Jean Baptiste Colbert (1619–83), Minister for Finance to French King Louis XIV reputedly said: The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.

It generally works because politicians get away with blather on income tax and stamp duty without being challenged by voters or journalists on so many other taxes.

Just have a look at the car price image above and wonder why is there such a big add-on for Irish motorists?

Jobs and Churn 

When clichés such as "the thin end of the wedge" and of "paramount importance" were popular with politicians who had little to say, the word churn referred to a container used by a farmer to deliver milk to the creamery or a vessel used to make butter. Then it gained currency in financial services. Now it has become a handy word for describing an inevitable job shakeout when there's no need to deal with the actual facts.

The closure by US mobile phone company Motorola of its software centre in Cork, with the loss of 330 jobs in the political constituency of the Minister for Enterprise, Trade and Employment Micheál Martin, was one of the main items on RTÉ Radio 1's Morning Ireland programme, last Friday, March 09.

The loss of what Martin often terms "high calibre jobs," required some soothing words and the Minister referred to many IDA projects in the pipeline and the strong economy that produced "86,000" additional jobs last year.

It was a good point to make and just over two hours later on the same channel, a journalist on the Today with Pat Kenny programme, spoke of "churn" in the economy and the magic 86,000 figure was again produced, without any breakdown.

An IDA Ireland spokesperson, presumably press-ganged by his political masters, also resorted to the mot du jour "churn," saying that job gains and losses is normally around 6% of the total at any time.

UCD economist Moore McDowell was also in a "what crisis, there is no crisis" mode, when he told the Sunday Independent: "In a very cold, dispassionate manner, the loss of these low-skilled jobs is in one way a good sign that Ireland is moving up the development spectrum, into truly high skilled jobs.

"This is a natural progression for the economy. It's when the likes of Intel and Google decide to pull out that we should worry about the state of the economy."

Quite so. Natural progression it may well be but when the fastest growing Irish-owned tech company of this decade is considering moving overseas, should we be concerned?

Neither does the natural progression suggest that we will replace all jobs lost as Developing Countries are increasingly the location of choice for R&D centres established by multinational companies.

The Minister, Micheál Martin spoke on Friday on The Right Hook programme on Newstalk 106 of upskilling and multiskilling. The number working in Irish construction has grown from 126,100 in early 1998 to 281,000 in late 2006. So there is quite a task and it's not that we can wave a wand and have most of the workforce employed as research scientists.

Now for the facts:

The policy advisory agency Forfás, which reports to Micheál Martin's Department, said in January that employment growth in the Irish economy continued to increase in 2006, with construction, public administration, education and health accounting for 53,000 of the additional 83,000 jobs in the economy. During 2006, employment levels supported by the development agencies (Enterprise Ireland, IDA Ireland, Shannon Development, and Údarás na Gaeltachta) increased by 5,927 to 305,062 – 2,913 permanent full-time jobs in foreign-owned companies, and 3,014 in Irish-owned companies.

Against a backdrop of a strong local economy and a global economy that has been experiencing the best period of sustained economic growth in forty years, the 7% slice for jobs in the foreign-owned sector and Irish firms in manufacturing and internationally traded services, is hardly impressive.

Nevertheless, expect to hear more about "churn" and when the business sector itself, conflates the performance of the foreign-owned sector, which was responsible for 92% of Irish exports in 2006 with that of Irish-owned firms, separating myth from reality becomes even a more difficult task.

* The "86,000" figure used by Martin, comes from the CSO's Household Survey that was published on Feb. 22, 2007.

Pensions

The issue of pensions was another one that was distilled into a soundbite in February when PD leader said he supported an increase in the State pension by nearly €100 per week if elected into Government.

Dispensing lollipops is easier than providing a credible response to a situation where 900,000 Irish private sector workers have no occupational pensions, while those in the rest of the private sector who do could never match public sector pension that would require funding of 28% of annual salary for forty years.

The Challenge for the Media

It's easy for the media to join in the soundbites' debate dictated by the politicians.

However, will any politician be pushed into answering credibly what would the response be to a fall in tax income from property that amounted to 17% (direct only) in 2006? Besides, there are many further issues that would move beyond lollipop lists and soundbites.

How about probing the issue of accountability or more likely the lack of it in Irish public governance? - See - Ireland 2006 - A Banjaxed System of Public Governance where the Buck Stops Nowhere.

Fionnán Sheahan, who is now a political correspondent with the Irish Independent, wrote the following in the Irish Examiner, one month after the last General Election in 2002:

Health Minister Micheál Martin’s jargon-filled €13 billion prescription to cure the ills of the health service was launched with great aplomb at the end of last year. It was people-centred, multi-disciplinary and would be monitored and evaluated in a designated, cohesive, integrated, focused, coordinated framework and approached with capacity, efficiency and equity.

Anybody remember the Programme for Government? It emerged during the general election, before the World Cup, the Roy and Mick spat, the miserable summer and the FAI’s pie in the Sky deal, and it pledged to target inequalities in the health service.

Yet, just months later, it costs more to get private health insurance, you get less of a subsidy from the Government for your prescription costs and it costs more to go to an Accident and Emergency ward. Monitor and evaluate that for the equity.

And already since the start of the year, it costs more to go to the doctor because GP fees are one of the services identified as having displayed “unusual price increases” during the euro changeover. In other words, family doctors took advantage of the euro changeover to jack up costs per visit, and got caught by a price survey by Forfás.

The VHI premium increase may have captured the most attention as it added up to €400 onto the cost of a family’s health insurance, but it wasn’t the only move that will add to your health care costs.

Last Friday night, when the Taoiseach went to war with the FAI telling them to tear up their lucrative deal with Sky, an announcement that will affect many families quietly drifted out from the Department of Health.

The threshold for the drugs payment scheme was increased by 22%. Minister Martin’s reduction in the State subsidies for drugs means patients with already big medicine bills will have to pay €63 of their monthly cost, a rise of €10. And while we’re dealing with tenners, the charge for attending the Accident and Emergency unit, without a doctor’s note, went up from €30 to €40.

As an aside to the increase in the VHI cost the other night, the minister threw out two other signs that the old coffers aren’t as flush as they should be. Patients will be charged an extra €3 for an overnight or day stay in a private bed in a public hospital, pushing the cost to €36.

And while we’re dealing with round figures, 800 of the 6,000 additional jobs sanctioned for the health service have been scrapped. But most of these were management and administrative positions and their non-appointment will have a minimal impact on patient services, the minister said.

That’s all right then. What difference would a few hundred managers and clericals make anyway? Makes you wonder though, if they weren’t that vital, why were they being appointed in the first place?

Now we get to the interesting part. Basically, despite the pronouncements that health is the top priority for this government, the Department of Health is as prone as any other department to a spot of belt tightening.

In the never-ending quest to balance the books and achieve a small but morally significant budget surplus, Finance Minister Charlie McCreevy has told his cabinet colleagues to slash and burn their budgets.

Apparently, only the health department is exempt from the cost-cutting drive. Strange then that in the space of a week, four separate cost-cutting and revenue-increasing exercises have been announced. Maybe the budget isn’t being cut but it has to be stretched to the limit for the rest of the year as there isn’t going to be any further hand-outs.

Don’t be fooled by the jargon. To put it plainly: There’s a lot of cuts done, more to come.  

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