Ireland’s Elephants

We need to talk about elephants. White, in the room,  dancing It doesn’t matter , elephants are where it is at. However, rather than ascertaining how to manage, evade and if needed cull same, our government, which resembles an elephants graveyard of hope, is goading and ignoring.

Lets look at the elephant in the room, the room being that place wherein the ICTU Public Sector unions meet to plot . Its quite a large one, but the ICTU are happy to ignore it. It’s the fact that we are, as a nation, only barely breaking even on our current budget. Ignore those that say we are still borrowing “to keep the nurses and gardai paid”. We aren’t. What we are borrowing for is capital spending, which is both prudent (at low interest rates especially) and needed. But the economy and the world economy is fragile, very much so.  A demand for full restoration of what was unsustainable in boom times is resolute ignoring of the economic reality of the state. Yes, we can and should take in more tax from a variety of places, but right now we are in that place, where we are.

Of course, wilfully blind to the elephant as ICTU may be, down across the liffey in the employers trade union,  IBEC, they also carefully tiptoe around an elephant.  Its in fact the twin of the union and represents that we as a state are not the uniquely heavily taxed nation we , and IBEC in particular, make ourselves out to be. A large part of the tax gap versus our EU partners is in employers PRSI, employers social security contributions.  The average marginal rate of employers PRSI across all levels is 8.5%, less than 1/3 that in Belgium and

While the ICTU elephant is  a bearded one,  and the IBEC pinstriped, whole herds of white elephants graze unmolested instead of being subjected to a ruthless cull.  A classic example is the set of branch, marginal railway lines identified in the recent report. There is romanticism about rail.  That is undeniable. But the realit is that for decades and decades we have as a nation poured monies not into railways but into road. Whether that was sensible or not is  now beyond the point. When we have a situation where on an operating basis it costs hundreds of euro of subsidy per journey for a branch line, we have to ask if that is sensible (no…).   A better approach would be to convert the branch lines into greenways and take advantage of walking/cycling ecotourism. Then we have the elephant’s graveyard of Irish economic prosperity, the housing market, where the government seems intent on listening carefully to expert opinion, then doing the exact opposite.  We have not so much segued as sashayed from one housing crisis to the next almost without pause.

Perhaps the most dangerous elephants of all are the trio dancing around each other – the USA, the UK and the EU.  Post Brexit and Trump, the chances of deeper global trade are slim.  Ireland has profited hugely from the globalisation of trade and finance which the last few decades have brought. But this was very much of its time and its time has passed. What we have done is neglected yet another elephant in the room – the lack of a sustainable, export capable,  cadre of domestic owned middle sized (in global terms) firms.  Mesmerised by the FDI riches we have neglected to invest in growing our own. Now, as the EU and the UK face into a who-knows-what of Brexit, as the USA takes a turn for the protectionist  and isolationist, our major trading parters are squaring up for a series of more bruising encounters than we have seen since the 1930s. When the elephants dance the ants get trampled , and we are , for the UK/US/EU, those little people far away who look like ants.

Its elephants all the way and we are both their keepers and their potential victims.


Irish Examiner column 28/11/16