The Irish Economy: What Needs to Be Done?

I think we should invest heavily in the competition authority and break up all and any price collusion and fixing.

I would investigate the following straight away:
-Supermarket Chains
-Meat Packers
-Enterprises buying from Farmers
-Manufacturers/suppliers of non-food consumables (why is it so expensive to wash yourself?)
-Insurers

I would introduce laws allowing employers to require flexibility from employees as long as work/pay rate was unaffected. I would link maximum liability to employees to profits- we're all in this together!

I would issue packages of standard employment contracts and forms and procedures for all types of businesses and SMEs.

I would revamp the maths and science curriculums in secondary schools and universities to use computers to show real world applications.

I would introduce a secondary school subject of personal financial management to help irish people put their money to work and to avoid waste.

For controversy sake, I would make voluntary maternity benefits contingent on the person returning to work or providing added assistance to the employer from home.

I would develop an expert government group to oversee and quality check all government contracts, be they for construction or IT projects. I would introduce a roving project manager roles within different areas of the civil service.

Zhou_Enlai wrote:

For controversy sake, I would make voluntary maternity benefits contingent on the person returning to work or providing added assistance to the employer from home.
.

I would make all maternity benefits payable by government out of taxes not by the employer. Having children is something that sustains the whole of society, not just firms that employ women.

Other ideas:

- A fixability and life expectancy rating for all appliances, machinery and vehicles.

- Make it more difficult for people to gain qualifications through connections, e.g. entry into College of Surgeons, Law Library, Auctioneering.

- Minimizing financial barriers to entry into professions (by limiting low entry pay pain and providing student loan arrangements).

- Limit how many people can be in each profession to assure balance between value for money and quality. There are too many bright people doing law and pharmacy and so forth who could be generating more wealth by being involved in enterprise.

- Identify potential career conversions between specific careers and facilitate it.

- Introduce a compulsory element of profit sharing in all enterprises. This is a bit out there but it could have merit.

cactus flower wrote:

Zhou_Enlai wrote:

For controversy sake, I would make voluntary maternity benefits contingent on the person returning to work or providing added assistance to the employer from home.
.

I would make all maternity benefits payable by government out of taxes not by the employer. Having children is something that sustains the whole of society, not just firms that employ women.

I agree. This would make small enterprises which cannot cover the work with existing staff as attractive to staff as larger companies. I think we already do this though up to a point through maternity benefit.

However, I am not willing to fund a high flying accountant's wage because she and her husband want to have a child. They will get a lot more benefit out of that than me. Neither am I prepared to work like a dog till 10pm every night to cover for her because my boss has to pay her full wage and can't afford to take somebody else on. A bit of a conundrum!

It would be best if women were paid close to their full wage to encourage them to have children if they want and to work. However, businesses have to be protected too. The solution where the employer takes some hit but only if the person comes back to work is a good system. It is there in practice at the moment but I thin kit should apply in the public sector too. I don't think there is an overwhelming need for more civil servants' children in the country.

Personally I think we should all be rationed to a maximum of 2 per family. The planet just can't take any more.

cactus flower wrote:

Personally I think we should all be rationed to a maximum of 2 per family. The planet just can't take any more.

Maybe, but replacement rate is 2.1, and infertility rates are rising. We need to even out fertility rates across the globe perhaps, but I wouldn't suggest a reduction here; we're below replacement rates as it is.

1. Develop energy self sufficiency based on local resource (wind and solar) Grow our own food and timber.
2. Education - pre-school - school - university and research - Multilingualism - science
3. Vocational and practical skills valued as highly as academic
4. Science education and research - A body like the IDA to take scientific discoveries/inventions through to production stage
5. No more vanity projects: value for money in Government services - no more political appointments to boards.
6. Raise the minimum wage and raise tax for the rich.
A proper safety net for people who can't work

1.Spending restraint.
2.Pay restraint(the govt can lead here by accepting pay cuts of 25%, it would put the pressure on the unions to accept)
3.Keep reducing taxes whenever possible and keep rewarding hard work, risk-taking, enterprise and can-do attitude.
4.Build real links with Singapore, China, India, Vietnam, Japan and South Korea. Ireland depends too much on UK/USA. We need to diversify!
5.Encourage more competition in under-competitive sectors of the economy.
6.Keep non-wage costs low for employers.
7.Keep up significant investment in infrastructure through the NDP.
8.Make it our business to lead the OECD PISA table.

I am watching "where has my job gone" on RTE One. Two Irish people whose jobs have gone from Ireland are following them to Poland and the Czech Republich and will meet the people doing "their jobs". Proctor and Gamble moved from Nenagh to Wodz in Poland.

Family incomes are 750 a month average in the Czech Republic. Overheads are low and people are well educated in technical fields.

"Eastern Europe is the Ireland of the 21st Century" - the Irish people are amazed at how developed Eastern Europe is and how the people doing "their" jobs are so like themselves 15 years ago.

A lot of the discussion here seems to be focused on reducing absolute costs, which is overly simplistic.

Competitiveness is a function of productivity as much as cost, in that relatively high costs can be absorbed as long they are incurred in a highly-productive capacity.

I think this is important to note in this discussion. The Irish economy cannot revert to a low absolute cost base; it is neither possible nor advisible.

Instead, the State needs to reduce both the regulatory and fiscal burden on economy's productive capacity, and stimulate whatever latent productive capacity exists.

Reducing the fiscal burden will however require trimming public sector expenditure in the short term, which will require much greater dependency on the private sector to provide services. I think there is a realisation of this at Government level (eg increased use of PPPs for schools, co-located hospitals which reserve capacity for the HSE) but idealogical dogma will always be an issue.

If we want to enjoy longterm economic prospertiy, we really do have to be realistic about our public sector. Bleatings about the evils of privatisation etc are of little to comfort to people watching their jobs float away to Eastern Europe.

cactus flower wrote:

Personally I think we should all be rationed to a maximum of 2 per family. The planet just can't take any more.

Rationed?

905 wrote:

cactus flower wrote:

Personally I think we should all be rationed to a maximum of 2 per family. The planet just can't take any more.

Rationed?

Rationed.

Creepy. Do we eat the spare children?

seinfeld wrote:

....the State needs to reduce both the regulatory and fiscal burden on economy's productive capacity, and stimulate whatever latent productive capacity exists.

What regulations can be reduced and who should do it? Everything is about anti-avoidance. The new VAT on property regime has wholly failed to simplify the system because the Dept of Finance insisted on changing it to include increased anti-avoidance measures to protect the exchequer.

seinfeld wrote:

Reducing the fiscal burden will however require trimming public sector expenditure in the short term, which will require much greater dependency on the private sector to provide services. I think there is a realisation of this at Government level (eg increased use of PPPs for schools, co-located hospitals which reserve capacity for the HSE) but idealogical dogma will always be an issue.

Where do you see a cost saving in getting private operators to provide services already performed by the public service?

905 wrote:

Creepy. Do we eat the spare children?

You are well in advance in your reading of Collapse so you have encountered a lot of cannabalism. However I think it mainly pre-dated birth control.

Zhou_Enlai wrote:

seinfeld wrote:

....the State needs to reduce both the regulatory and fiscal burden on economy's productive capacity, and stimulate whatever latent productive capacity exists.

What regulations can be reduced and who should do it? Everything is about anti-avoidance. The new VAT on property regime has wholly failed to simplify the system because the Dept of Finance insisted on changing it to include increased anti-avoidance measures to protect the exchequer.

From my own experience of working for myself, the prospect of employing someone else to help me is really not appealing. That isn't because of cost, its because of the various hoops I will have to jump through to bring that process to a conclusion, which is addition to the numerous hoops I already I have to jump through (eg filing VAT returns every 2 months). It should be possible to employ someone without having to employ an accountant first.

Zhou_Enlai wrote:

seinfeld wrote:

Reducing the fiscal burden will however require trimming public sector expenditure in the short term, which will require much greater dependency on the private sector to provide services. I think there is a realisation of this at Government level (eg increased use of PPPs for schools, co-located hospitals which reserve capacity for the HSE) but idealogical dogma will always be an issue.

Where do you see a cost saving in getting private operators to provide services already performed by the public service?

Anywhere a depreciating capital cost is involved.

For instance, if the State invests in radiation oncology, the State bears the cost of that infastructure 365/24/7, whereas if it purchases those services from the private sector, it only pays the marginal cost of use.

Of course, that's quite a simplistic example, and doesn't take into account other factors, but it serves to illustrate the point.

I agree that it should be much simpler to employ somebody. One would have to think that, with IT, it should be possible to develop a Revenue or Government webpage or software that would allow an employer to simply tap in the new employee's details and then just plough on.

I am not sure about your point about marginal costs and capital costs. Somebody who invests capital eventually has to recoup it from the users of the service. If you have enough throughput to use a piece of equipment full-time then you should buy your own instead of using somebody else's and funding their proft. If the cost can be shared with others, e.g. VHI, then well and good but there is only a saving if you don't want to utilise the equipment on a full-time basis.

Also, if the maintenance, availability and updating of a piece of land, plant or equipment (or even the skil sets of personnel) is of fundamental importance to achieving your policy objectives then you should maintain control over such equipment and personnel.

Co-location, however flawed it may be, is all about regaining control over public hospitals, doctor, beds and equipment. The private suppliers are being asked to separate themselves out.

Zhou_Enlai wrote:

I am not sure about your point about marginal costs and capital costs. Somebody who invests capital eventually has to recoup it from the users of the service.

Yes, but where users include both private patients and public patients (whose bills are paid by the HSE) the State only bears a portion of the capital costs, whereas is the State owns the asset, the State bears the entire cost, including the opportunity cost of the asset remaining idle. The reference to paying only the marginal cost could equally be read as the avoidance of opportunity cost.

Obviously, if the State has sufficient demand to keep the asset in constant use, it makes sense to invest in the asset, but that is rarely the case.

Furthermore, if the State both provides and uses the service, its operating in a inert market, whereas if the State can choose between different providers, it can exercise consumer power, which theoretically should lead to lower costs.

Of course, all of this sounds very right wing, and is not some sort of prescription for public sector reform. However, I do think we need to start thinking about the provision of public services in terms of economics. You can't call for 'value for money' for your tax dollars and then expect the public service to run without any regard to economic management.

I'm fed up listening to ultra left wing politicians decrying the state of public services in one breath and spouting rubbish about the role of the private sector in the next.

Zhou_Enlai wrote:

Co-location, however flawed it may be, is all about regaining control over public hospitals, doctor, beds and equipment. The private suppliers are being asked to separate themselves out.

Agreed, but its interesting that the HSE appear to have contracted with several of private hospitals involved in provide extra capacity. This is a welcome development in my book, in addtion to removing the abuse of the public system by private practitioners.

seinfeld wrote:

Zhou_Enlai wrote:

Co-location, however flawed it may be, is all about regaining control over public hospitals, doctor, beds and equipment. The private suppliers are being asked to separate themselves out.

Agreed, but its interesting that the HSE appear to have contracted with several of private hospitals involved in provide extra capacity. This is a welcome development in my book, in addtion to removing the abuse of the public system by private practitioners.

By "gaining control over public hospitals" what do ye mean? By saying this you are implying that at present there is little or no control over public hospitals..

And I agree that the state could help job creation and boost activity and that competitiveness isn't just about saving money - proactivity must be involved too.

seinfeld wrote:

Zhou_Enlai wrote:

seinfeld wrote:

....the State needs to reduce both the regulatory and fiscal burden on economy's productive capacity, and stimulate whatever latent productive capacity exists.

What regulations can be reduced and who should do it? Everything is about anti-avoidance. The new VAT on property regime has wholly failed to simplify the system because the Dept of Finance insisted on changing it to include increased anti-avoidance measures to protect the exchequer.

From my own experience of working for myself, the prospect of employing someone else to help me is really not appealing. That isn't because of cost, its because of the various hoops I will have to jump through to bring that process to a conclusion, which is addition to the numerous hoops I already I have to jump through (eg filing VAT returns every 2 months). It should be possible to employ someone without having to employ an accountant first.

Zhou_Enlai wrote:

seinfeld wrote:

Reducing the fiscal burden will however require trimming public sector expenditure in the short term, which will require much greater dependency on the private sector to provide services. I think there is a realisation of this at Government level (eg increased use of PPPs for schools, co-located hospitals which reserve capacity for the HSE) but idealogical dogma will always be an issue.

Where do you see a cost saving in getting private operators to provide services already performed by the public service?

Anywhere a depreciating capital cost is involved.

For instance, if the State invests in radiation oncology, the State bears the cost of that infastructure 365/24/7, whereas if it purchases those services from the private sector, it only pays the marginal cost of use.
Of course, that's quite a simplistic example, and doesn't take into account other factors, but it serves to illustrate the point.

I have operated in the public and private sectors. In my view essential services are by and large much better provided by a well-run public sector. By essential services I mean those basics that are essential for life like water and sewerage services and health services, communications infrastructure, transport, "safety net" housing: I would add education and research.

All of these services are needed for the productive capacity of the country to be realised.

When these services are privatised some of the other factors you refer to I assume are the profit element without which the privatised service will not be provided. This is paid for by the consumer: the government and individual citizens. In addition there are costs of monitoring and overview of the services by the public sector, the costs of the tendering appointment process and any legal costs arising from it.

The price paid for the privatised service of course includes the entire cost of the asset that is being used: this is not donated by the private investor but is paid for by the users. The price charged by the PPP contractor/service provider must also include the cost of any failed bids it has made and for any unproductive company time: these can be substantial and the private operator has to recoup them from somewhere.

Equally importantly to the economic costs of privatisation in my view is the loss of public service ethos. In Ireland public service ethos has to struggle to emerge from me feinism and the colonial attitudes that were embodied into the Irish Civil Service from its days as an arm of the English State. But even dilute or shaky public bodies operate to the public interest as their primary objective whilst private companies have no choice but to operate to the bottom line of profitability.

Privatisation has been a disaster for telecommunications in Ireland, could well yet prove a disaster in the case of Aer Lingus, the effective privatisation of Coillte (required to operate to the bottom line) has lead to poor environmental as well as poor commercial operation.

PPPs for hospitals using up precious public land on hospital sites is a ludicrously unco-ordinated and opportunistic policy, with duplication of some facilities alongside underinvestment in others. I don't believe there is any evidence they will benefit anyone other than big taxpayers and people who have more money already than they will ever need.

We have a great example of PPP up and running for some time - the toll bridge on the M50. We have paid the cost of the bridge many times over and the costs of the lost productive time due to the inefficiency of its operation has been enormous.

Auditor #9 wrote:

seinfeld wrote:

Zhou_Enlai wrote:

Co-location, however flawed it may be, is all about regaining control over public hospitals, doctor, beds and equipment. The private suppliers are being asked to separate themselves out.

Agreed, but its interesting that the HSE appear to have contracted with several of private hospitals involved in provide extra capacity. This is a welcome development in my book, in addtion to removing the abuse of the public system by private practitioners.

By "gaining control over public hospitals" what do ye mean? By saying this you are implying that at present there is little or no control over public hospitals..

Public assets in public hospitals are currently being used by private medical practioners (consultants). Regaining control means that the State, rather than the consultant, decides how public hospitals should be used.

In an ideal world, you could just tell the consultants to go away and build their own hospitals, but in the real world, consultants will say: "Fine, but we're not going to work in your public hospital at all then".

Hence the need to sweeten the deal for them, through measures like co-location tax breaks and juicy contracts.

cactus flower wrote:

I have operated in the public and private sectors. In my view essential services are by and large much better provided by a well-run public sector.

A "well-run public sector" is something of an oxymoron.

I'm all for the Public Realm, but we're talking about economic competitiveness here.

If your neighbour has shifted towards private provision of public service, and has demonstrably become more competitive as a result, do you:

1. Cling to the idea of the a State-provided public service in the hope that some day, some Government might be able to get it right, even though all Governments to date have got it wrong

or

2. Follow suit

It is a very mixed bag in the UK. They have made a mess of the public service with targets and a lot of their private contracting out of technology projects has ended up in huge losses. A company involved in getting new tube lines recently went bust.

There is some merit to privatisation in certain spheres but it really requires a case by case assessment. You have to be able to look 100 years down the line, not just 20.

I agree wholeheartedly with Cactus Flower's point about the public service ethos and the public service being better placed to provide critical infrastructure. Civil Servants may have their flaws (elevenses, fear or performance monitoring and low risk taking) but they have great virtues as well.

The UK are having to bring the railway network back into public ownership at enormous cost. They have not privatised health services.

Zhou_Enlai wrote:

I agree wholeheartedly with Cactus Flower's point about the public service ethos and the public service being better placed to provide critical infrastructure. Civil Servants may have their flaws (elevenses, fear or performance monitoring and low risk taking) but they have great virtues as well.

Obviously, the public/private debate is multi-faceted, but what I'm trying to get at is whether or not a leaner public sector improves economic competitiveness.

If it does, it has to form part of our decision-making.

Privatisation in the UK has obviously had all sorts of negative and positive effects in terms of social equality, environmental protection, public safety etc etc, but in purely economic terms, was it the right thing to do?

The UK was an economic basket case in the 1970s, but today its economy is far more robust than that of its traditional rivals in France and Germany, who continue to spends vasts amounts of their national wealth on the public sector.

From Ireland's point of view, economic success or failure has a far more immediate impact on quality of life than in larger economies, so should we put economic stability at the forefront of our decision making?