Category: TIME CAPSULE

FOUR DECADES IN EUROPE

Politically 2013 promises to be another tough year. Not only does the economic situation present challenges, which could well torpedo the Coalition by year’s end, but on another front there is little doubt that Abortion will be the political issue for 2013 in Ireland.

In the wake of the Halappanavar tragedy the government has announced its intention to legislate to fill the gap following the Supreme Court decision in the X case twenty years ago. The first public hearings took place in early January. The battle lines are being drawn. The Church and the pro-life lobby have already set out their stall. At least one expert witness has pointed out that it would be a very different debate were Britain, where abortion is legal, not so close. Could another emotive and divisive referendum be on the cards?

As if that were not enough, for the first half of 2013 Ireland has the six month Presidency of the EU. While arguably this will provide Ministers with some easy and positive publicity and afford a welcome relief from the unremitting pressure of the economic situation, it is also a distraction with Ireland tasked with advancing some serious, if not critical, issues for Europe. These include trying to get agreement on the EU financial framework (i.e. budget) for the coming eight years .

This year also marks the fortieth anniversary of Ireland’s membership of the EU. Those decades merit a closer look for they have seen Ireland altered dramatically and irreversibly . It’s a very different Ireland now compared to 1973. The battered Ireland that joined the EC, as it then was, was a poorer, shabbier place than the vibrant and assertive country of today, current economic problems notwithstanding . There are many faults with the EU but overall, membership, and the partial pooling of sovereignty that went with it, have been of enormous benefit.

There was, of course, Europe’s money. Up to 1973 Ireland was overwhelmingly dependent on Britain as a trading partner, which included trying to sell our agricultural products into a country which pursued a cheap food policy. Access to the Common Agricultural Policy (the CAP) changed this. We now had a particularly heavy hitter batting for us – France – and Ireland’s agriculture and by extension, the economy, benefitted.

Then, beginning around 1980, a different flow of funds into the country began in the form of funding from the centre to the less prosperous regions. Historians of the future may well mark this development as the point when the EU began to evolve from merely a trading bloc to a future European super state.

This process culminated for Ireland in the political and economic bonanza of the early 90s which saw Ireland securing roughly $ ten billion for infrastructural development. Hence our roads and other improvements. Hence also the freeing up of revenues which were spent raising welfare and other benefits.

The EU itself underwent a sea change in the early nineties. German reunification generated politically a new emphasis on expansion of contacts in Central and Eastern Europe which led to the opening later of accession negotiations with a dozen prospective member states. Internally the creation of the Single European Market in1992 led to the removal of many internal barriers to the free movement of goods capital and labour between the member states.

The new Europe, now the Union, was acquiring the attributes of a supranational state. For Ireland, now riding the back of the Celtic Tiger, the Single Market generated new opportunities for trade, and investment poured in. For the first time Ireland had full employment, married women were coaxed into the labour market as never before and yet still there were labour shortages. Ireland began to experience immigration for the first time in centuries.

May 1st 2004, during Ireland’s last EU Presidency, saw the expansion of the EU from fifteen to twenty five countries. It was rightly regarded as a watershed date in modern European history and as ringing down the final curtain on the Second World War and the Cold War which followed. Eight of the new members were former Soviet satellites, most occupied by the Red Army for decades after 1945. Two more former satellites joined in 1997.

It was against the background of domestic labour shortages that the Government took the otherwise curious decision to permit immediate freedom of access to the Irish labour market to workers from the new Member States. The Accession Treaties provided for limits or restrictions on the movement of labour from the Accession States for up to seven years. This to allay fears among the fifteen at the prospect of unfettered access to the labour market for the new entrants.

Twelve of the fifteen states introduced restrictions for up to seven years. The three countries which did not were Britain, Ireland and Sweden. Sweden got relatively few immigrants. Britain and Ireland, which form a common travel area, got far more. Britain got roughly one million, relatively easily absorbed in a population of 60 million. Ireland received at least quarter of a million, not so easily absorbed in a population of just over four million. Factor in immigration from elsewhere and the last census showed a population of over four and a half million, with 12% non-nationals. We’re far from becoming a nation of immigrants but Ireland has certainly changed, changed utterly.

The immigrants came to work, for jobs were plentiful. The net result was to swell the Irish labour force by several hundred thousand, many working in the construction boom. The national hangover, now that the bubble is well and truly burst, has led to an unemployment level of around 14.6%, a staggering total of 430,000 odd signing on the live register, almost 10% of the total population. More worryingly, one in five Irish households includes an unemployed adult, the highest among 31 European countries. And without emigration, which has returned with a vengeance in the last two years the figures would be even worse.

The building boom was fuelled by a number of factors but none more so than another aspect of our EU membership, the availability of cheap credit obtained through Irish membership of the Eurozone. Ireland embraced the Euro from its inception. The attraction –lower interest rates – seems to have blinded those in power to the potential pitfalls as well as ignoring the fact that most of our trade was with non -Eurozone countries. Hubris? We’ve certainly paid for that one.

It would take several columns to do justice to the many positives we have derived from EU membership, particularly in the areas of equality, women’s rights and social reform. Quite often it has been the push or the prod from Brussels or the rulings of the European Court which has obliged reluctant Irish legislators to act.

But above and beyond all this, EU membership has helped Ireland mature as a country and a society. Before 1973 much of our identity was defined in terms of our relationship with Britain. EU membership has changed this, provided a new dimension. We may not be at the heart of Europe, whatever Irish politicians may claim, but Europe is at the heart of us.

“UNPICKING THE SPENDTHRIFT YEARS”

It’s an open question now how long the Irish government will last. That Ministers want to stay on is very clear. One of the axioms of Irish politics is that one day in government is worth a lifetime in opposition. The current coalition would echo this sentiment. However, after less than two years the cracks are becoming fissures. 2013 may not be make but it could be break.

With all the low fruit lopped off, December’s budget was always going to be difficult, particularly for Labour, the junior partner. The Programme for Government, hastily cobbled together after the election, gave significant incomprehensible economic hostages to fortune. These included the so-called triple lock of no welfare cuts, no cuts in public sector pay and pensions and no increases in income tax.
This at a time when Ireland, unable to borrow money from elsewhere to run the country, was in thrall to the IMF and the European Central Bank for loans to pay wages and welfare benefits. The quid pro quo was an austerity programme designed to reduce the country’s borrowing requirement to an acceptable level (I.e. one that potential future lenders would accept) over a number of years by annual cuts in expenditure and/or hikes in, and new, taxes.

This also in the light of some of the legacies of the Spendthrift Years, which had seen welfare rates and public sector pay levels hiked well above inflation, while income taxes were cut and large numbers exempted totally from paying any income tax. Underpinned by this largesse also was the evolution of a culture of entitlement and a failure to grasp that taxes are necessary to sustain a country and pay for benefits.

The Coalition, since coming into office, has twisted and turned, impaled uncomfortably on its self-constructed petard, and meanwhile borrowing about $1.5 billion each month just to keep going.

Something had to give, and in December’s Budget it did. On the positive side, though not welcomed by those who will have to pay it, a tough property tax was introduced, with, crucially, very few exemptions. Those who cannot pay will have the amounts owing tacked on as a future charge on their estate. Whether this drastic approach will ever be carried through, or survive some type of legal challenge, remains to be seen. But the proposal undercut the various lobby groups queuing up to demand exemptions. The introduction of the tax, by broadening the tax base, will dismantle the last of lunacies with which Fianna Fail bought the election in 1977.

On the welfare side the triple lock was finally broken with cuts, inter alia, in child benefit and the removal of a social insurance (PRSI) part exemption; this last is likely to produce howls of anger when people examine their pay packets in the New Year. The howls up to now have come over the cuts in child benefit and a separate 20% cut in the respite grant for carers, bringing it below $2000 annually. The carers’ cut saw wheelchair protests outside the Dail and a protest vote against by the Labour Party chairman, Colm Keaveney.

The cut in child benefit, including larger cuts for larger families, still leaves the basic rate at €130 (roughly$160) per month, and the benefit remains completely non means-tested or taxed. The benefit is paid equally to the child of a millionaire and to someone living in poverty. As long as this remains the case the benefit is fair game for further attention. Part of the emotional argument in favour of the status quo is that it is the only money the state pays to mothers, including those from the coping (and paying) middle classes. But with the state broke and one third of the benefit borrowed, increasing the country’s debt by the month, some realism is needed. An obvious solution would be to pay the benefit under deduction of tax at the standard rate, with those on the lowest incomes getting a top-up; while satisfying nobody, this at least would ensure that everybody got something and would remove future uncertainty.

As I write, Labour is in internal disarray and is taking a hammering in the polls, accused of breaking election promises. Labour Senators may even vote to delay the cuts. In vain have Labour’s leaders pointed out that the promises made were contingent on Labour forming the government, rather than becoming very much the junior party in the coalition. The notion of hanging together rather than separately appears now very much the glue holding Labour together and continuing in government. As 2013 advances, and as the real pain of the budget measures takes hold, the pressures within and without the party look set to increase.

For Fine Gael also, 2013 will bring problems, and not just those arising from the budget. For a very personal family tragedy in November has thrust the abortion debate into centre stage. When the furore over the budget has died down, the abortion issue is likely to dominate the political agenda during the first part of 2013.

In 1983 a pro-life amendment, acknowledging the right to life of the unborn “ with due regard to the equal right to life of the mother” was introduced into the constitution. Not surprisingly this wording was found to be unsatisfactory and vague and a succession of court cases and a number of further constitutional referendums have followed without altering materially the very limited conditions under which theoretically an abortion could be carried out .

Past debate has centered on what would constitute a sufficient threat to the life of a mother to justify a termination. An attempt in 2002 to strengthen the ban by preventing the risk of suicide being invoked as grounds for an abortion was only defeated by a miniscule 10,500 votes or 0.8% of those voting.

The Irish judiciary have criticised politicians for failing to enact legislation to give effect to Supreme Court rulings and a European Court ruling last summer increased pressure on the government. The matter was approached warily by Fine Gael which was and is known to be divided on the issue ; early action did not seem likely.

However, all this changed with revelations concerning the death of a young Indian dentist, Savita Halappanavar, on 28 October in Galway University Hospital. The case has received worldwide publicity. Mrs Halappanavar was 17 weeks pregnant when she began to miscarry. She is understood to have requested a termination which was refused and the miscarriage lasted three days. She died several days later. Enquiries are on-going, though not the public one demanded by her husband.

A wave of sympathy for the Halappanavars swept the country, with demands for early clarifying legislation. The argument is that, had there been no 1983 amendment, or had legislation been enacted over the last 20 years, clarifying threats to the mother’s health and life, this tragedy could have been avoided. The pro-lifers were put very much on the back foot. However, recent weeks have seen them rally. Voices are now urging “Festina lente.” 2013 promises to see yet another heated and emotional debate and the timing could be crucial. Hopefully there will be closure this time.”

BANKERS’ PAY PERFORMANCE AND PENSIONS

With yet another savage budget pending in early December there has been public indignation over recent revelations concerning the pay and pensions of Irish bankers and the initial hand wringing of the government on the issue. Hints have been dropped that the budget might contain something about bank pensions. The hard pressed ordinary taxpayer, facing further draconian taxes next year, will be watching closely.

This issue has the potential to upset the coalition in earnest and the government should handle it with great care. The public has been stoical thus far in the face of continued austerity, with most accepting that the fiscal gap has to be bridged, but the bankers have touched a raw nerve, exacerbated by separate disturbing reports of cuts in front line services such as home help.

Bankers already occupy a special place in the public’s demonology. Not only did they collectively wreck the economy, but the cost of bailing them out, $75 billion plus, has made our bad fiscal debt even worse. Anglo Irish Bank was fully nationalised, Allied Irish Bank is 98% funded by the state and most of the others have been taken into state care, with only Bank of Ireland off life support.

So the newspaper revelations last month that 76 bank officials were being paid over $350,000 in basic salaries, with 1700 bankers earning over $125,000, almost three times the current average Irish salary of $ 46,200, caused outrage. This was compounded by the discovery that a new executive at the IBRC (Anglo reconstituted) was on a package of $600,000 plus (sanctioned by the Irish Minister for Finance), one of 19 in the IBRC (most decidedly OUR bank) getting $350,000 plus. This in a state owned bank, in a broke country where only 10% have incomes over $125,000 and where the state pension is $15,000 a year for a single person.

There is worse. It has emerged that Allied Irish Banks, 98% funded by the state, channelled around $1.3 billion from its recapitalisation funds (taxpayers’ dollars) to plug the deficit in its pension fund. In response to some of the criticism, AIB bosses also confirmed that letters had been sent to some of their former senior executives asking them to return voluntarily portions of their pensions (In some cases $500,000 annually), with just one agreeing to reduce his annual pension to around $300,000. The IBRC, as it happens, has a pension fund fully funded (to 111%), one of the very few “defined benefit” pension funds in the country without a huge hole in it.

The banks have brazenly defended the mega-salaries as the going rate for the job, the suggestion being the recipients are worth it. Park for a moment the observation that banking is not rocket science and at the top hardly merits even half the amounts being paid. Park also the thought that , whatever justification there was for the banks in their former existence to reward their head honchos so handsomely, when they could screw their clients with abandon, they are now almost all totally dependent on the state. The bankers’ claim begs the question, in respect of the former and retired bankers who have walked off since 2008 with large pay-offs and huge pensions, whether these payments were deserved, given the unholy mess they created.

The banks’ recent performances merit at best the description of uncivil servants. Business credit has all but dried up. The banks’ strategy appears to be to hunker down until better times arrive. The financial regulator is not helping by the very strict regulatory regime now in force, but he can hardly be blamed for carrying out his job. The problem is that the justification for bailing them out then and keeping them on life support now was and is that the economy needed (needs) a functioning banking system. What the public sees is definitely not this -just the old system Mark II with very little changed and certainly not helping the economy.

To date the banks have gone softly on the mortgage crisis, with only a handful of repossessions/evictions. This is not altruism. The banks are coldly aware that to wield the big stick by pressing for repossessions, or forcing thousands of bankruptcies at present, would be a bridge too far and would galvanise the government into radical action. So, like Mickawber, they wait for something to turn up. There is no talk of debt forgiveness, with the banks, incredibly, bleating “moral hazard” (!). The new legislation to update Ireland’s antiquated bankruptcy laws will still leave the banks holding most of the aces and observers expect that they will use the new legislation when passed to justify getting tough with debtors – something to be watched.

The Government’s reaction on bankers’ pay was initially to plead impotence on the grounds that bankers’ severance packages were contracts entered into under the previous government and it was powerless to change them. (It is interesting that this line is somewhat similar to that taken regarding the Croke Park Agreement, though Croke Park has a get-out-of-jail clause – not yet invoked.) When challenged, there were vague references to the Constitution and the suggestion that any attempt to renegotiate would risk a legal challenge. There were similar reservations in the 90s expressed about the Criminal Assets Bureau legislation , which however was found to be constitutional; this might provide inspiration. Such has been the public furore, that, as I write, the Government has shifted tack and is now admitting that the issue will be addressed.

Critics argue that the Government is afraid to go after the bankers’ pensions lest it open a Pandora’s Box out of which anything and everything could be challenged, not least the pay, pensions and benefits enjoyed by the politicians, and Ministers in particular. Taoiseach Enda Kenny earns more than the British Prime Minister, as, indeed, do the rest of the Cabinet. The levels of additional ministerial benefits are also generous and have come under recent media scrutiny, while the separate pension arrangements for all politicians are regarded, somewhat unfairly, as second only to the bankers.

The options boil down either to introducing a surtax or levy on bankers and other pensions above a certain figure, or holding a referendum to amend the constitution. The argument against introducing a surtax is that , if it were not to be deemed discriminatory, it would have to apply to all pensions above a certain figure, with all that that would imply. However, the Irish income tax code is a comprehensive one, replete with exemptions and exceptions and it should surely be possible to draft legislation in such a way that the practical application would be to reach those for whom it was intended.

The precedent for holding a referendum is the one held last year to permit reductions in judges’ pay (constitutionally protected) following the refusal of a minority of the judiciary to agree to a voluntary pay cut. Not surprisingly the referendum was carried four to one. There is little doubt that one on bankers’ pensions – maybe even their pay – would be carried similarly, the trick being to find the appropriate wording; and there’s the rub.

The budget speech will be interesting.

“FOUR LEGS GOOD, TWO LEGS BETTER”

The last few weeks could turn out to be the watershed for this government. Some events or trends have happened or crystallised lately that taken together have changed the way the public perceives the government. Increasingly the question being asked is how it differs from its predecessor. The words of Sean Lemass, asked to define the difference between Fianna Fail and Fine Gael, are being recalled: “We’re in and they’re out!”

The government has now been in office for over eighteen months, roughly one third of its allotted span, its goodwill has been exhausted and it is being judged on its performance record above and beyond the mess it inherited.

On several issues that performance has been found wanting, most recently over allowances paid in the public sector. These (over 1000) cost almost $2 billion annually, and with considerable fanfare the government had undertaken to trim them after review by roughly $100 million (5%). The counter -argument has been that many of these allowances had been introduced over time for very good reasons in lieu of core pay and had morphed, over time, into part of core pay.

Few could have foreseen that the outcome of the review would be to cut immediately just one (!) allowance, to yield annual savings of $5 million. Some others are to be negotiated. The official line, that the government had decided to bite the bullet rather than risk industrial unrest in the public sector over a mere $100 million has been greeted with public derision. Moreover the issue is widely seen in the context of the continued generous allowances paid to politicians of every hue.

This has been compounded by the media revelation that politicians of all parties continue to employ family members as special assistants of one form or another, some at salaries up to $ 50,000, with at least 15 employed by government TDs and senators. One government politician, who employs his wife, argued that he regarded her as his closest political confidante. And there lies the rub. Why should a politician not employ the person he/she most trusts as his assistant? As a left wing independent, employing her partner, asked should a political novice, or opponent, be favoured over a like-minded confidant? While there is evident public dissatisfaction at this state of affairs, the current crop of politicians seem loath to change matters.

Throw in the feeble handling of the Household Charge and septic tank issues, Ministerial hand wringing over recent increases in energy, utility and mortgage costs, the slow rate of closure of superfluous quangos and the homage accorded to the Croke Park Agreement (negotiated by the last lot and regarded as akin to holy writ) and the impression emerging is that there has been no “new politics” and the only evident change the faces of those at the top.

A recent very public spat between Health Ministers has not helped. Roisin Shorthall, the combative (Labour) junior Minister, resigned office and the party whip after her boss, Minister James Reilly, added no less than 15 extra candidate sites for primary health care centres to the original list of 20 drawn up by Shorthall on the basis of a deprivation index. Two of the extra 15 were located in the Minister’s constituency; others were well down the index. Reilly rejected charges of “stroke politics” and pointed out inter alia that, as Minister, he took the final decision. Shorthall received no support from Labour cabinet ministers. She may well have been on thin ice in any event for her gung ho stance on increasing prices for cigarettes and alcohol on health grounds. She now has the luxury of being able to vote against unpopular measures in the forthcoming Budget.

The reality, of course, is that the perilous state of the economy has virtually eliminated the government’s freedom of movement, and that will remain the position until the annual books are balanced and we live within our means. All election promises are on hold. Any measure of relief from Europe on bank debt will not affect this. Indeed the anxious Irish eyes are now focussing on the worrying forecasts for future international economic growth. The rescue plan of 2010 was predicated on growth figures that now appear unattainable, with every prospect that the fiscal adjustment will have to be larger and last longer than was forecast.

This is simply not the time to dredge up and take a stand on ideological principles. The government is determined to soldier on, hence the jettisoning of Shorthall by her party colleagues. There are likely to be further defections from Labour at least, come December, and probably from Fine Gael on some local, rural issues. Labour cannot afford to jump ship; it has slipped markedly in the polls, with Sinn Fein in particular biting at its heels.

Support for Fine Gael has remained fairly steady, indicating that the middle class support which had stuck with Fianna Fail through every scandal until 2011 remains faithful to its new favourite. This is hardly surprising; after all, currently it has nowhere else to go. Certainly not to the left, which shouts for a raft of extra taxes “on the rich”, uneasily undefined, above and beyond even what is coming. Certainly not back to Fianna Fail, which remains on life support, unable to shake the monkey of decades of scandal, cronyism and economic mismanagement. Some commentators across the political spectrum are already suggesting that, provided not too many noses are put out of joint, Fine Gael could remain the largest party for a long time.

This assessment may prove premature. However stoical the middle class, the immensity of shaping December’s budget is also penetrating. The required economies of around $4.5 billion – to be achieved in a 2:1 ratio of spending cuts and increased taxes – are daunting. Can spending be cut by $3 billion while leaving social welfare payments and public sector pay and pensions unaltered? And even if there are cuts of $6.50 per week in unemployment benefit, child benefit and the old age pension, the combined savings would amount to less than $300 million. Bullying civil servants into a 10% cut in salaries and pensions (the wider public service, police, nurses, teachers, looks too tough a nut to crack this year) would yield a further $200 million. Freezing increments maybe $ 300 million. Still over $2 billion short.

New taxes are promised. A property tax from July next. Could the middle classes, and specifically the urban ones, sustain any more than a levy to yield $400 million given that, in the Irish way, there will be categories exempted? Or income tax hikes to yield $250 million? Cigarettes? Already the highest taxed in Europe, with 90 million smuggled cigarettes seized to date in 2012. Alcohol? Already highly taxed, and with an open border to Northern Ireland. Medical charges? For those who pay, in a country where medical cards (akin to gold dust) are distributed unevenly across the country. A VAT hike? More levies?

The gap remaining is huge. Who’d be a Finance Minister, framing the budget? Who’d be a middle class urban dweller, paying for it? Noses out of joint?”

“RUNNING OUT OF WIGGLE ROOM: SAUVE QUI PEUT

Who’d want to be a Government back bencher? Politics has resumed with a bang of kiloton magnitude. The period since the last election eighteen months ago now appears to resemble a phoney war. It’s as if the Government has suddenly woken up to the reality of what most of the doomsayers have been pronouncing over the past year. There’s nothing new, just that it has now penetrated that what was critical but not serious has now become deadly serious.

Since the summer break there has been speculation that the Government would not survive the year, for which read December’s budget. We shall see. The main cement holding it together has been the firm resolve of the two party hierarchies not to rock the boat by undermining the carefully constructed and fairly anodyne Programme for Government, with the recognition that failure to hang together may result in the parties hanging separately, such is the volatility of public opinion.

The stresses and strains have been building for some time. Government backbenchers have been worried since last December’s budget with the realisation that it would be a long time before there were loaves and fishes to hand out. It has now dawned that the reality will actually have to be the opposite: distributing demand and pay –up notices for increased and new taxes to the voters just to try to bridge the budget gap. Not an ideal platform on which to seek re-election.

The hostile reaction to transitory charges for a household property tax (continued massive non-compliance) and a rural septic tank registration fee (compliance derisory) has provided them with further food for thought while the mega threat of the pending property tax looms. Indeed the Government has been obliged to downplay the likely amount of the tax, suggesting an average figure of around $500 per house from July 1 2013. The devil will be in the detail, with the main battle lines to be drawn over who is to be exempt and what the rural/urban balance will be – any value based tax would discriminate heavily against those living in Dublin.

Since not all of the largest group of government backbenchers in the country’s history could expect to retain their seats next time round, there has been the additional shock of the recently announced mandatory constituency revisions. Many constituencies have been redrawn and the number of seats reduced by eight. The result has left a large number of government deputies less than gruntled, something likely to be reflected in increasing grass roots discontent directed upwards.

There will be much to be discontented about. Three and a half billion Euro for next year has to be found in December, two thirds through spending cuts, one third in higher and new taxes. The easy expenditure targets were hit last year. The cliché is there is now no low hanging fruit. The recent outrage at proposed cuts of $180 million in home help services to the handicapped and the house bound just to balance this year’s health budget is only a foretaste. Far more savage cuts will be needed particularly in the big spending departments of Health Education and Social Protection (Welfare) to achieve the 2013 target figure for cuts.

With all public expenditure to be scrutinised for possible cuts, there has been renewed focus on the three sacred cows anointed in the Programme for Government: no changes in public sector pay and pensions, basic income tax rates and basic social welfare payments. The IMF has joined with many domestic commentators to advocate tackling these in some form.

Public sector pay and pensions took a hit several years ago but are protected until the end of 2014 under the Croke Park Agreement. With 70% plus of the health and education budgets going on salaries alone a number of Ministerial voices, from both parties, have been heard recently calling for the agreement to be revisited, under its get out of jail clause, the rationale being that public servants have guaranteed employment and are better placed to take a hit. While the agreement has been staunchly supported by Labour, cutting public sector pay as an alternative to cutting core health and education services has an obvious appeal. One thing is certain; if they survive unscathed in this year’s budget, public sector pay levels will be the prime target for the cuts due at the end of 2013.

The commitment not to increase basic income tax rates, championed in large part by Fine Gael, is likely to be maintained, though there may be some tweaking of bands to ensure that more people pay tax and those already paying pay more. The reality however is that the other tax hikes and promised new taxes are likely to be borne overwhelmingly by the “coping classes,” those already in the income tax net and who pay for everything and who can do little about it. There is therefore little scope for squeezing more out of this particular constituency by a simple tax hike.

The Government’s stand on maintaining social welfare payments at their existing generous levels is beginning to look threadbare, particularly where some of the benefits are universal and not means tested. The spectacle of protesters in wheelchairs outside a government meeting over proposed cuts of a few million does not sit well with the reality of large child benefit payments to hundreds of thousands of recipients, many of them comfortably off.

The current government has up to now wrung its hands at proposals to means test or tax child benefit, fearful of adverse public reaction but its mettle is likely to be sorely tested this time round. The radical solution, to deduct tax at the standard rate before payment, and exempt the less well off, is still a step too far, but some shaving of the amounts, justified semantically, is likely to be the outcome. Ditto with regard to job seeker’s allowance, where the existence of poverty traps for low paid workers may impel some reduction for those who are better off on the dole. Certainly the Social Protection budget will come under great pressure.

The last great sacred cow, the package of benefits given to the elderly, many without means testing, is also coming under scrutiny. It’s unlikely that the state pension will actually be reduced; the last reduction, in 1931, has entered Irish political folklore as the ultimate No No. But another attempt to means test medical cards for the elderly and some restriction on free travel seems likely.

All this has to be thrashed out before December and already the pressure groups seeking to protect their part of the status quo are up and running. One is reminded of Bernard Shaw’s observation that, if you rob Peter to pay Paul, you can rely on the support of Paul.

This is even before the already signalled additional taxes – to make up the $ 1.5 billion total – are considered. Here, apart from hikes in drinks, cigarettes and fuel, vehicle tax will be revamped – upwards . There may be further tinkering with VAT rates; who knows what else will be in the small print. Who’d want to be a Government backbencher!”
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ANCESTRAL VOICES PROPHESYING WAR

Between now and the year’s end, the mettle of the government seems set to be tested.

The main issue will be framing the December  budget and finding cuts or increased taxes sufficient to meet the stated target of more than $4 billion in savings for 2013. The “easy bits” have been done. Given that Labour remains ideologically opposed to cuts in the basic levels of welfare payments, how agreement is secured will be interesting.

The Troika has suggested looking at the overarching sacred cow of universal benefits and introducing means testing on some of them, including child benefit and  the generous entitlements of the old (free travel,  free electricity among others). Last year’s bleating and handwringing by politicians and not so veiled threats from the interest groups involved have been trotted out again and we are still only in August. Have we advanced nothing since last December?

The government has thus far remained tight lipped about the small print on the property tax, likely to be the main new fiscal imposition,  beyond announcing that it will be collected by the tax authorities, thus avoiding the fiasco of the 2012 household charge, an issue which continues to rumble on. Could there be a quid pro quo  in a budget announcement on this to balance some semantic legerdemain on welfare benefits?

While tackling the economic mess is paramount,  and while the priority should be ensuring the public is educated and properly informed about  this issue, crucial to our national survival, the government continues to occupy  itself with near irrelevancies. The public debate on the abolition of the Senate is slowly gaining momentum. It is hardly a priority, may prove a distraction and will require a constitutional referendum. One is already scheduled on the rights of the child. Frankly these are indulgences we cannot afford at present.

Ditto the recent statement by Eamon Gilmore, deputy Taoiseach, that gay marriage is THE “civil right issue of this generation” (really?). Ditto also ideas floated to hike minimum prices for alcohol to curb teenage drinking, and suggestions to increase incrementally the price of cigarettes (already the highest in Europe) to $1 per cigarette!  A smuggler’s manifesto. All are superstructure issues when the priority is the substructure ( BTW,  the only Marx I identify with is Groucho, not Karl!).

Meanwhile there is to be a constitutional convention to review the current document . Already identified as issues to be addressed  are “priorities” such as removing blasphemy, reducing the term of the President to five years and  lowering the voting age from 18 to 17. These will undoubtedly lick the creaking pre -World War Two basic law, with its dated language and syntax, into an instrument fit for 21^st Century purpose.

In fairness,  there has been some improvement in the official financial situation due to some marginal easing on this year’s promissory note.  The  government is hoping additionally for some substantive (and substantial) relief – in whatever form – on the bank debt portion of our borrowing burden  and is upbeat on something emerging before December. Like every taxpayer I hope they are right. Any relief and its extent is contingent on events in the Eurozone and it would be a brave man who would bet on the outcome there. But even were the cross of the bank debt lifted, the grim spires of over generous welfare benefits and an inadequate tax base would remain to be addressed.

There has also been some progress aimed at ensuring that what happened can never recur. With the caveat that military planners prepare against the last war, this is welcome. Nothing has actually been passed into law but draft legislation on  ethics and  bankruptcy reform have appeared, hardly ideal but a big improvement on the current situation. The Financial Regulator has full government backing for his tough line and there is a sense that, slowly, the situation is being addressed. The first criminal charges have been issued against former bankers. The Courts have shown signs of a get tough policy on white collar crime and have also taken a vigorous line against individuals attempting to file for bankruptcy in Britain.

However, the small print of company and tax legislation remains to be addressed, including the distinction between a company  and the  individual (s) controlling it. The issue of taxation, residency  and citizenship also needs to be explored in a serious fashion, as well as tackling what is steadily emerging as the elephant in the room – the level of private, chiefly mortgage,  debt. This last could prove terminal.

Eighteen months in, the pressures are beginning  to mount on the government with the largest majority in the history of the state. It now has firm ownership of the ship of state and can no longer get away with blaming its predecessor. Backbenchers are getting increasingly uneasy as the months pass, the economic situation remains dire and election promises get more hollow by the day. While the economic realities were signalled well in advance of the last election, the public has limited patience and the reality has now dawned on many of those newly elected that they will be in the firing line of public displeasure next time round. The horses are definitely showing signs of fright.

Another issue all could do without, the thorny one of abortion, has re-surfaced out of left field. Abortion generates strong emotions and polarised views at any time and has had a particularly fraught recent  political history in Ireland. While there was never any prospect of an Irish legislature legalising abortion,  in the 1980s the pro-lifers sought to copper fasten matters with a constitutional referendum. The constitution now accords the foetus a right to life “with due regard to the equal right to life of the mother.” Not surprisingly this resulted in court actions and further referendums, including one in 1992 where almost 40% voted to prevent  a pregnant woman from leaving Ireland to secure an abortion elsewhere (in the wake of the infamous X case).

The issue has arisen again now because of the need for the government to comply with a ruling from the European Court of Human Rights to legislate over  the human rights of a woman (in the C case) unable to obtain  an abortion in Ireland. The war drums are beating already. Given that Fine Gael is pro-life, and Labour pro-choice, this looks interesting.

Meanwhile an  invisible mermaid is materialising, with dire potential. The pharmaceutical industry, carefully nurtured over the years, was one of the jewels in the crown of the Celtic Tiger, and one of Ireland’s  functioning  fig leafs post crash.  Its heavy hitters were patented drugs, which generated enormous revenues. Now, however, some of the major patents have begun to expire (e.g. Lipitor) with more to follow. The first half of 2012 has seen  a sharp drop of 30% in pharmaceutical exports to the USA ; when the patents expire in Europe further falls are anticipated. Long flagged, now that the moment has arrived the reality is disturbing.  Unless there are fresh patents, the prospects for the pharmaceutical sector look uncertain. This is a bell weather issue ( involving exports worth billions) which the government cannot afford to ignore.

DOING OUR BIT TO SAVE THE EARTH

Ireland is set to measure the carbon footprint not just of its people but of its cattle! No, the silly season has not arrived .  Another new contract  for Irish Beef destined for McDonalds was announced recently. Currently 20% of Big Macs consumed in Europe are made with Irish beef and new contracts and new investment promise to increase this proportion. Which is very good news for the Irish beef industry.

In welcoming this, the Agriculture Minister proclaimed a world first for Ireland – plans to identify not only the individual animal the beef came from, but also to detail the carbon footprint of the animal, i.e. how much its methane emissions amount to annually!  All this as part of the drive to make Irish beef more attractive to environmentally conscious consumers,  conserve energy, and reduce Ireland’s carbon footprint.

Irish agriculture has escaped much of the recession and  food and food related products are booming. Ireland is the fourth largest net exporter of beef in the world and half of the cream liqueurs sold in the world are made here. A concerted drive is under way to stress the quality and healthy nature of food produced in Ireland. The export potential, particularly in markets such as China, is immense. There are plans to expand beef and milk production,  to be done in a sustainable way, in order to meet the separate targets set for energy saving and reductions in greenhouse gas emissions.

It’s worth looking at this at a time when we have had a few recent reminders that  we are a small country trying to survive and make an impact. The Eurocrisis continues to unfold, but now there is talk of some significant relief on our banking debt, which will be achieved by clinging to the coattails of a much bigger country, Spain. However it is achieved it will be welcome, though given our structural deficit it will not be a case of “with one bound our hero was free.” In sport also our soccer team, of whom much had been expected,  performed abysmally at the European Championships, clocking up the worst results ever by  a qualifier, while our rugby team (expectations ditto) suffered a crushing whitewash in New Zealand.

Jokes apart,  the largest single component of our greenhouse gas emissions is agriculture, which accounts for 30% of the total, followed by energy at 22% and transport at 19%. Irish industry is relatively clean at 15%. Hence the concentration on cleaning up agriculture and the carbon footprint of cattle.  However, overall, Ireland continues to perform poorly in terms of its international commitments under the Kyoto agreement and  the environment lobby has for years been beating up on the Government over this. There have been recent signs that the figures are moving in the right direction, but this is  chiefly because of the domestic recession.

And there is one of the rubs. During the years of the Celtic Tiger greenhouse emissions rose sharply as the economy boomed. We are now striving to restore economic growth, the mantra for solving unemployment and restoring prosperity. This  will almost inevitably generate more pollution and more greenhouse gases. Sustainable development, the other mantra of most of the first world, is a longer term project and, in Ireland’s case, could well  involve higher costs, thus inhibiting growth  by overpricing our exports. It’s not an easy place to be, particularly since Irish energy costs are already among the highest in Europe and there is much local resistance to proposals for sustainable energy projects such as wind farms. There is also the unpalatable truth that if, for example, Ireland was to reduce the size of its dairy herd in order to reduce its carbon footprint, any slack or gap in the market would be filled rapidly by Latin American and other producers.

Should Ireland be making the effort? We are, after all a very small player on the world scene.  Ireland is currently No. 66 in the league table of carbon footprint emissions, with  43,604,000 metric tonnes released in 2008, 0.14% of the world total. China led the way with over 7 thousand million tonnes released, 160 times the Irish total and 23.33% of the world total. The USA was second, with almost 5.5 billion tonnes (18%). India and Russia, the next two countries were some way behind, each contributing  over 5% of the world total. The total emissions from all 27 EU states came to 14% of the global total, less than the USA alone.

By 2010 China’s emissions had increased by 14% to almost 8.25 billion tonnes, India’s by  18.7% to pass the two billion mark,  the USA and Russia had remained roughly the same. The increase in China’s emissions  was greater than  Ireland’s total emissions would amount to over 20 years. The complicating factor is, of course, the per capita figure, with Chinese CO2 emissions less than 5 tons per capita, India’s less than 2 tons, the USA over  19 tons and Australia over 20.

Although Ireland’s emissions per capita have been declining since 2001, Ireland still had the second highest level in the EU in 2009 with 13.8 tons, second only  to Luxembourg (which has a slightly artificial figure) and well above the EU average of 9.2 tons. There is definitely scope for action.

The whole issue of climate change has become something of a political football. I’ve always regarded it as a no brainer. The rapid industrialisation of countries like China and India, as well as the second echelon of developing nations, are generating man made pollutants on a scale never encountered before. Parking for a moment fanciful (and unprovable) notions that the Earth can take it or that what is occurring is just part of a natural cycle of climate change of indeterminate length and intensity, it is at least prudent to sit down and work out a strategy for  dealing with a possible worst case scenario. The Hole in the Ozone Layer should have been a warning tap on the shoulder.

There is no doubt that global action is needed on the environment, and quickly. Yet the recent failure of the Rio + 20 Conference to produce anything more than a non-binding declaration shows how difficult it is to achieve concrete results internationally . It’s not hard to suggest a reason. Whatever pronouncements their leaders make,  populations in the developing world  want essentially what  their counterparts in the developed world have – a higher standard of living; and who can blame them.  Those counterparts  are loathe to cut back significantly to make space, and have politicians finely tuned to respond. The result is more pollution and a succession of international talking shops that get nowhere.

This is not an area where Ireland  of itself can make a material difference. But it is one where we can make a moral point,  perhaps begin setting an example, even become proactive in working for effective international action. I have pointed out previously the false premises behind much of our whinging. We are among the world’s fortunate. We have no historical baggage. This is an issue which could potentially affect all mankind. Ireland’s stance should be unequivocal.

PIGS, TURKEYS AND THE
EURO

At least the Irish turkeys (with the exception of one sub-set)
did not vote for Christmas. In the end the
referendum on the Fiscal Treaty passed comfortably. The outcome can best be
described as prompted by enlightened self-interest. The campaign was singularly
uninspiring, with much heat being generated over our sovereign right to borrow,
as if borrowing is a virtue.

Ireland continues to stagger along,
borrowing $400 million per week just to keep the country functioning. As long as
the electorate, and through them the politicians, are unwilling to cut the
welfare benefits we have chosen to pay ourselves, and to cut numbers and
services in the public sector rather than the wages we pay, the country will
have to go on borrowing, the debt will mount up and the interest payable on it
will continue to rise.

This is the reality. The Fiscal Treaty offers the
prospect of securing future funding at advantageous rates when our current
monetary life support system ceases with the end of the Troika supervised deal
after 2013. The brave talk is that Ireland will then “be able to re-enter the
markets.” One commentator has wryly observed that this means, in effect, that we
will leave our own friendly credit union and go to the moneylender down the
street. The moneylenders (sorry, the markets) were unwilling to lend to us in
November 2010, hence the Troika bailout.

There
is every possibility, even likelihood that a second bailout will be necessary,
and in any event who can guess where Ireland, or the Euro, will be by 2014. The
importance of the yes vote was that we did not shut the door prematurely on a
potential source of future cheap money and the treaty’s opponents were unable to
address that point. Indignant whinges about bullying and lost sovereignty cut
little ice in a situation where we are obliged to borrow. Until the books are
balanced this will continue to be the case.

The sub-set that bucked the
trend was the urban working class vote, which appears to have voted no in
considerable numbers. This has been interpreted as marking a growing
polarisation of the Irish electorate along class lines. Perhaps, though it might
simply be a sense of disenchantment among some who voted Labour last year,
contrasting its strong stance during the election campaign with its performance
in government since.

They would be well advised to reflect on Labour’s
position as very much the junior coalition partner, even before considering the
external economic situation the country faces. They should also reflect on the
illogicality of voting in a way which, if successful, would have quickly led to
some really savage welfare cuts. The country raises income sufficient for eight
months and must borrow for the other four. Does anyone seriously think the gap
can be bridged just by soaking the rich; what rich? Arguing that a no vote was a
vote “against austerity” was simply delusional.

If the government
reaction was one of relief at the outcome, Sinn Fein’s glee was evident. Some
polls suggest it is now the second most popular party in the state. Its campaign
for rejection was a mixture of bombastic chauvinism, with talks of wielding
vetoes against Europe, and populist left wing proposals for higher taxes on the
better off and salary cuts for higher paid public servants. Somewhat
inconsistently it also asserted that our “gallant allies in Europe” would
continue to fund us should we vote no.

Given that we are still very
much engaged fiscally in a work in progress, with at least two harsh budgets and
more pain to come, there is every prospect for Sinn Fein to consolidate its
position further at the expense of Labour and perhaps Fianna Fail.  It now has
the working class Labour vote clearly in its sights. It will be interesting to
see how Labour behaves over the required cuts in the next
budget.

Developments on the larger European stage just might throw Labour
a lifeline, though it has to be re-emphasised that even if all Ireland’s debt
(over 70% of which is due to our own spending excesses and has nothing to do
with the banks) were to disappear magically overnight, we would still have to
borrow to pay next week’s welfare payments. We can at least be upfront about our
record of compliance with the Troika programme to date and can now point to the
positive referendum outcome.

The flavour of the month in Eurospeak terms
is the notion of an economic stimulus package (writ small, a similar notion was
touted by Sinn Fein, but ran aground on the practicality of finding funding;
more borrowing?). Hollande, the new French (socialist) president has even
proposed tying French ratification of the Fiscal Treaty to getting some such
package tacked on to the treaty. I suggested last time that some Potemkin
village-style construct might be fabricated to satisfy him and others who
believe that economic growth and recovery can be generated easily. And, indeed,
the whole Fiscal Treaty can be regarded, somewhat similarly as a Potemkin
exercise to mollify the German electorate. Does anyone seriously see the small
print of the treaty being implemented?

But right now the priority is to
address the situation in the PIGS, whatever waffle there may be about growth. I
write before the second Greek election, which may prove a tipping point. All the
PIGS have now received bailouts, the latest being Spain whose banks are shaping
up to be the Irish situation writ larger. Spain has been described as too big to
fail. A bailout has been agreed as I write, but, based on past performance,
there is considerable doubt whether the action taken will be sufficient or
timely enough to provide a lasting solution. The pious hope here is that in some
way a lasting solution involving a greater role for the European Central Bank
would have positive implications for revisiting Ireland’s banking debt, still
leaving us, however, with the other 70%.

Looking at the broader picture,
the slow emergence of a European super state built around Germany, about which I
wrote two years ago, continues apace. Arguably grappling with the current fiscal
crisis is giving impetus to the process.  Already remedies and proposals for
solutions unthinkable two years ago are now firmly on the table, though sorting
them out and finding the correct balance may take some time. Ultimately some
variant on the Alexander Hamilton solution of a fiscal union seems the likely
eventual outcome, always allowing for the quirks of the democratic process. But
Germany must step up to this particular plate.

Though little remarked
upon, Britain breaking ranks late last year may come to be seen as a very
significant landmark. Once the straightjacket of unanimity was removed progress
has been swift – at least in European terms. The Fiscal Treaty was drafted
rapidly and outside the existing Treaty structures so that no country could
wield a veto or delay matters. On past form it is highly likely that several
future agreements and modifications will be necessary before the Euro crisis is
finally resolved. Expect them to be also drafted in a way that precludes any
national veto.

EMMET LARKIN et al

By the time you read this the latest Irish episode in the ongoing Euro saga will have taken place – the referendum on May 31 on the European Stability Treaty. More about that later.

But first I must acknowledge the sad  passing of Emmet Larkin, whose memorial service at the University of Chicago was the day before Ireland voted. With Emmet’s death, Chicago, Ireland and Irish America has lost a great character and friend.

Emmet Larkin came to the University of Chicago in 1966, where he was Professor of British and Irish History until his retirement in 2006. Together with his friend Professor Larry McCaffrey, he was a seminal figure in promoting Irish studies in the USA through the American Conference for Irish Studies, which they founded in 1960.

Irish studies in the USA are now booming, due in no small part to the ACIS and its founders and Emmet’s role should not be forgotten. It should not be forgotten either that it was the same year,1960,  that the first Irish Catholic was elected U.S. President and that the huge Irish American community took its rightful place in American life.

Emmet’s academic speciality was the Catholic Church in 19^th Century Ireland of which he had a deep and erudite understanding, expressed in many books. It is interesting, at a time when the Irish Church is embattled, to recall his friend, Larry McCaffrey’s summation of Emmet’s conclusions on its role and influence in post-Famine Ireland:  the Church“provided an impoverished and oppressed people with consolation, hope, discipline, and cultural and national identity. It also has offered them social, medical and educational services when the state was indifferent to their poverty and ignorance.” Amen to that.

I recall discussing the Great Famine with him in the context of historical revisionism. One observation he made has stayed with me. “ It would not have been allowed to happen in Surrey, or any other part of England.” I first met Emmet in 1973, and last saw him, together with my wife, when we were his guests for  Thanksgiving 2006. My sincere condolences go to his widow, Dianne, and his family.

Back to the Referendum.  Up to early May the issue and the outcome seemed fairly clear. Rejection would paint us out of the certainty of being able to avail of cheap loans from an enhanced bailout fund should more borrowing, i.e. a second bailout, become necessary. The quid pro quo was to tie us into future budgetary constraints. Furthermore rejection would not hold up the treaty: we would be left behind the other Euro member states.

As I mentioned in an earlier column, many have seen the whole treaty as little more than a Potemkin exercise designed to allay the fears of German voters and as contributing little to any overall long term solution to the Euro crisis– another example of a political remedy for an economic problem. We seem now to be steaming towards another Potemkin add-on with an attempt by the heavy hitters among Europe’s politicians to head off popular dissatisfaction  with tough economic measures by tacking on some form of economic stimulus package to the treaty; it is being put together as I write.

The Government  made a judgement call,  “bravely “in my view, (as Yes Minister would put it) to hold the referendum early rather than late. This despite the flak they were getting over the modest  household charge of around $130 per annum. Registration and payments are currently running at around 57%, indicating massive non –compliance.  A near fiasco over the details  of the latest planned stealth tax – water charges – did not improve the public mood. A cynic would suggest that, since there is worse to come – the small print of the pending property tax, for example – it was better to try to get the referendum over with early.

The polls up to now show  a solid majority in favour of the treaty, less because of the efforts of the Yes side, than because the No side were unable to provide any reasonable suggestion of where the $400 million a week needed to run the country would come from were Ireland to vote No. Sloganizing from the Left about increased and new taxes on the rich sounded hollow, if only because, even if they worked, the time delay to net an effective yield would involve a serious period of real privation and hardship which the ordinary punters would not stomach. The second No argument – that ultimately “our gallant allies in Europe” would not see us short, while perhaps containing an element of truth, was not something to bet the house on.

Recent developments elsewhere in Europe  have served to muddy the waters to some extent though not, on the face of it, to affect seriously the referendum outcome, at least according to the latest polls. France has elected a Socialist president, who has spent the time since his election rowing back on his earlier campaign stances. The last one, in 1983, was forced to abandon the free spending policies which got him elected and implement a sharp “austerity turn”. Plus ca change?

The Dutch government has shipped water and  a cobbled together temporary coalition is casting around for politically palatable budgetary measures. Even in Germany the latest regional elections have seen reverses for the government. And in Spain, the fourth of the big four Eurozone countries, the banking and unemployment situations are moving to critical.

It’s fairly clear that ordinary citizens in Europe are exasperated and  frustrated that the decades of rising living standards are over for now at least and virtually every government has taken a pasting at the polls since 2008 (the only exception being Estonia). But at the margin, among the PIGS, the issue of how to manage a fiscal crisis rather  than a mere annoyance has immediate relevance. Ireland is in a bail-out situation, and thus far is handling it without fuss or real hardship (belt tightening does not constitute hardship!).

It is hardly surprising therefore that the principle that seems to work with the Irish voter at referendum time, “When in doubt vote No” appears on this occasion to be working in favour of the Yes side. While the treaty is not exactly palatable, rejection without a clear visible alternative seems just too risky. The hard won progress of the last three years is not for discarding easily. Again, the spectacle of Greece continues to concentrate minds. The Greek voters  decisively rejected its bail – out deal and the country is currently in political crisis and eyeball-to eyeball  with its paymasters in Germany.

While the economic stimulus package proposal has potentially handed the No lobby another weapon by casting doubt on the wisdom of the May vote, of itself it should not suffice to defeat the treaty. A far greater threat would be  the perception that the contest was won, with a consequent low turnout on the Yes side. This was what happened at Nice One.

Whatever the vote in Ireland, or the eventual  outcome in Greece, the Eurozone is lurching again, hopefully in a forward direction. The pieces may be on the table, but putting the jigsaw together will not be done overnight.

THE GREYING OF THE GREEN

Detailed data from last year’s census is now starting to emerge. It makes fascinating reading, revealing  a country with a vibrant growing population despite the economic downturn and the re-emergence of emigration.  It highlights the effects of recent inward migration (on which I have written previously) and also traces the (very )gradual greying of the Irish population. Those interested further should consult either of the two Irish websites cso.ie or airo.ie.

The population of  the 26 Counties is now officially  4,588,252, the highest for 150 years. It has risen by over 25% since 1996 (five times the rate of the rest of the EU) and there is as yet no sign of a slowdown; indeed there has been a 7.6% increase since 2006, despite our economic woes. Moreover, most of this latest  increase is due to the number of births since 2006, which at 365,000, far exceeds the number of deaths, 141,000. The latest data paints a complicated picture, containing several elements. Apologies for what follows; perhaps Mark Twain was right!

Firstly migration, which has, not surprisingly, been the focus of a lot of attention. Non-nationals at 544,000 now account for 12% of the population. And it’s now official. Poles are Ireland’s largest national minority, at 122,600, more than the British. The number has increased by 94 % since 2006, with the number of women increasing by 142% and Polish born children by 300% to 14,000. These figures exclude 10,000 children born here to Poles. The next two largest communities are from the Baltic republics of Lithuania (36,683)  and Latvia (20,593), both up by 50%. The number of Romanians, at 17,304, has increased by 124%, and seems set to increase further, given that Romanians will only get unrestricted entry after January 2014. The Indian community now numbers 17,000, having doubled in five years..

Elsewhere, the number of Brazilians recorded was 8700, up 100%, while the figure for people from Mauritius, at 2844 was up by 344% ! (Interestingly the flow of arrivals from Mauritius has dried up since a visa requirement was introduced in January 2011, while the numbers arriving from Brazil continue to increase.) Nigerians remain by far the largest African community, up 8 % at 17,600, in a total of 41,642, while the number of Filipinos, at 12,791 (34% higher) now exceeds the number of resident Chinese in a declared Asian figure of 65,579. The figure for US citizens, at 11,015, is down by 11.7%. The number of Travellers, at 29,573, is up 32%, though this figure is already being disputed as an underestimate by Traveller groups.

Does this mean Ireland is now a fully-fledged multi-ethnic, multi-cultural society? You be the judge. Nine out of ten of the population are Irish, while the number of persons declaring themselves Catholics, at 84%,  has actually risen by 5% or 180,000, at a time when the number of regular mass goers is in decline. The increase in the number of Catholics is probably down to a combination of immigration (the staunchly Catholic Poles and Lithuanians in particular) and a growing  identification among many Irish with Catholicism  for cultural as much as religious reasons.

The number of Muslims has risen by 51% to 49,204, in total just over 1% of the population, but this represents only an extra 17,000 people in five years, about the same as the combined increase in “Other Christian “ and “Pentacostal” numbers. This is less than the increase in Orthodox Christians, up by 24,425, or 117%, to 45,223. Most other religions are also up significantly with the exception of Methodists, who have shown a sharp fall in numbers from over 12,000 to under 7,000. The numbers declaring no religion have risen by 45% to 270,000.

The shift in the cause of the population increase since 2006 has been dramatic. Between 2002 and 2006 net immigration accounted for two-thirds of the rise. The next five years have seen an almost exact reversal, with natural increase now supplying two thirds of the growth. The  Irish fertility rate has remained constant at 2.1% throughout the last decade – one of the highest in Europe – but the numbers of women of child bearing age have increased, and births since 2006 have totalled 365,000, a healthy average annual 73,000.The upward trend in population seems set to continue with Ireland’s national average age, at 36.1,  among the lowest in Europe. Moreover, despite the recession, while emigration has resumed, immigration has not stopped; in the year to April 2011 20,000 Irish nationals and 34,000 non-nationals relocated to Ireland.

It’s now possible to get some perspective also on the changing, gently greying, age profile of the Irish population over the last generation or so.  The population (and arguably the country)  hit a low in 1961 of 2,818,341. This included 877,000 under 15 years, around 30%, but only 392,000 between 15 and 25, and 315,000 over the age of 65, around 11%,  reflecting at once the large sizes of Irish families, the massive emigration of young adults up to 1960, and the effects of emigration and unhealthy lifestyles on life expectancy among the older sections of the population. This phenomenon, the very young comprising a large percentage of the population and the old a very much smaller one, was almost unique in Europe, and has taken half a century to change significantly.

The number of those under 15 peaked in 1981 at 1,043,729,  still around 30% of a population which had risen 22% in 20 years to 3,443,405, while  the figure for over 65s, though up to 368,954, remained stubbornly low at 11%,  as the effects of earlier emigration continued to work through the system.  Even in 1996, while the numbers over 65 had risen to 413,882, this still represented only just over 11% of a total population of 3,626,087. Here, however, the numbers under 15 had fallen to 859,424, under 24% of the total, representing some emigration but also heralding significant social change, with a marked rise in the status of women, increased availability of contraception and a shift to smaller families. The 2011 figures show this trend continuing, with 979,590 aged under 15, now down to 21.34% of the total.

On the face of it, the number of over 65s, while now up to 535,393, still seems modest enough at 11.67%. The trend towards greyness only becomes apparent when the figures for the preceding age group, 45-64, are also examined. There are now 1,042,879 in this category, up from  590,402 in 1981, but representing a percentage rise from 17 to almost 23% of the total. As these age, so the percentage of the over 65s will rise in tandem, bringing Ireland more into line with other European countries.

Further reports are to appear in the coming months, covering, inter alia, in greater detail, population distribution, housing, employment, health, cultural and religious diversity. These are important and will form the information base for the government’s strategic planning in areas such as education, health care and provision for the elderly. Right now the current data offers, notably, a positive snapshot of Ireland and her people as a timely counterweight to the prevailing climate of negativity.