IMF praise Ireland

ardmacha

THE International Monetary Fund has praised Ireland’s efforts to address the budget deficit and called on the European Central Bank to cut interest rates in a bid to boost growth in the region.

Calling for “unconventional” ways to push the eurozone out of the crisis, it also praised Irish policies designed to improve the country’s finances.

Comparing Ireland with Portugal in a new report, said that Ireland “has a well-established institutional framework in place when the crisis hit, strengthening the country’s capacity to deliver on targets and providing firm control over local government spending.”

The IMF said that both countries’ programmes have placed the burden on the wealthiest in society.

The IMF’s Fiscal Monitor analysed the budgetary positions of governments worldwide.

It added that Ireland’s “public finance management, revenue administration and the debt management agency have been proactive, anticipating problems and implementation challenges, and recalibrating policies accordingly”.

According to the IMF, Ireland will see positive growth of 0.5pc this year and 2pc in 2013 – one of the highest forecasts for a eurozone state.

By comparison, the eurozone will record negative growth of -0.5pc in the first half of the year with a gradual return to growth in the second half.

It recommended cutting interest rates as a means to boost growth in the eurozone area.

The IMF said a pan-European Agency is necessary to take financial stakes in banks "including in countries with little room to do so themselves."

Members of the EU/IMF/ECB troika are in Dublin this week to analyse Ireland’s progress under the bailout loans process.

It is headed up by IMF official Ajai Chopra.

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I accept that the Revenue in Ireland are relatively efficient and the NTMA also. I do have to wonder at any praise for "public finance management", given the lack of proper budgeting still remaining in many cases.

The pan European bank agency seems like the business.

later12

PDF itself is here
http://www.imf.org/external/pubs/ft/fm/2012/01/pdf/fm1201.pdf

Appendix 1: Fiscal Multipliers in Expansions and Contractions (pp33-39) is interesting reading for anyone interested in the front loading of debt in the pursuit of consolidation. There are also some interesting references to revenue raising vs expenditure consolidations in that piece, although it has to be said the IMF are traditionally a little more reticent on the need for expenditure cuts (front loaded or relative to revenue measures) than other commentators.

Tigerandahalf

ardmacha wrote: »

The IMF said that both countries’ programmes have placed the burden on the wealthiest in society.

I can't see how that could be really true. If we consider real wealth to be those earning over 100,000 they have hardly being hard hit. When you consider the value for money that many in this group are now getting in terms of their purchases I would say they are probably better off.

later12

Tigerandahalf wrote: »

I can't see how that could be really true. If we consider real wealth to be those earning over 100,000 they have hardly being hard hit. When you consider the value for money that many in this group are now getting in terms of their purchases I would say they are probably better off.

This is a common perception, but there doesn't really seem to be anything to support it.

If anything, the evidence suggests that in Ireland, the austerity measures are fairly regressive for the bottom 40% of households, but progressive thereafter.

http://www.esri.ie/UserFiles/publications/bkmnext209/BKMNEXT209.pdf




I realise that's not a ringing endorsement of Ireland's austerity measures, but I would say its strongly progressive nature among the higher deciles of earners makes it fairly acceptable.

We have to take into account the fact that expenditure cuts are making up about 60% of the Irish fiscal consolidation, the need for significant social welfare expenditure reductions and the preference of the troika for less emphasis on revenue measures. In that respect, I would say that if the above is an accurate reflection of the proportional impact of austerity amongst households, Ireland is doing rather well.

On the other hand, it is arguable that all of the low hanging fruit has been picked. All of the above came from Fianna Fail consolidations. It remains to be seen whether Fine Gael-Labour will be able to maintain this level of progressive austerity. I would be fairly sceptical that they will (not necessarily because of relative incompetence).

Tigerandahalf

Well you could read that in a number of ways. Have very high earners taken a huge hit in taxes/charges or is it more likely that the huge incomes they had have now being greatly reduced due to a lack of spending money on the part of the general public. Maybe I am reading it wrong and being unfair but you would need more research. I don't think the wealthiest are baring the brunt because taxes/charges have been levied excessively. There are still many tax breaks and loopholes out there.

later12

Tigerandahalf wrote: »

Well you could read that in a number of ways. Have very high earners taken a huge hit in taxes/charges or is it more likely that the huge incomes they had have now being greatly reduced due to a lack of spending money on the part of the general public.

Well not really because the paper only focuses on first order responses to austerity, i.e. it models how taxes, social insurance contributions, welfare reductions (and so on) impact various different households by income, household composition, and so on. It demonstrates strong progressivity from that perspective.

The biggest shortcoming of the model, as is explained in the paper, is somewhat related to what you raise, however. A substantial increase in unemployment between 2008 (the year of the income and living conditions data utilized) and 2011 would not have been appropriately picked up in the model, whereas austerity measures up until 2011 were included.

This could alter the size of the distribution: most significantly for the lowest earners in society.

Godge

Tigerandahalf wrote: »

Well you could read that in a number of ways. Have very high earners taken a huge hit in taxes/charges or is it more likely that the huge incomes they had have now being greatly reduced due to a lack of spending money on the part of the general public. Maybe I am reading it wrong and being unfair but you would need more research. I don't think the wealthiest are baring the brunt because taxes/charges have been levied excessively. There are still many tax breaks and loopholes out there.

I haven't the time to go through the research but Ireland has one of the more progressive income tax systems in the OECD. The problems with overall taxation not being progressive is because we don't have a properly functioning property tax and have huge exemptions from CAT and CGT particularly for people inheriting wealth.

[Jackass]

Yeah but me pack of smokes went up 20 cent and me welfare doesn't buy me as much any more. Enda OUT! Sure they're all the same, corrupt. [/ general electorate response]

golfwallah

[Jackass] wrote: »

Yeah but me pack of smokes went up 20 cent and me welfare doesn't buy me as much any more. Enda OUT! Sure they're all the same, corrupt. [/ general electorate response]

"The best argument against democracy is a five-minute conversation with the average voter" - Churchill quote.:D
Read more at http://www.brainyquote.com/quotes/authors/w/winston_churchill_6.html#40BUPxyL1fDw4zqO.99

drdeadlift

But we so far in debt these nice comments mean nothing much at all.

coolwings

Godge wrote: »

.... The problems with overall taxation not being progressive is because we don't have a properly functioning property tax ....

So on the planet you inhabit the government dipping into peoples' pension funds and stealing their money is not taking (taxing) property?

K-9

Tigerandahalf wrote: »

Well you could read that in a number of ways. Have very high earners taken a huge hit in taxes/charges or is it more likely that the huge incomes they had have now being greatly reduced due to a lack of spending money on the part of the general public. Maybe I am reading it wrong and being unfair but you would need more research. I don't think the wealthiest are baring the brunt because taxes/charges have been levied excessively. There are still many tax breaks and loopholes out there.

Extra levies have been imposed on higher incomes, an example being the USC which is progressive and is applied regardless of reliefs or breaks. There are also now restrictions on reliefs, Incomes over 400k now have to pay a minimum 20% tax rate, again regardless of reliefs etc. These measures would explain the figures. Now people might think these haven't gone far enough but there have been measures to tax higher income more.

ardmacha

Boost as €14.4bn tax take and first May surplus since 2008

Tuesday June 05 2012

TAX revenues hit €14.4bn in the first five months of the year, an increase of €1.6bn in the same period of 2011, according to the latest Exchequer Returns.

And the Exchequer recorded a surplus in the month of May of just over €600m for the first time since the same period in 2008 although the month of November generally records a surplus every year given the concentration of tax revenue received.

The May boost is considered a bellwether for the rest of the year putting the Government on course to meet targets set out as part of the EU/IMF/ECB bailout loan terms.

http://www.independent.ie/business/irish/boost-as-144bn-tax-take-and-first-may-surplus-since-2008-3130312.html

http://www.irishtimes.com/newspaper/breaking/2012/0605/breaking37.html

n97 mini

ardmacha wrote: »

I accept that the Revenue in Ireland are relatively efficient

Kevin Cardiff's Revenue, who for example issued faulty guidelines sending CSID on a €10m VAT merry go round?

Revenue efficient. C'mon, gimme a break.

ardmacha

I didn't say that the Revenue were perfect, but they are relatively efficient. If Greece had such a service they would be better off today.

n97 mini

Relative to Greece?

Greece has a massive culture of tax evasion, and no, my personal dealings with the our low achieving Revenue here, never mind all the cock ups that make the media, tells me that no, they're not the answer to Greece's problems.

Even just phone the Revenue in Co Kildare (059 8643200). Same message on the IVR for ages now. Tells you press 9 for all other options. You press 9 and it says "Not a valid choice".

barneystinson

n97 mini wrote: »

Relative to Greece?

Greece has a massive culture of tax evasion, and no, my personal dealings with the our low achieving Revenue here, never mind all the cock ups that make the media, tells me that no, they're not the answer to Greece's problems.

Even just phone the Revenue in Co Kildare (059 8643200). Same message on the IVR for ages now. Tells you press 9 for all other options. You press 9 and it says "Not a valid choice".

Relative to other OECD countries. http://www.oecd-ilibrary.org/sites/gov_glance-2011-en/12/08/index.html;jsessionid=us2jjljdwu7x.delta?contentType=&itemId=/content/chapter/gov_glance-2011-64-en&containerItemId=/content/serial/22214399&accessItemIds=/content/book/gov_glance-2011-en&mimeType=text/html

And Ireland doesn't have a culture of tax evasion??!

And here's the results of 2 of the most recent customer surveys conducted by Revenue, of SMEs and PAYE customers, both of which indicate very high levels of customer satisfaction:
http://www.revenue.ie/en/about/publications/business-survey2009.pdf
http://www.revenue.ie/en/about/publications/paye-survey-report-2009-2010.pdf

So I'd suggest that Revenue is RELATIVELY efficient; relative to their OECD/EU counterparts, and relative to other Irish Govt departments (although I haven't looked at the results of surveys of customers of other Govt depts I shudder to think what they might look like).

I think at times you just like the sound of yourself giving out n97...

Godge

n97 mini wrote: »

Kevin Cardiff's Revenue, who for example issued faulty guidelines sending CSID on a €10m VAT merry go round?

Revenue efficient. C'mon, gimme a break.

Kevin Cardiff was Secretary General, Department of Finance, not of the Revenue Commissioners.

At least try and get it accurate before you ignorantly and erroneously criticise people.

n97 mini

My mistake about KC (not that there's a huge difference), Revenue here are more "efficient" than Greece because relatively compliant tax payers here make their job easier.

antoobrien

n97 mini wrote: »

My mistake about KC (not that there's a huge difference), Revenue here are more "efficient" than Greece because relatively compliant tax payers here make their job easier.

The tax amnesties of the 80s & 90s paint a different story. The fact is that most people in Ireland have only one source of income and it is taxed at source by their employers. This allows revenue to only need to follow up on people that have other sources of incomes.

Besides, when the interest & penalties are so high it's in your interest to pay up. Send that system and attitude to Greece and maybe we'll see what happens.

Godge

n97 mini wrote: »

My mistake about KC (not that there's a huge difference), Revenue here are more "efficient" than Greece because relatively compliant tax payers here make their job easier.

The difference is about the same as saying Michael O'Leary is chief executive of Aer Lingus. If that is a small difference....

RichardAnd

n97 mini wrote: »

My mistake about KC (not that there's a huge difference), Revenue here are more "efficient" than Greece because relatively compliant tax payers here make their job easier.

Unless you have first hand experience within both the Greek and Irish Revenue bodies, I don't think you can really make that kind of comparison.

Hayte

drdeadlift wrote: »

But we so far in debt these nice comments mean nothing much at all.

Honestly I don't know whether getting the thumbs up from the IMF is even a good thing. They have a long history of forcing countries with dysfunctional, debt based spending problems to suddenly run budget surpluses during disastrous economic downturns. It has traditionally resulted in those countries sinking deeper into recession. See East Asia 1997, Zimbabwe 2001 and Argentina 2002 and probably a boatload more that I'm not aware of.

Friedrich List famously said about Britain and protectionism that "it is a very common clever device that when anyone has attained the summit of greatness, he kicks away the ladder by which he has climbed up, in order to deprive others of the means of climbing up after him."

This is not about trade, tariffs, subsidies and the power plays involved in that internationally, but you have a strangely similar problem with the IMF as a union of many nations of various economic strength, and by extension various ability to leverage others in the union to do what they want you to do.

List was sardonic in his criticisms of the British use of its trade policies and protectionism to strongarm its partners into line, to kick away the ladder and hold the summit alone. When it comes to trade, List cautioned readers not to listen to what the British said but rather what they did (which in the double speak language of free trade sometimes involves doing the exact opposite of what you say).

As it turns out you should probably do the same with the IMF. The words don't mean anything. Their track record speaks for itself and you decide who has benefited or lost the most from that.

n97 mini

Godge wrote: »

The difference is about the same as saying Michael O'Leary is chief executive of Aer Lingus. If that is a small difference....

Terrible comparison. A far more accurate one would be HSE and Dept of Health.