Amid much fanfare and hype, the Government’s first ever Spring Economic Statement was pronounced.
This statement was presented as fulfilling part of the Government’s EU reporting obligations, setting out the progress to get the deficit and debt within EU limits.
But it seems it was more of a reminder of the horrors from which we came, rather than outlining key changes to economic strategies for the coming years.
Indeed, the foreword to the 48-page document focuses almost exclusively on the economy at it was in 2011, and the improvements that have come about since then.
Not to deny credit where credit is due, it is worth acknowledging and even celebrating Ireland’s economic growth rate, which stands at 4.8%, the envy of Europe, and an increase in jobs, up 95,000 from 2012, coupled with a reduction in unemployment by 5% since peak.
But the critic in me can’t help feeling that the credit for job growth should however be laid squarely with each and every employer who has borne the risk, taken the chance, and provided each one of those extra jobs.
Undoubtedly, a stable economic environment adds greatly to the confidence an employer needs to create employment, and credit is due to our political leaders for keeping that ship steady.
Credit is due for policies such as JobBridge, introduced in 2011 by this government. This scheme has the double benefit of providing interns with a route to gaining experience, and provides employers with the opportunity to get to know prospective future employees.
The scheme has however been marred by controversy, with allegations of unscrupulous employers seeking to hire de facto employees at an cost of just €50 per week.
Indeed, a quick review of the current profile of internships available shows the calibre can be pretty low, with ‘training opportunities’ for candidates to gain experience in a variety of roles ranging from vegetable preparation to bicycle repair. It seems implausible that anyone would need a six or nine month internship to gain sufficient experience as an intern, before becoming worthy of employment.
JobBridge is vastly under-represented from a farming perspective, with just four commercial farming internship positions available across the entire country.
Still with farming, the Spring Economic Statement seems scant in exploring the role that agriculture has, apart from references to Food Harvest 2020.
In launching the Statement, Finance Minister Michael Noonan did however make reference to the ‘tax changes to support farmers gearing up for the ending of the milk quota’, and credit is due for the positive reforms arising from the agri-taxation review, such as a supportive agricultural relief regime, the introduction and enhancement of farm consolidation relief (allowing farmers to consolidate their land holdings), and the widening of the income tax exemption for leased land.
Critically, the government has chosen not to introduce, or more correctly, re-introduce previous successful schemes such as the accelerated capital allowances for farm waste management building works, which allowed farmers to claim the cost of building works over as little as three years.
With the abolition of milk quotas, the opportunity to assist dairy farmers looking to expand has almost passed without any effort to grant enhanced stock relief, or transfer existing tax benefits from milk quota to milk production shares.
From an economic policy perspective, there is no mention within the Statement of the volatility of food market returns, or the input cost volatility that farmers face, let alone the sharp decline in dairy markets since late 2014.
On banking, the Statement does reference the move to “state-sponsored vehicles”, namely the Strategic Banking Corporation of Ireland (SBCI), before drifting into vagueness about how the government “will continue to explore ways of improving credit supply, including through non-bank sources”.
In the public forum, there seems to be little effort either, by the government or indeed the Central Bank, in bringing new competition into the market. Competition can come from external sources by transitioning global players into Ireland, or by providing a supportive regime that would allow existing companies (such as co-ops or insurance firms) an easy route.
The Statement is suggested as a first step, with the next phase being the National Economic Dialogue, part of the pre-Budget planning.
From my perspective, it’s a pity the Spring Statement didn’t contain a little more detail on economic policies which the Government hopes to introduce over the medium term, this would be useful, facilitating contributors in the next phase to support, object or offer alternative policies.
Similarly, more detail within future economic statements directed towards agriculture would be useful, it being Ireland’s largest indigenous industry.
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