budget2011: where to now?
DESCRIPTION
A talk I gave after Ireland's 2011 budget.TRANSCRIPT
Where to now?Stephen Kinsella | UL
Tonight:
Midwest-Budget-The 4 Year Plan-EU/IMF
This day, last year, this room, I said:
WE DID THIS TO OURSELVES BY
THINKING SHORT-TERM.
#BUDGET10
#BUDGET10Capital investment slashed
#BUDGET10Capital investment slashed
70 million for flood victims
#BUDGET10Capital investment slashed
70 million for flood victims
Tax breaks for startups
#BUDGET10Capital investment slashed
70 million for flood victims
Tax breaks for startups
Credit review for banks
#BUDGET10Capital investment slashed
70 million for flood victims
Tax breaks for startups
Credit review for banks
Mortgage default moratorium~beware!
#BUDGET10Capital investment slashed
70 million for flood victims
Tax breaks for startups
Credit review for banks
Mortgage default moratorium~beware!
Carbon taxes
#BUDGET10Capital investment slashed
70 million for flood victims
Tax breaks for startups
Credit review for banks
Mortgage default moratorium~beware!
Carbon taxes
Pension reform mooted.
#BUDGET10Capital investment slashed
70 million for flood victims
Tax breaks for startups
Credit review for banks
Mortgage default moratorium~beware!
Carbon taxes
Pension reform mooted.
National Recovery Bonds
#BUDGET11
#BUDGET11
Capital investment slashed, again
#BUDGET11
Capital investment slashed, again
Current expenditure left alone largely
#BUDGET11
Capital investment slashed, again
Current expenditure left alone largely
Capital expenditure slashed
#BUDGET11
Capital investment slashed, again
Current expenditure left alone largely
Capital expenditure slashed
Travel Tax
#BUDGET11
Capital investment slashed, again
Current expenditure left alone largely
Capital expenditure slashed
Travel Tax
Tax breaks for startups, again
#BUDGET11
Capital investment slashed, again
Current expenditure left alone largely
Capital expenditure slashed
Travel Tax
Tax breaks for startups, again
Carbon taxes~No
#BUDGET11
Capital investment slashed, again
Current expenditure left alone largely
Capital expenditure slashed
Travel Tax
Tax breaks for startups, again
Carbon taxes~No
Pension reform? mooted.
#BUDGET11
Capital investment slashed, again
Current expenditure left alone largely
Capital expenditure slashed
Travel Tax
Tax breaks for startups, again
Carbon taxes~No
Pension reform? mooted.
Municipal bonds X
THE MIDWEST
REGIONAL DEVELOPMENT IN CONTEXT
< 1950: agriculture
1950-1960: Agriculture + Light industries (flour, meat, sweets)
1970+: IDA policies with Shannon Airport deliver new large companies like Ferenka, Krups
1978: Ferenka leaves, local economy devastated: 1400 let go
1998 Krups leaves, local economy devastated: 800 let go
1990s: UL, IDA, Shannon Development and Shannon Airport entice DELL, Vistakon, Analog, etc
2009: Dell leaves: 1900+ let go
See the pattern?
http://www.ronanlyons.com/wp-content/uploads/2010/02/mu25-unemp.png
A regional depression.
2007 2010
Need investment, job creation, active labour
market policies.
Budget.
Some Context.
1 billion = 1000 million.
One more time:
1 billion = 1000 million.
1 billion months ago, these guys
were in charge.
Think of grains of salt.a thousand: in a pincha million: in a cup,a billion: in a bathtub.
Total banking sector liabilities c.440bnThink 440 bathtubs of salt. That’s Thomond Park, filled with bathtubs.
€85bn
€85bn
4 year plan.
any measure, spending grew rapidly from 2000 onwards, the more so whensome of the measured output growth was borrowed from the future so tospeak, through building a large unsold stock of houses, retail and o!cespace, which will overhang the market for many years. Governmentspending relative to GNP was growing up to 2007, and even more so if theGNP growth rates and hence tax buoyancy from, say, 2002 onwards were intruth not as good as they looked, as we see in Figure 5.3. The dramatic
Understanding Ireland’s Economic Crisis
108
30,000
40,000
50,000
60,000
70,000
80,000
2000 2001 2002 2003 2004
Year
2005 2006 2007 2008 2009
RevenuesSpending
! M
illio
n
Figure 5.2: Irish Government Spending and Revenues
Source: CSO, National Accounts Database.Note: The 2009 figure is a forecasted annual figure.
!"#$%&'()*&!+%,-.&/,&01%,-/,23&4%5/6/7&",-&4%#73&8999:9;&
8999 899<& 8998& 899= 899) 899' 899> 899? 899@ 899;5!"#$%&
'()*+&,&-.$*/)0
1234& 1531& 1132& 636& 537& 1131& 1235& 1138& 93:& 631&
-;<<)*#&=&->&,&-.$*/)&
1134& 1936& 143:& 937& 636& 123?& 1235& 1731& 939& 532&
-@A&,&-.$*/)& 835& 439& 435& ?38& 737& 738& 432& 439& 431& =434&
!"#$%&$B&,&CD@& ?436& ?536& ?638& ?535& ?537& ?632& ?53:& ?:3:& 4438& 8131&
CCE&F)GHIH#00& 436& 239& =234& 234& 134& 136& ?32& 237& =636& =1136&
CCE&F)J#00 ?63:& ?835& ?737& ?132& 7934& 7638& 7832& 7831& 4431& 5438&
0!"#$%&K&/<"BB&I;<<)*#&L&MNI.)O;)<&I$(H#$%&L&-)*#<$%&>;*+&P->Q&00&E"#.&$B&$&()<I)*#$/)&"G&CF@&!"#$%&!.)&7229&GH/;<)&HB&$&G"<)I$B#)+&$**;$%&GH/;<)3&
06_IEC-05 17/09/2010 07:20 Page 108
any measure, spending grew rapidly from 2000 onwards, the more so whensome of the measured output growth was borrowed from the future so tospeak, through building a large unsold stock of houses, retail and o!cespace, which will overhang the market for many years. Governmentspending relative to GNP was growing up to 2007, and even more so if theGNP growth rates and hence tax buoyancy from, say, 2002 onwards were intruth not as good as they looked, as we see in Figure 5.3. The dramatic
Understanding Ireland’s Economic Crisis
108
30,000
40,000
50,000
60,000
70,000
80,000
2000 2001 2002 2003 2004
Year
2005 2006 2007 2008 2009
RevenuesSpending
! M
illio
n
Figure 5.2: Irish Government Spending and Revenues
Source: CSO, National Accounts Database.Note: The 2009 figure is a forecasted annual figure.
!"#$%&'()*&!+%,-.&/,&01%,-/,23&4%5/6/7&",-&4%#73&8999:9;&
8999 899<& 8998& 899= 899) 899' 899> 899? 899@ 899;5!"#$%&
'()*+&,&-.$*/)0
1234& 1531& 1132& 636& 537& 1131& 1235& 1138& 93:& 631&
-;<<)*#&=&->&,&-.$*/)&
1134& 1936& 143:& 937& 636& 123?& 1235& 1731& 939& 532&
-@A&,&-.$*/)& 835& 439& 435& ?38& 737& 738& 432& 439& 431& =434&
!"#$%&$B&,&CD@& ?436& ?536& ?638& ?535& ?537& ?632& ?53:& ?:3:& 4438& 8131&
CCE&F)GHIH#00& 436& 239& =234& 234& 134& 136& ?32& 237& =636& =1136&
CCE&F)J#00 ?63:& ?835& ?737& ?132& 7934& 7638& 7832& 7831& 4431& 5438&
0!"#$%&K&/<"BB&I;<<)*#&L&MNI.)O;)<&I$(H#$%&L&-)*#<$%&>;*+&P->Q&00&E"#.&$B&$&()<I)*#$/)&"G&CF@&!"#$%&!.)&7229&GH/;<)&HB&$&G"<)I$B#)+&$**;$%&GH/;<)3&
06_IEC-05 17/09/2010 07:20 Page 108
Irish Government Spending and Revenues.Source: CSO, National Accounts Database. Note: The 2009 figure is a forecasted annual figure.
any measure, spending grew rapidly from 2000 onwards, the more so whensome of the measured output growth was borrowed from the future so tospeak, through building a large unsold stock of houses, retail and o!cespace, which will overhang the market for many years. Governmentspending relative to GNP was growing up to 2007, and even more so if theGNP growth rates and hence tax buoyancy from, say, 2002 onwards were intruth not as good as they looked, as we see in Figure 5.3. The dramatic
Understanding Ireland’s Economic Crisis
108
30,000
40,000
50,000
60,000
70,000
80,000
2000 2001 2002 2003 2004
Year
2005 2006 2007 2008 2009
RevenuesSpending
! M
illio
n
Figure 5.2: Irish Government Spending and Revenues
Source: CSO, National Accounts Database.Note: The 2009 figure is a forecasted annual figure.
!"#$%&'()*&!+%,-.&/,&01%,-/,23&4%5/6/7&",-&4%#73&8999:9;&
8999 899<& 8998& 899= 899) 899' 899> 899? 899@ 899;5!"#$%&
'()*+&,&-.$*/)0
1234& 1531& 1132& 636& 537& 1131& 1235& 1138& 93:& 631&
-;<<)*#&=&->&,&-.$*/)&
1134& 1936& 143:& 937& 636& 123?& 1235& 1731& 939& 532&
-@A&,&-.$*/)& 835& 439& 435& ?38& 737& 738& 432& 439& 431& =434&
!"#$%&$B&,&CD@& ?436& ?536& ?638& ?535& ?537& ?632& ?53:& ?:3:& 4438& 8131&
CCE&F)GHIH#00& 436& 239& =234& 234& 134& 136& ?32& 237& =636& =1136&
CCE&F)J#00 ?63:& ?835& ?737& ?132& 7934& 7638& 7832& 7831& 4431& 5438&
0!"#$%&K&/<"BB&I;<<)*#&L&MNI.)O;)<&I$(H#$%&L&-)*#<$%&>;*+&P->Q&00&E"#.&$B&$&()<I)*#$/)&"G&CF@&!"#$%&!.)&7229&GH/;<)&HB&$&G"<)I$B#)+&$**;$%&GH/;<)3&
06_IEC-05 17/09/2010 07:20 Page 108
Irish Government Spending and Revenues.Source: CSO, National Accounts Database. Note: The 2009 figure is a forecasted annual figure.
any measure, spending grew rapidly from 2000 onwards, the more so whensome of the measured output growth was borrowed from the future so tospeak, through building a large unsold stock of houses, retail and o!cespace, which will overhang the market for many years. Governmentspending relative to GNP was growing up to 2007, and even more so if theGNP growth rates and hence tax buoyancy from, say, 2002 onwards were intruth not as good as they looked, as we see in Figure 5.3. The dramatic
Understanding Ireland’s Economic Crisis
108
30,000
40,000
50,000
60,000
70,000
80,000
2000 2001 2002 2003 2004
Year
2005 2006 2007 2008 2009
RevenuesSpending
! M
illio
n
Figure 5.2: Irish Government Spending and Revenues
Source: CSO, National Accounts Database.Note: The 2009 figure is a forecasted annual figure.
!"#$%&'()*&!+%,-.&/,&01%,-/,23&4%5/6/7&",-&4%#73&8999:9;&
8999 899<& 8998& 899= 899) 899' 899> 899? 899@ 899;5!"#$%&
'()*+&,&-.$*/)0
1234& 1531& 1132& 636& 537& 1131& 1235& 1138& 93:& 631&
-;<<)*#&=&->&,&-.$*/)&
1134& 1936& 143:& 937& 636& 123?& 1235& 1731& 939& 532&
-@A&,&-.$*/)& 835& 439& 435& ?38& 737& 738& 432& 439& 431& =434&
!"#$%&$B&,&CD@& ?436& ?536& ?638& ?535& ?537& ?632& ?53:& ?:3:& 4438& 8131&
CCE&F)GHIH#00& 436& 239& =234& 234& 134& 136& ?32& 237& =636& =1136&
CCE&F)J#00 ?63:& ?835& ?737& ?132& 7934& 7638& 7832& 7831& 4431& 5438&
0!"#$%&K&/<"BB&I;<<)*#&L&MNI.)O;)<&I$(H#$%&L&-)*#<$%&>;*+&P->Q&00&E"#.&$B&$&()<I)*#$/)&"G&CF@&!"#$%&!.)&7229&GH/;<)&HB&$&G"<)I$B#)+&$**;$%&GH/;<)3&
06_IEC-05 17/09/2010 07:20 Page 108
Borrowing
Irish Government Spending and Revenues.Source: CSO, National Accounts Database. Note: The 2009 figure is a forecasted annual figure.
any measure, spending grew rapidly from 2000 onwards, the more so whensome of the measured output growth was borrowed from the future so tospeak, through building a large unsold stock of houses, retail and o!cespace, which will overhang the market for many years. Governmentspending relative to GNP was growing up to 2007, and even more so if theGNP growth rates and hence tax buoyancy from, say, 2002 onwards were intruth not as good as they looked, as we see in Figure 5.3. The dramatic
Understanding Ireland’s Economic Crisis
108
30,000
40,000
50,000
60,000
70,000
80,000
2000 2001 2002 2003 2004
Year
2005 2006 2007 2008 2009
RevenuesSpending
! M
illio
n
Figure 5.2: Irish Government Spending and Revenues
Source: CSO, National Accounts Database.Note: The 2009 figure is a forecasted annual figure.
!"#$%&'()*&!+%,-.&/,&01%,-/,23&4%5/6/7&",-&4%#73&8999:9;&
8999 899<& 8998& 899= 899) 899' 899> 899? 899@ 899;5!"#$%&
'()*+&,&-.$*/)0
1234& 1531& 1132& 636& 537& 1131& 1235& 1138& 93:& 631&
-;<<)*#&=&->&,&-.$*/)&
1134& 1936& 143:& 937& 636& 123?& 1235& 1731& 939& 532&
-@A&,&-.$*/)& 835& 439& 435& ?38& 737& 738& 432& 439& 431& =434&
!"#$%&$B&,&CD@& ?436& ?536& ?638& ?535& ?537& ?632& ?53:& ?:3:& 4438& 8131&
CCE&F)GHIH#00& 436& 239& =234& 234& 134& 136& ?32& 237& =636& =1136&
CCE&F)J#00 ?63:& ?835& ?737& ?132& 7934& 7638& 7832& 7831& 4431& 5438&
0!"#$%&K&/<"BB&I;<<)*#&L&MNI.)O;)<&I$(H#$%&L&-)*#<$%&>;*+&P->Q&00&E"#.&$B&$&()<I)*#$/)&"G&CF@&!"#$%&!.)&7229&GH/;<)&HB&$&G"<)I$B#)+&$**;$%&GH/;<)3&
06_IEC-05 17/09/2010 07:20 Page 108
Borrowing
Irish Government Spending and Revenues.Source: CSO, National Accounts Database. Note: The 2009 figure is a forecasted annual figure.
any measure, spending grew rapidly from 2000 onwards, the more so whensome of the measured output growth was borrowed from the future so tospeak, through building a large unsold stock of houses, retail and o!cespace, which will overhang the market for many years. Governmentspending relative to GNP was growing up to 2007, and even more so if theGNP growth rates and hence tax buoyancy from, say, 2002 onwards were intruth not as good as they looked, as we see in Figure 5.3. The dramatic
Understanding Ireland’s Economic Crisis
108
30,000
40,000
50,000
60,000
70,000
80,000
2000 2001 2002 2003 2004
Year
2005 2006 2007 2008 2009
RevenuesSpending
! M
illio
n
Figure 5.2: Irish Government Spending and Revenues
Source: CSO, National Accounts Database.Note: The 2009 figure is a forecasted annual figure.
!"#$%&'()*&!+%,-.&/,&01%,-/,23&4%5/6/7&",-&4%#73&8999:9;&
8999 899<& 8998& 899= 899) 899' 899> 899? 899@ 899;5!"#$%&
'()*+&,&-.$*/)0
1234& 1531& 1132& 636& 537& 1131& 1235& 1138& 93:& 631&
-;<<)*#&=&->&,&-.$*/)&
1134& 1936& 143:& 937& 636& 123?& 1235& 1731& 939& 532&
-@A&,&-.$*/)& 835& 439& 435& ?38& 737& 738& 432& 439& 431& =434&
!"#$%&$B&,&CD@& ?436& ?536& ?638& ?535& ?537& ?632& ?53:& ?:3:& 4438& 8131&
CCE&F)GHIH#00& 436& 239& =234& 234& 134& 136& ?32& 237& =636& =1136&
CCE&F)J#00 ?63:& ?835& ?737& ?132& 7934& 7638& 7832& 7831& 4431& 5438&
0!"#$%&K&/<"BB&I;<<)*#&L&MNI.)O;)<&I$(H#$%&L&-)*#<$%&>;*+&P->Q&00&E"#.&$B&$&()<I)*#$/)&"G&CF@&!"#$%&!.)&7229&GH/;<)&HB&$&G"<)I$B#)+&$**;$%&GH/;<)3&
06_IEC-05 17/09/2010 07:20 Page 108
Borrowing
2015
Irish Government Spending and Revenues.Source: CSO, National Accounts Database. Note: The 2009 figure is a forecasted annual figure.
any measure, spending grew rapidly from 2000 onwards, the more so whensome of the measured output growth was borrowed from the future so tospeak, through building a large unsold stock of houses, retail and o!cespace, which will overhang the market for many years. Governmentspending relative to GNP was growing up to 2007, and even more so if theGNP growth rates and hence tax buoyancy from, say, 2002 onwards were intruth not as good as they looked, as we see in Figure 5.3. The dramatic
Understanding Ireland’s Economic Crisis
108
30,000
40,000
50,000
60,000
70,000
80,000
2000 2001 2002 2003 2004
Year
2005 2006 2007 2008 2009
RevenuesSpending
! M
illio
n
Figure 5.2: Irish Government Spending and Revenues
Source: CSO, National Accounts Database.Note: The 2009 figure is a forecasted annual figure.
!"#$%&'()*&!+%,-.&/,&01%,-/,23&4%5/6/7&",-&4%#73&8999:9;&
8999 899<& 8998& 899= 899) 899' 899> 899? 899@ 899;5!"#$%&
'()*+&,&-.$*/)0
1234& 1531& 1132& 636& 537& 1131& 1235& 1138& 93:& 631&
-;<<)*#&=&->&,&-.$*/)&
1134& 1936& 143:& 937& 636& 123?& 1235& 1731& 939& 532&
-@A&,&-.$*/)& 835& 439& 435& ?38& 737& 738& 432& 439& 431& =434&
!"#$%&$B&,&CD@& ?436& ?536& ?638& ?535& ?537& ?632& ?53:& ?:3:& 4438& 8131&
CCE&F)GHIH#00& 436& 239& =234& 234& 134& 136& ?32& 237& =636& =1136&
CCE&F)J#00 ?63:& ?835& ?737& ?132& 7934& 7638& 7832& 7831& 4431& 5438&
0!"#$%&K&/<"BB&I;<<)*#&L&MNI.)O;)<&I$(H#$%&L&-)*#<$%&>;*+&P->Q&00&E"#.&$B&$&()<I)*#$/)&"G&CF@&!"#$%&!.)&7229&GH/;<)&HB&$&G"<)I$B#)+&$**;$%&GH/;<)3&
06_IEC-05 17/09/2010 07:20 Page 108
Borrowing
2015
Irish Government Spending and Revenues.Source: CSO, National Accounts Database. Note: The 2009 figure is a forecasted annual figure.
any measure, spending grew rapidly from 2000 onwards, the more so whensome of the measured output growth was borrowed from the future so tospeak, through building a large unsold stock of houses, retail and o!cespace, which will overhang the market for many years. Governmentspending relative to GNP was growing up to 2007, and even more so if theGNP growth rates and hence tax buoyancy from, say, 2002 onwards were intruth not as good as they looked, as we see in Figure 5.3. The dramatic
Understanding Ireland’s Economic Crisis
108
30,000
40,000
50,000
60,000
70,000
80,000
2000 2001 2002 2003 2004
Year
2005 2006 2007 2008 2009
RevenuesSpending
! M
illio
n
Figure 5.2: Irish Government Spending and Revenues
Source: CSO, National Accounts Database.Note: The 2009 figure is a forecasted annual figure.
!"#$%&'()*&!+%,-.&/,&01%,-/,23&4%5/6/7&",-&4%#73&8999:9;&
8999 899<& 8998& 899= 899) 899' 899> 899? 899@ 899;5!"#$%&
'()*+&,&-.$*/)0
1234& 1531& 1132& 636& 537& 1131& 1235& 1138& 93:& 631&
-;<<)*#&=&->&,&-.$*/)&
1134& 1936& 143:& 937& 636& 123?& 1235& 1731& 939& 532&
-@A&,&-.$*/)& 835& 439& 435& ?38& 737& 738& 432& 439& 431& =434&
!"#$%&$B&,&CD@& ?436& ?536& ?638& ?535& ?537& ?632& ?53:& ?:3:& 4438& 8131&
CCE&F)GHIH#00& 436& 239& =234& 234& 134& 136& ?32& 237& =636& =1136&
CCE&F)J#00 ?63:& ?835& ?737& ?132& 7934& 7638& 7832& 7831& 4431& 5438&
0!"#$%&K&/<"BB&I;<<)*#&L&MNI.)O;)<&I$(H#$%&L&-)*#<$%&>;*+&P->Q&00&E"#.&$B&$&()<I)*#$/)&"G&CF@&!"#$%&!.)&7229&GH/;<)&HB&$&G"<)I$B#)+&$**;$%&GH/;<)3&
06_IEC-05 17/09/2010 07:20 Page 108
Borrowing
2015
Irish Government Spending and Revenues.Source: CSO, National Accounts Database. Note: The 2009 figure is a forecasted annual figure.
any measure, spending grew rapidly from 2000 onwards, the more so whensome of the measured output growth was borrowed from the future so tospeak, through building a large unsold stock of houses, retail and o!cespace, which will overhang the market for many years. Governmentspending relative to GNP was growing up to 2007, and even more so if theGNP growth rates and hence tax buoyancy from, say, 2002 onwards were intruth not as good as they looked, as we see in Figure 5.3. The dramatic
Understanding Ireland’s Economic Crisis
108
30,000
40,000
50,000
60,000
70,000
80,000
2000 2001 2002 2003 2004
Year
2005 2006 2007 2008 2009
RevenuesSpending
! M
illio
n
Figure 5.2: Irish Government Spending and Revenues
Source: CSO, National Accounts Database.Note: The 2009 figure is a forecasted annual figure.
!"#$%&'()*&!+%,-.&/,&01%,-/,23&4%5/6/7&",-&4%#73&8999:9;&
8999 899<& 8998& 899= 899) 899' 899> 899? 899@ 899;5!"#$%&
'()*+&,&-.$*/)0
1234& 1531& 1132& 636& 537& 1131& 1235& 1138& 93:& 631&
-;<<)*#&=&->&,&-.$*/)&
1134& 1936& 143:& 937& 636& 123?& 1235& 1731& 939& 532&
-@A&,&-.$*/)& 835& 439& 435& ?38& 737& 738& 432& 439& 431& =434&
!"#$%&$B&,&CD@& ?436& ?536& ?638& ?535& ?537& ?632& ?53:& ?:3:& 4438& 8131&
CCE&F)GHIH#00& 436& 239& =234& 234& 134& 136& ?32& 237& =636& =1136&
CCE&F)J#00 ?63:& ?835& ?737& ?132& 7934& 7638& 7832& 7831& 4431& 5438&
0!"#$%&K&/<"BB&I;<<)*#&L&MNI.)O;)<&I$(H#$%&L&-)*#<$%&>;*+&P->Q&00&E"#.&$B&$&()<I)*#$/)&"G&CF@&!"#$%&!.)&7229&GH/;<)&HB&$&G"<)I$B#)+&$**;$%&GH/;<)3&
06_IEC-05 17/09/2010 07:20 Page 108
Borrowing
2015
Irish Government Spending and Revenues.Source: CSO, National Accounts Database. Note: The 2009 figure is a forecasted annual figure.
any measure, spending grew rapidly from 2000 onwards, the more so whensome of the measured output growth was borrowed from the future so tospeak, through building a large unsold stock of houses, retail and o!cespace, which will overhang the market for many years. Governmentspending relative to GNP was growing up to 2007, and even more so if theGNP growth rates and hence tax buoyancy from, say, 2002 onwards were intruth not as good as they looked, as we see in Figure 5.3. The dramatic
Understanding Ireland’s Economic Crisis
108
30,000
40,000
50,000
60,000
70,000
80,000
2000 2001 2002 2003 2004
Year
2005 2006 2007 2008 2009
RevenuesSpending
! M
illio
n
Figure 5.2: Irish Government Spending and Revenues
Source: CSO, National Accounts Database.Note: The 2009 figure is a forecasted annual figure.
!"#$%&'()*&!+%,-.&/,&01%,-/,23&4%5/6/7&",-&4%#73&8999:9;&
8999 899<& 8998& 899= 899) 899' 899> 899? 899@ 899;5!"#$%&
'()*+&,&-.$*/)0
1234& 1531& 1132& 636& 537& 1131& 1235& 1138& 93:& 631&
-;<<)*#&=&->&,&-.$*/)&
1134& 1936& 143:& 937& 636& 123?& 1235& 1731& 939& 532&
-@A&,&-.$*/)& 835& 439& 435& ?38& 737& 738& 432& 439& 431& =434&
!"#$%&$B&,&CD@& ?436& ?536& ?638& ?535& ?537& ?632& ?53:& ?:3:& 4438& 8131&
CCE&F)GHIH#00& 436& 239& =234& 234& 134& 136& ?32& 237& =636& =1136&
CCE&F)J#00 ?63:& ?835& ?737& ?132& 7934& 7638& 7832& 7831& 4431& 5438&
0!"#$%&K&/<"BB&I;<<)*#&L&MNI.)O;)<&I$(H#$%&L&-)*#<$%&>;*+&P->Q&00&E"#.&$B&$&()<I)*#$/)&"G&CF@&!"#$%&!.)&7229&GH/;<)&HB&$&G"<)I$B#)+&$**;$%&GH/;<)3&
06_IEC-05 17/09/2010 07:20 Page 108
Borrowing
2015
1/3
Irish Government Spending and Revenues.Source: CSO, National Accounts Database. Note: The 2009 figure is a forecasted annual figure.
any measure, spending grew rapidly from 2000 onwards, the more so whensome of the measured output growth was borrowed from the future so tospeak, through building a large unsold stock of houses, retail and o!cespace, which will overhang the market for many years. Governmentspending relative to GNP was growing up to 2007, and even more so if theGNP growth rates and hence tax buoyancy from, say, 2002 onwards were intruth not as good as they looked, as we see in Figure 5.3. The dramatic
Understanding Ireland’s Economic Crisis
108
30,000
40,000
50,000
60,000
70,000
80,000
2000 2001 2002 2003 2004
Year
2005 2006 2007 2008 2009
RevenuesSpending
! M
illio
n
Figure 5.2: Irish Government Spending and Revenues
Source: CSO, National Accounts Database.Note: The 2009 figure is a forecasted annual figure.
!"#$%&'()*&!+%,-.&/,&01%,-/,23&4%5/6/7&",-&4%#73&8999:9;&
8999 899<& 8998& 899= 899) 899' 899> 899? 899@ 899;5!"#$%&
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-;<<)*#&=&->&,&-.$*/)&
1134& 1936& 143:& 937& 636& 123?& 1235& 1731& 939& 532&
-@A&,&-.$*/)& 835& 439& 435& ?38& 737& 738& 432& 439& 431& =434&
!"#$%&$B&,&CD@& ?436& ?536& ?638& ?535& ?537& ?632& ?53:& ?:3:& 4438& 8131&
CCE&F)GHIH#00& 436& 239& =234& 234& 134& 136& ?32& 237& =636& =1136&
CCE&F)J#00 ?63:& ?835& ?737& ?132& 7934& 7638& 7832& 7831& 4431& 5438&
0!"#$%&K&/<"BB&I;<<)*#&L&MNI.)O;)<&I$(H#$%&L&-)*#<$%&>;*+&P->Q&00&E"#.&$B&$&()<I)*#$/)&"G&CF@&!"#$%&!.)&7229&GH/;<)&HB&$&G"<)I$B#)+&$**;$%&GH/;<)3&
06_IEC-05 17/09/2010 07:20 Page 108
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2015
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2/3
Irish Government Spending and Revenues.Source: CSO, National Accounts Database. Note: The 2009 figure is a forecasted annual figure.
Bud
get 2
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2009
Pay
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(Dec
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-6
-5
-4
-3
-2
-1
0
Bud
get 2
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(Oct
ober
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8)
Feb
2009
Pay
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ents
Sup
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2009
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(Dec
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-6
-5
-4
-3
-2
-1
0
-2.0
Bud
get 2
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(Oct
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8)
Feb
2009
Pay
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ents
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udge
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udge
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-3
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-1
0
-2.0 -2.1
Bud
get 2
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(Oct
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Feb
2009
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udge
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-2
-1
0
-2.0 -2.1
-5.4
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get 2
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2009
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2009
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t 201
0 (D
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(Dec
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-1
0
-2.0 -2.1
-5.4
-4.1
Bud
get 2
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(Oct
ober
200
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Feb
2009
Pay
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ents
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ry B
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t (A
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2009
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t 201
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-4.1
-6.0
Budget.
Not so bad.
What’s not there?
What’s next?
Social WelfareHealthEducationJusticeAgricultureEnterpriseOther
38%
Social WelfareHealthEducationJusticeAgricultureEnterpriseOther
38%
27%
Social WelfareHealthEducationJusticeAgricultureEnterpriseOther
38%
27%
15%
Social WelfareHealthEducationJusticeAgricultureEnterpriseOther
38%
27%
15%
4%
Social WelfareHealthEducationJusticeAgricultureEnterpriseOther
38%
27%
15%
4%3%
Social WelfareHealthEducationJusticeAgricultureEnterpriseOther
38%
27%
15%
4%3%
3%
Social WelfareHealthEducationJusticeAgricultureEnterpriseOther
38%
27%
15%
4%3%
3%10%
Social WelfareHealthEducationJusticeAgricultureEnterpriseOther
The Four year Plan.
2011 2012 2013 2014
Real GDP
Real GNP
Domestic DemandConsumption
Government
Investment
Exports
Imports
BOP (%GNP)
HICP
GDP Deflator
1.75 3.25 3 2.75
1 2.5 2.5 2.5
0 1 1.5 1.75
-3 -2 -2.25 -2
-6 5.25 5 5.25
5 5 4.25 4
2.75 3 3.25 3
0.25 1.5 2.5 3.5
0.75 1 1.75 1.75
0.75 1 1.25 1.5
-40
-30
-20
-10
0
10
20
2005 2006 2007 2008 2009 2010f 2011f 2012f 2013f 2014f
% Change Investment
% Change Investment
-40
-30
-20
-10
0
10
20
2005 2006 2007 2008 2009 2010f 2011f 2012f 2013f 2014f
% Change Investment
% Change Investment
0
12.5
25.0
37.5
50.0
Finlan
d 91
Nor
way
91
Swed
en 9
1Tu
rkey
00
Japan
97
Kore
a 97
Mala
ysia
91Th
ailan
d 97
Uru
guay
02
Irelan
d 08
Fiscal Costs of Banking Crises, % GDPAnglo
0
12.5
25.0
37.5
50.0
Finlan
d 91
Nor
way
91
Swed
en 9
1Tu
rkey
00
Japan
97
Kore
a 97
Mala
ysia
91Th
ailan
d 97
Uru
guay
02
Irelan
d 08
Fiscal Costs of Banking Crises, % GDPAnglo
BankProjected Assistance,
€bn
Anglo
AIB
BOI
Irish Nationwide
EBS
Total
29.28
7.48
3.75
5.40
0.35
46.26
The IMF.
EU/IMF€85bn
EU/IMF€85bn€35bn
EU/IMF€85bn€35bn€50bn
The Four year Plan won’t work.
MessageIreland’s GNP c. €130bn, Ireland’s GDP c.160bn
Debt : GNP ratio c.140%
Growth rates: 0-2% in next 4 years
Ireland’s banking system liabilities: €440bn
Debt rates: 5.83% in next 4 years
Unsustainable debt implies eventual default/restructuring
Reform.
Reform(s)
Publish full political financial accounts online, greater powers for Standards Commission
www.politicalreform.ie
Reform(s)
Publish full political financial accounts online, greater powers for Standards Commission
Reform committee system, repeal Abbeylara decision and give committees renewed investigative powers.
www.politicalreform.ie
Reform(s)
Publish full political financial accounts online, greater powers for Standards Commission
Reform committee system, repeal Abbeylara decision and give committees renewed investigative powers.
Rebalance relationship between executive and legislature as was intended in Article 28 of Constitution
www.politicalreform.ie
Reform(s)
Publish full political financial accounts online, greater powers for Standards Commission
Reform committee system, repeal Abbeylara decision and give committees renewed investigative powers.
Rebalance relationship between executive and legislature as was intended in Article 28 of Constitution
Meaningful open government with stronger FOI legislation, new whistleblower and lobbying legislation and public appointments board.
www.politicalreform.ie
Reform(s)
Reform local government with revenue raising powers and reform planning powers
www.politicalreform.ie
Reform(s)
Reform local government with revenue raising powers and reform planning powers
Diverse representation in public life through a reformed Senand which would encompass island of Ireland and diaspora in public life
www.politicalreform.ie
Reform(s)
Reform local government with revenue raising powers and reform planning powers
Diverse representation in public life through a reformed Senand which would encompass island of Ireland and diaspora in public life
Introduce gender quotas, lower voting age to 16, reform decision making process
www.politicalreform.ie
Reform(s)
Reform local government with revenue raising powers and reform planning powers
Diverse representation in public life through a reformed Senand which would encompass island of Ireland and diaspora in public life
Introduce gender quotas, lower voting age to 16, reform decision making process
Change the electoral system
www.politicalreform.ie
Reform(s)
Reform local government with revenue raising powers and reform planning powers
Diverse representation in public life through a reformed Senand which would encompass island of Ireland and diaspora in public life
Introduce gender quotas, lower voting age to 16, reform decision making process
Change the electoral system
Definition of Republic in constitution and statement of values
www.politicalreform.ie
Reform(s)
Reform local government with revenue raising powers and reform planning powers
Diverse representation in public life through a reformed Senand which would encompass island of Ireland and diaspora in public life
Introduce gender quotas, lower voting age to 16, reform decision making process
Change the electoral system
Definition of Republic in constitution and statement of values
Citizens assembly to be implemented
www.politicalreform.ie
