We’re richer, but wealthy few have the biggest share of all

THE times we live in are “undoubtedly the most exciting time ever in the history of this island”, President McAleese said the other day.

She obviously hasn’t been listening to all the merchants of doom and gloom, predicting that tomorrow’s budget will be the start of the road to ruin. If she had, it would be sackcloth and ashes she’d be wearing, rather than going around the place telling us all that “no other generation in Ireland faced such a positive future with a warm wind at its back”.

Instead of listening to the misery merchants, she was influenced instead by the new relationship between the ever-smiling Ian Paisley and Martin McGuinness. It’s stuff we never thought we’d see, isn’t it? Ian and Martin might be the oddest couple in history — they make Felix Unger and Oscar Madison look routine — but this relationship seems to work.

It certainly moved the President to go on to make the prediction that “between us all — north, south, east and west — we have the opportunity to make this new dispensation shine, to give our children and grandchildren a blessed life, to give to those still in conflict all over the world, hope and help.”

And it’s true, isn’t it? We should be excited about where we’ve come from, not just in relation to Northern Ireland, but down here too. I was looking the other day at a little booklet called “The Wealth of the Nation”, and some of its statistics are quite simply staggering.

They’d make you believe that if it weren’t for the climate, Ireland must be the nearest thing to heaven on earth.

And by the way, “The Wealth of the Nation” is neither an academic tome, nor one of those dreadful left-wing tracts. It was written by a man called Patrick O’Sullivan, described on the cover as an “Associate Director” and published by Bank of Ireland Private Banking. They actually call it “presented” rather than published. But they’re a bit like that in Bank of Ireland Private Banking. They describe themselves on their (rather forbidding if you’re not a member) website as a “unique, exclusive and completely private service” whose goal is to help you achieve your financial objectives.

I think, mind you, that might only apply if you’re one of the “successful individuals” to whom they cater with an extensive range of wealth management services.

Alas, I mustn’t be one of them. Bank of Ireland has never offered to assign me a “Private Banking Manager“, to work with me to establish my exact requirements. Instead, the poor divil who has to manage my overdraft has to explain the bank’s requirements to me in words of one syllable. But I am indebted to them for the revealing publication that sets out just how well-off we really are.

By the end of last year, 2006, our net wealth as a country was a staggering eight hundred and four thousand million euro. This is what it looks like if you include all the noughts — €804,000,000,000.

That’s some wealth, isn’t it? And net wealth, in this definition, is measured by adding up all the gross assets of Irish households and subtracting the debts.

The gross total of our household assets is actually just under an American trillion euro, or a million, million euro if you want to be precise – that’s €1,000,000,000,000 give or take a bit of change. And those assets exceed household debts by a multiple of six to one.

On a per capita basis, that wealth puts us second in the OECD. Net wealth, for every man woman and child in the Irish economy, rose from €148,000 in 2004 to €168,000 in 2005 to €196,000 last year.

Imagine it. On average each one of us, when you tot up everything we own and take away our debts, is worth around €200,000. That would make every family of five a millionaire family. Of course, the largest single component, and therefore the major driver, of all that wealth is the residential property we own. But nearly 30% of our assets now are accounted for by non-property holdings of wealth — equities, bonds and cash. And don’t forget that most of our wealth is non-taxable.

Isn’t it great! What’s even better is that an increasing number of us have lots of cash. The number of millionaires increased by 10% in 2006 alone, and now stands at 33,000. About 3,000 of our millionaires have personal wealth in excess of €5 million, and about 300 of them have wealth in excess of €30 million. Again, alas, I haven’t made the grade there either, but I’m always hopeful.

There is another side to the coin — and it’s Bank of Ireland Private Banking that are pointing this out, not me. The reason we’re not all having endless parties with all this wealth is that it is concentrated in a surprisingly few hands. Averages might say one thing, but the real story is that the top 1% of our population now holds 20% of the wealth, the top 2% holds 30% and the top 5% holds 40%. And if you don’t count the value of housing wealth and focus primarily on financial wealth, the concentration of wealth increases — to the point where 1% of the population own a third of all the wealth.

IF WE forget wealth for a moment and look at incomes, the same thing holds good. Incomes and earning power have gone up across the board, but there is no doubt some have benefited more than others. For instance, one way of expressing this disparity in wealth and earning power might come from information supplied by the Department of Finance in reply to parliamentary questions from the Taoiseach’s allies as well as his opponents.

As a result of the information released, we now know that up to 13,000 people in Ireland earn more than the Taoiseach’s entire salary, and one and a half million earn less than his recent pay increase.

You know what all this means? It means we’ve come a long, long way. We are a genuinely rich country. Sure, the pace of growth might be slowing down a bit, but there’s still growth. Just like the progress in the North, this extraordinary growth in Ireland’s wealth, and the potential it gives us all, is something worth celebrating rather than knocking. Even if there is some tightening of the belt in tomorrow’s budget, the owners of our new extraordinary wealth can surely put up with a bit.

So why do some questions nag me so much? For instance, if there is going to be belt-tightening, why am I so certain that it won’t be the top 1 or 2% who are asked to tighten theirs? Why am I so certain that there are still going to be hungry children in Ireland this year, where average wealth per capita has risen so much? Why am I so certain that there will still be queues for essential public services, in the second richest country in the OECD? And why, in this best of all times, does so much wealth have to live side by side with so much misery?