Two polls, two different narratives.  A Red C poll showed that an overwhelming majority in favour of abolishing the Universal Social Charge.  An Ireland Thinks poll shows that a clear majority want increased public services over tax cuts.  Which is a true reflection of public opinion?  Discuss. It may not be so contradictory.  People want more services and social supports but they ‘hate’ the USC.  For many, the USC is a legacy of the austerity period – part of a number of socially damaging measures.  That political parties have used the tax as a crude bid for ..read more

If the government parties were committed to implementing the proposals in the Programme for Government, they would not be having this current tax-cut row.  The Programme states: ‘In Budget 2021, there will be no change to income tax credits or bands. From Budget 2022 onwards, in the event that incomes are again rising as the economy recovers, credits and bands will be indexed linked to earnings.’ The Programme can’t be any clearer.  No indexation in 2021 (due to uncertainty during the Covid pandemic and lockdowns).  Starting in 2022, income tax credits and bands will be indexe ..read more

The Taoiseach is making a big play for ‘middle Ireland’.  In an interview with the Irish Times he stated: ‘. . . our basis for participation in this Government is that middle Ireland gets looked after, and that’s looking after working people. . . So we’d be very clear in this Government that we want income taxes reduced.’ To this end, Fine Gael is proposing: A major tax cut: an increase in the standard rate tax band of €4,000 – from €40,000 to €44,000 for a single person. Everyone earning above €44,000 would get €800.  Anyone earning below €40,000 would get nothing. A minor tax ..read more

The background noise in the public debate is that since inflation is ‘easing off’, prices should start coming down. We have heard this in the coverage over the meeting between the Government and representatives of the food sector.  However, this misrepresents how inflation impacts on living standards. If the rate of inflation falls this doesn’t mean prices fall.  It just means prices are rising at a slower level.  The inflation of last year and this year becomes embedded in our living costs going forward.  Last year, inflation ran at 8.1 percent.  This year inflation ..read more

There is a growing debate over why prices are so high, why prices aren’t falling, what is driving prices.  Conor Pope has another instalment in his series on price outrages.  Answers vary according to sectors.  But one of them must be rising profits. Profits now take a bigger slice of the price of goods and services in the domestic sector than wages.  In the economic sectors dominated by domestic-owned enterprises in 2021: Total profits (gross operating surplus) made up €97.4 billion Total employee compensation made up €92.3 billion This is unusual.  In modern econom ..read more

The President, Michael D. Higgins, has upset some economists.  According to a front-page Business Post article entitled ‘Economists round on President over ‘lazy’ and ‘uniformed spiel’:  “Economists have rounded on President Michael D. Higgins and claimed comments made about their profession are ‘lazy’, ‘outdated’, ‘uninformed’ and ‘incomprehensible’. Of course, it was only some economists who made these comments (I spoke to other economists who gave a thumbs-up to the Presidents’ comments).  So what upset people so?  One was the issue of growth.  The President said ..read more

With inflation rising unexpectedly in February (and at one of the fastest monthly rates since the beginning of the crisis) the question being increasingly asked is:  are profits driving inflation?  And the evidence increasingly suggests yes. It’s certainly not wages.  The IMF’s historical study of the relationship between wages and prices (79 periods of rising inflation, including Ireland’s experience in the 1970s) found almost no evidence of a wage-price spiral – an alleged phenomenon used to justify rising interest rates and wage ‘moderation’ (i.e. real wage cuts). ‘Wage-pric ..read more

‘Facts are meaningless.  You can use facts to prove anything that’s remotely true.  Facts schmacts.’ (Homer Simpson) Fact:  private rental accommodation supply is falling.  Between 2016 and 2021, the number of private tenancy registrations fell by 44,000, or 14 percent.  However, this fact doesn’t tell us why supply is falling.  Is it falling because the number of landlords leaving the market is accelerating?  Or is the number leaving remaining steady, its' just that new entrants are not keeping pace?  Is there data on churn? Is it falling because of t ..read more

It is two years to the next election.  What are the potential alternatives to the current coalition?  What are the chances of the first government led by some other party other than Fianna Fail or Fine Gael?  What are the possibilities for a progressive breakthrough?  This will be the first election where there is a realistic prospect that neither Fianna Fail nor Fine Gael will lead the government.  With the help of a great website – Ireland Political Indicator, maintained by Tom Louwerse and Stefan Müller. - we can chart governmental possibilities using opinion poll s ..read more

Everyone should be guaranteed a minimum amount of energy, either free or at below-market rates.  This is the principle behind ‘Universal Basic Energy’.  By redistributing costs from lower to higher income groups It has the potential to significantly reduce fuel poverty while incentivising energy efficient investment among groups who can afford it. The Government, having resisted price controls to date, appear to be curious.  The Business Post reports: ‘The Government has tasked the Economic and Social Research Institute with modelling possible price guarantees which, in theory ..read more