Monthly Archives: April 2013

An open letter (to Minister Hogan and the Kildare County Manager) on the Local Property Tax

Dear Minister Hogan

So, I have paid my local property tax. I belive as I have said on numerous times that some form of tax on real property is a good economic idea. I have severe concerns about how this particular property tax is implemented but I guess it’s a start.

What I wonder however is this : it is billed as being for local authorities (which I think you are rationalizing anyhow so we might see a reduction….?) but I am unsure what, exactly, I get from Kildare County Council.

On their website they have a number of departments, which I guess correspond mostly to the activities they undertake. Let me go through them…

  • Community : this seems to be about festivals and apparently we have joint policing committees. The latter are of course powerless. It also seems to cover the county development board. I wonder if that is really something that Enterprise Ireland or IDA could not do just as well? Im willing to chip in here for the festivals and the social good that they do. It also seems to cover Comhairle Na nOg, but the last activity on their forum seems to be in 2008…..
  • Corporate Services : well this is management and if we can cut down the activities we do we will, I imagine , need less. So lets treat and all other management services as  as a residual.
  • Civil Defense : I guess some backup to the emergency services is a good idea. However since January this year this has now gone to the department of Defence so as my general taxes pay for the army and police (and well spent they are)  im not sure what part of my monies go to this?
  • Economic Development : this department seems to consist of a link to the county development plan. I suspect that that lives under corporate services?
  • Environment : this is the kind of thing we think of when we think of the council. However, I pay a large sum of money each year to AES for my bins; the litter situation in the main towns is so-so, and there is a marked increase in casual dumping. If I want to use the Sillot Hill recycling site I pay for that.  Commercial waste etc I would imagine should be served from commercial rates. I guess the derelict sites section could be useful given the large number of brownfield and related sites now not being built on. I have filled in the nice form…
  • Finance : a management service
  • Fire Services : an undoubted public good but…I already would pay for the service were  I unfortunate enough to have to use it. Im happy to pay towards a decent fire service (mind you id be much happier to pay for a service that was organized and managed on a national basis not a hodgepodge of individual authorities, one that had more Indians and less Chiefs…).
  • Heritage : again a social good and worth supporting.
  • Housing : social housing is a public good and im happy to pay
  • Human Resources : a management service
  • Information Technology : a management service
  • Leisure : this seems to be about allotments, and playgrounds and some public pools etc. Again, these are public goods. Again, Sallins seems to have none of the above. A playground would be nice to go with the pubs, bookies shops and brownfield sites we have in abundance…
  • Library & Arts : again an undoubted public good and one that I would be happy to support. Mind you, a library in Sallins would be nice…
  • Motor Tax : a collection service for the state
  • N.R.D.O. : apparently this is the national roads design office. Im not sure if it deals with the NRA on local issues or what but in any case the issues mentioned seem to have all been done. Im sure we are not still paying for staff to monitor the Osberstown interchange or the N7 upgrades?
  • Planning : well…what can I say. Sallins and environs is a microcosm of the catastrophic unplanned and fragmented planning “service”. A leisure facility given planning permission for a massive development now mostly unoccupied (supervalu and Dominos apart); the same so badly designed it flooded in an apocalyptic manner; meanwhile an existing site 200m away in the center of the village with the same permission lies derelict for 20 years; a massive tesco bang on the outskirts of Naas causing traffic chaos at an inadequate roundabout; a county town with a white elephant unfinished shopping center the size of Whitewater built in the main car park while the town itself withers as traffic wardening is enforced with sadistic zeal and people go to the aforementioned Tesco ; one could go on an on and on . And you want me to pay for this? Riiiiggght…
  • Procurement : a management service
  • Roads and Transportation : I already pay road tax and the county has the highest proportion of NRA roads in the country.  non national roads need management and this costs but when one looks at the cratered surface of say the Sallins to Clane or the Clane to Kilcock road one despairs. I shudder to think how bad the roads are going to be in a few years…
  • Water Services : we will be paying for these separately anyhow from next year or the year after so id like to see the rationale for dual charging for this?

So overall its hard for me to see the immediate benefit of the council.  Where there are some services that are or will be charged for it would be nice to see the extent to which these are charged to cover private benefit (my house not burning down) versus public good sharing (my house not burning down rendering me homeless and the fire spreading). Where  there are public goods these should be paid from general taxation. If this charge is part of general taxation (which of course it is) then why not simply call it so? If we want to divert some proportion of general tax to local authorities to spend on local provision of public goods, there are much simpler methods to do so.

I look forward to your response.

Property prices in Ireland pre and post transparency

In September 2012 the Irish Government finally published a reasonably comprehensive register of residential home sales. We now have 6 m data on property prices after this. While this chart here, which shows the cumulative 6m change pre and post publication is grossly unscientific, there does seem to be some effect. This cant be all down to the local propert tax as this was well flagged for some time. Would be worth a proper examination…

The richies are different….

So Richie Boucher, the CEO of Bank of Ireland, is on a salary and benefits package of over 800k.  The BoI AGM is on today, and the Irish taxpayer owns 15% of BoI.   The minister for finance has declined to vote to reduce this package (and that of the part time chairman…). At the same time the other minister for finance Brendan Howlin, has more or less decided to ignore the vote of public sector and will (despite having said he will get the labour relations commission to investigate how to ) impose or assume the pay cuts voted down.

This softly softly approach to Bank of Ireland contrasts massively with the hectoring bullying approach being taken to the public sector. While BoI has done ok over the last year and  Boucher’s tenure it is up the reality is it is still in the intensive care ward. If it finds itself needing billions more it wont go to the markets but to us. So, what applies to me should apply to Richie. But, it wont. So, why is it ok to treat Richie different? Are the richies that different

Screen Shot 2013-04-24 at 08.58.48

Structure of Irish Government Finances 1995-2012 in Pictures

The government finances are something that always seems to baffle people. The CSO and Eurostat provide great detail but it can be hard to navigate. Below see some charts that I have extracted from these.  The raw data (in summarized form) are also below.

Total Irish government revenue and expenditure, in 000m. Note the reasonably broad balance over time and then the effect of the banking crisis...

Total Irish government revenue and expenditure, in 000m. Note the reasonably broad balance over time and then the effect of the banking crisis…

Breakdown of main spending headings of Irish government
Breakdown of main spending headings of Irish government

Main revenue headings as % total revenue. Yes, capital taxes are that small.....

Main revenue headings as % total revenue. Yes, capital taxes are that small…..

Are we really that highly taxed? Direct and Indirect taxes as % GxP

Are we really that highly taxed? Direct and Indirect taxes as % GxP

The interest burden on the state finances is going the wrong way...

The interest burden on the state finances is going the wrong way…

Public Sector wages (pensions are included in social section) are <30% total spending

Public Sector wages (pensions are included in social section) are <30% total spending

Total social expenditure (social welfare, state and PS pensions etc) now accounts for 50% total state revenue… See how that shot up when the recession hit?

Here are the data if you want to play round some more

Screen shot 2013-04-23 at 09.45.31

Screen shot 2013-04-23 at 09.45.36Screen shot 2013-04-23 at 09.45.41

Good news is no news for Irish universities it seems

This week was a busy one for news, what with the ongoing Boston marathon manhunt, the CP2 disagreement etc. But, in the university area at least one good news story was broken. The Leiden rankings (yes, yes, rankings, we know…) emerged and TCD (and to a lesser extent UCD and UCC ) did well indeed. In fact, TCD was ranked in the top 50 universities in terms of its research impact, worldwide. the Leiden rankings are one of the few that are objective in total, simply measuring research impact under a variety of methods. While this has advantages and disadvantages, its clean.

The CWTS Leiden Ranking 2013 measures the scientific performance of 500 major universities worldwide. Using a sophisticated set of bibliometric indicators, the ranking aims to provide highly accurate measurements of the scientific impact of universities and of universities’ involvement in scientific collaboration. The CWTS Leiden Ranking 2013 is based on Web of Science indexed publications from the period 2008–2011.

When we think of it thats quite astonishing. How many private companies in Ireland would be ranked in the top 50 worldwide? Indeed, given that there are about 18000 universities worldwide, how many Irish institutions public, or private in any area of activity are ranked in the top half of a percent? So, one might imagine that this was noted? Right…?

Wrong.  I cant find a single report on it (using Lexis-Nexis) in any Irish publication. Not a word. Compare this to the annual orgy of blame and breast beating when Irish universities dont get into the THES world top 100, or the Shanghai rankings, both tremendous but in large part subjective measures. More baffling is that theres no press release or communication on TCD’s website celebrating this.

Subjective bad news > objective good news it seems. Its almost like there was some sort of agenda about Irish higher education….



Lets have less degrees, but better ones, from Universities.

The recent proposals to government regarding the changes in university entrance procedures are to be welcomed but do not go far enough.

The proposals in essence suggest that there be a shift away from the proliferation of courses with small numbers of available spaces, and towards a smaller number of more generalist courses. The objective is to reduce the points pressure, which, it is alleged is driven in part by these courses. This is of course a mere reflection of  the fact that the points system is a pricing mechanism, and if there is reduced supply (small numbers of places) then the price (points) will rise. Combined with the secular increase in numbers going to third level and the desire by government over the years to increase the participation ration and the result has been to increasingly fragment and make more costly (points wise) college entry. This has not been helped of course by the shifting of monies by middle and upper class parents from college fees to grinds – the removal of college fees (now being stealthily reintroduced) has has little if any impact on participation ratios by lower socioeconomic classes.

The proposals therefore in so far as they reduce the pressure at school leavers are welcome. We might consider however if the logic of these proposals is fully thought through.

First, the effect of this is going to be to make the first year of college even more stressful for students. The pressure to enter into the specialized course of choice will shift from leaving cert to college. With concerns already vocal about dropout rates, especially at IoT and lower point university courses, expect to see much greater pressure for grade inflation, more educationally dubious cross module compensation processes and frankly a more litigious university environment. Without reform of the leaving cert, to promote a greater sense of critical thinking and a more holistic student better able to thrive at third level, this issue is doing what we excel at, kicking the can down the road.

Second, there is a logical follow-on from the increase in generalist courses combined with the goernment desire to retain free fees. The logic of funding university education is that a more educated population is one that is both socially and economically richer.  The nature of a university, as opposed to a corporate training center, is that it provides broad (universal) skills to the broad (universal) population. Universities are good at providing public good education : we see a lot of private third level colleges opening offering “book rich” degrees in Law and Business and so forth, but none that I am aware of offering the intensive capital heavy low immediate payoff science and engineering courses that the government actually want. At present there is a dreary commercialism creeping into the discourse, with the only thing that appears to be valued being the linkage of activities with (perceived or even articulated short term ) corporate need. This of course ignores the fact that corporates often change their needs and needs are often confused with desires. It also ignores the element of societal good, represents a subsidy from the non corporate sector to the corporate sector, and leaves universities open to the rapidly changing whims of the market. The university is one of the great inventions of mankind and the great universities did not become great by pandering to every half articulated whim oe whinge related to the then immediate needs of business. To be effective universities need to go back to what they are good at – universal transferable skill provision, such as the ability to think clearly, argue persuasively, critique and be critiqued and to take a body of knowledge and form judgments on same. And this is exactly what industry want, by the way. Industry groups and guilds run professional training and certification.

In the area I am most familiar with the Chartered Financial Analysts run a suite of, in effect, degrees. The requirements for these change regularly in response to industry needs. The CFA also liase very closely with universities without dictating –  A set of broad skills and some specific skills are identified and universities are encouraged to incorporate those. In other words all sides benefit – universities get close linkages to industry, industry gets to work with universities, and students get to know they have skills which are basic to an industry. But to gain a CFA they still have to pass three difficult exams and work in the area. We should leave professional industry certification and the accompanying skills to those that are best suited – the industry. The logical end is twofold. First, we move to graduate level those courses that are professional and certified, such as engineering, medical, business, legal etc. Second, we move to an undergraduate programme which is broad at all times. We could consider life science, natural science, math and engineering, arts-humanities-social science as the main blocks of human knowledge.

Lets have 4 degrees at undergraduate level – not 400. Lets require that all students take at least 25% of their degree outside their area, from all other areas, and to take broad competence within. Thus a student taking a BA in AHSS would have to take business, language, history etc, as well as courses in biology, in physics, in computer science etc.  Lets mandate critical thinking, IT, communications skills, teamwork and other “soft skills” as grafuate requirements. And lets allow graduate schools to dictate the required core skills to enter there and the fees required to do so.  This would be a truly radical transformation of the Irish third level and one that would truly justify free fees.