater - I admit we're badly badly in need of extensive constitutional reform - but this is'nt the way to start.

Quote :

13: Reform of the Seanad

Ditto above
.

Quote :

14: A political CAB.

No way Jose - the judiciary ,legalistive and executive functions of the state are kept apart for a reason - you are entering dangerous water proposing that - even if I have some sympathy for where you would come up with that.

Nice thread

More public transport (preferably electric)...and the plug in cars are a nice thought too.. according to Finfacts zis morning, the lovely people in OPEC are predicting $200 per barrel oil; they must be about to tighten the taps. http://www.finfacts.ie/

Investing in agriculture (yes, it is finally time to bin the milk quotas). And since the price of oil based fertiliser is going only one way, how about an education in organic methods for the farming community. Not out of principle you understand, just to reduce the amount of fossil fuel required for food. Since we don't, in Ireland, usually run to 10,000 acre farms, would it be worth thinking about using draught horses rather than tractors on some smallholdings?? And how about a wind turbine on every farm?? Solar panels on the milking sheds in the Sunny South East???

Renewable electricity, fast...(and maybe, reluctantly, we should be discussing nuclear; I'm against it, but the oil price is worrying me and the windfarms will need backup. )

The only thing that will save all the economies, not just ours, is stabilising the price of energy. The Zolow differential has been shown to be down to cheap energy and explains 50% of economic growth. We are lucky... not short of wind, tide and running water, so lets get on with it.

Just out of interest, that Eurozone debt graph didn't look pretty, but has anyone got anything similar that compares our debt levels with the UK, US, Canada, Australia, NZ and the other English speaking countries?? Perhaps it's cultural!!!

expat girl wrote:

Nice thread

More public transport (preferably electric)...and the plug in cars are a nice thought too.. according to Finfacts zis morning, the lovely people in OPEC are predicting $200 per barrel oil; they must be about to tighten the taps. http://www.finfacts.ie/

Investing in agriculture (yes, it is finally time to bin the milk quotas). And since the price of oil based fertiliser is going only one way, how about an education in organic methods for the farming community. Not out of principle you understand, just to reduce the amount of fossil fuel required for food. Since we don't, in Ireland, usually run to 10,000 acre farms, would it be worth thinking about using draught horses rather than tractors on some smallholdings?? And how about a wind turbine on every farm?? Solar panels on the milking sheds in the Sunny South East???

Renewable electricity, fast...(and maybe, reluctantly, we should be discussing nuclear; I'm against it, but the oil price is worrying me and the windfarms will need backup. )

The only thing that will save all the economies, not just ours, is stabilising the price of energy. The Zolow differential has been shown to be down to cheap energy and explains 50% of economic growth. We are lucky... not short of wind, tide and running water, so lets get on with it.

Just out of interest, that Eurozone debt graph didn't look pretty, but has anyone got anything similar that compares our debt levels with the UK, US, Canada, Australia, NZ and the other English speaking countries?? Perhaps it's cultural!!!

You've said a lot of it for me, expatgirl , but will chew on this thread and get back to it later.

I think a small few of us on p.ie have been banging on about the energy basis of our economies and how that really should be addressed as you say in terms of price stability... I can see a massive scramble for alternative this that and the other which could get messy and end up with botched and unsustainable this that and the other (yeah nuclear but I agree we need a debate) and then we'll only be left with more problems down the line.

A debate on whether or not and how we could be 100% self sufficient in energy in the medium term is something we should go for here on Machine Nation now there is some more mental muscle around the place.