Tag Archive for NERI

NERI ‘Manifesto for growth’

NERI’s Quarterly Economic Observer Autumn 2015 was described at its launch as a manifesto for growth.

The economic think tank decided this year rather than doing a pre-budget submission, of which it has detailed proposals out on already, it would focus medium to longer term growth strategies and policy areas for Governments to pursue.

Section 4 discusses policies for long-run economic growth in the Republic of Ireland:

The economy’s potential to grow depends on its ability to generate productivity gains year-on-year. The Republic’s productivity growth has been falling since the 1980s.

The best way to sustain growth in productivity over the long-term is to invest in education and skills, in productivity enhancing infrastructure, and in the production and diffusion of new technologies.

We propose a set of policies designed to increase the economy’s future potential output. For example, we propose the establishment of an infrastructure bank, increased funding for research and development and early years learning, increased support to prevent child poverty, and a phasing out of most though not all government subsidies and tax breaks.

Growth in per capita output also depends on growth in employment and the number of hours worked across the economy. We propose a number of reforms to reduce barriers to labour market entry. Examples include subsidies for childcare and the gradual tapering of family supports along with income.

Budgetary projections suggest the primary government expenditure share of economic output will, by the end of the decade, be at a very low level by NERI modern historical standards. While acknowledging the need for reform of the tax system, we urge the government to reconsider its plans to cut the overall level of taxes in Budget 2016 and to take a more strategic and long-term approach to growing the economy.

The document also provides a very useful policy reforms that will increase productivity and output. This is on page 9 and 51 of the document.

The Latest from NERI on Income Distribution

Full report available at http://www.nerinstitute.net/blog/2015/08/26/new-research-on-market-income-and-its-distribution/

August 26, 2015 by Micheál Collins

The latest NERI Research inBrief examines the underlying distribution of market income in the Republic of Ireland.

Market income captures the income received by employees as earnings, the profits of the self-employed and other ‘unearned’ income including rental income, private pension income, investment income and interest income. It is in effect the pre-distribution of income; that which arises before the redistributive mechanisms of taxation and welfare step in.

The key points from the analysis, which use the latest available data which is for 2013, are:

  • The median (middle) market income was €23,701 while the mean was €32,042.
  • The distribution of market income is concentrated on incomes of less than €50,000 per annum – representing 80% of all earners.
  • 15% of all those with a market income, about 290,000 people, receive less than €5,000 (the average direct income for this group is €2,000 and most receive less than €1,000).
  • 50% of those with a market income receive between €5,000 and €35,000.
  • The top 10% of recipients have an income of more than €65,000.
  • The top 5% of recipients have an income of more than €85,000; this group approximates to the top 100,000 earners in the state.

The better is yet to come

A Social Vision and an Economic Strategy for Ireland in the 21st Century

By Dr Tom Healy of http://www.nerinstitute.net/

NERI Vision

In recent years, both parts of Ireland underwent a deep economic crisis that impacted on employment, incomes and social infrastructure. Although levels of prosperity exceed those of earlier generations, inequality in the ownership of wealth and in the distribution of income is likely to have increased – at least before taxes and social transfers are taken into account. Future trends in economic well-being are uncertain as Ireland adjusts to a rapidly changing world.  Continuing shocks in areas such as banking, property prices, unemployment and energy supply and cost – to mention only some – are likely to constitute sources of stress for social cohesion, democracy and sustainable economies.

This paper reviews the key economic and associated social challenges in the coming three decades and suggests an overarching framework to better understand:

  • Why the cycle of bust and boom has not been abolished;
  • What options and choices are open to communities in each part of the island; and
  • How synergies on an all-island (Ireland) and cross-island (Ireland and Great Britain) basis be harnessed.

The paper is intended as a contribution to a debate on our economic future and how we can achieve very different outcomes to those experienced up to now. Underlying a vision for the 2040’s is an emphasis on:

  • Human rights – economic and social; and
  • Security and sustainability of economic well-being which transcend conventional measures of economic prosperity.

This paper is not intended as a blueprint or a set model to be applied or rolled out. Rather, it suggests a different way of approaching public policy based on different norms and values – in practice – to those incorporated into public decision-making in the recent decades.

Although constituting two separate jurisdictions with very different characteristics and policy institutions, the Paper seeks to identify a unified perspective for the whole island and its relationship to the neighbouring island. This is without prejudice to the existing or future constitutional arrangements and preferences of any country or part thereof.

Author

Dr Tom Healy