Business Irish

Tuesday 23 April 2019

Richard Curran: Shrinking dole queues show how far we have come in five years

People queue at a social welfare office at North Cumberland Street in Dublin in 2009. Photo: Damien Eagers
People queue at a social welfare office at North Cumberland Street in Dublin in 2009. Photo: Damien Eagers
Richard Curran

Richard Curran

It has been jobs galore since the worst days of the crash - or so it seems. The numbers on the live register have hit their lowest level since August 2008, according to CSO figures published during the week.

It was a nervous summer that year just weeks before the bank guarantee and the subsequent economic meltdown. We all knew there was a storm coming, but didn't realise how bad it would become.

A lot has changed since the employment low point that came around 2012. CSO figures show there are now around 212,000 more people working in the economy than there were five years ago.

We are still not building enough houses but there are now around 49,000 more people working in construction than in 2012. In agriculture, forestry and fishing the rise is a more modest 13,000 additional jobs. Education jobs are also up around 13,000 in five years.

The most modest gains of all have been in financial, insurance and real estate sectors where the increase has been just 3,600. Technology, bust banks, bust estate agents and insurers cutting back have all held back employment gains in this sector.

Perhaps one of the most surprising things about the change in job patterns is that we now have nearly one-third of a million people who are self-employed. The figure is up by 36,000 on five years ago.

The vast majority of these do not have any employees working for them. The steady increase not only reflects an improving economy, but it also goes some way to explaining the Department of Finance's underestimates on income tax receipts during the year.

Here we have around 326,000 people filing their tax returns at the end of the year. This significant rise in the self-employed also comes at a time of heated debate about precarious employment and the gig economy.

The overall employment figures give some comfort that jobs are being created around the country and not just in Dublin.

For example, there are 25,000 more border county residents at work than there were five years ago.

In the south-east, another employment black spot during the recession, there are 25,000 more people at work.

The problem is these figures come from the National Household Quarterly Survey which tells us how many people in each region are working, as opposed to where they are working. The job might not be in the region where they live.

So lots of people living in border countries, the south-east and other areas could be working in Dublin and commuting.

It is a useful indicator but it doesn't give the complete picture of where jobs are being created.

Nevertheless, the live register figures out this week show there were 141,000 people signing on in November 2017, compared to more than double this figure, at 308,500, in 2012. Now that isn't bad going.

Tracker scandal accountability same as breath test debacle

It is almost part of the national psyche in Ireland to think the worst when it comes to how banks treat customers. Yet, the worst conspiracy theories don't always stack up. Take the tracker mortgage scandal.

Thinking the worst about unscrupulous behaviour was spot on the money, but was there an orchestrated co-ordinated industry-wide campaign to shaft tracker mortgage customers in the same way? I don't think so. And neither does the chairperson of the Competition and Consumer Protection Commission, Isolde Goggin.

She told the Oireachtas Finance Committee there was no evidence of any breaches of competition law by banks in relation to the tracker mortgage scandal to warrant a criminal investigation.

When asked by Sinn Fein's Pearse Doherty whether her agency had any suspicion of cartel behaviour between the banks over trackers, she said the agency "cannot go on a fishing expedition" as it would be thrown out of court.

Goggin rightly pointed out that it was in the banks' interest to get people off trackers which were costing them money.

Normally a cartel operation is about stopping competition. In other words, a group of companies conspire by offering the same thing as a deterrent to going anywhere else.

The tracker mortgage case was quite different.

Customers caught up in it didn't really have anywhere else to go with their mortgage and they would not have been able to get a better deal or a tracker somewhere else, because this loss-making product had been stopped.

The banks had a financial incentive to treat their customers as they did, and their behaviour was appalling. But it seems more likely they didn't have to conspire with each other to really shaft their customers. They were quite capable of coming up with this on their own.

However, not everything was the same in every bank when it came to how they handled their tracker customers.

Different decisions were made by individual bankers and executives about particular cases. Individuals in control of the banks made decisions to legally fight cases where it was obvious they had behaved extremely badly to their customers.

When the jig was truly up and the redress scheme was forced on them, some banks held out longer than others in adopting a very narrow focus for compensation. Some were quicker than others to put their hands up.

The Central Bank will take its enforcement actions resulting in meaningless modest fines for banks.

But a bit like the Garda breath test debacle, don't expect much by way of individual accountability.

Ireland may become the meat in the US/German tax sandwich

Less than a fortnight ago, we had the president of the most powerful country in the world name-checking Ireland for facilitating major corporations to avoid tax. It wasn't the first time Donald Trump mentioned Ireland in this context.

Then during the week we have the kingmaker in a new government in the biggest economy in Europe, saying the same thing.

Martin Schultz, leader of Germany's Social Democrats (SPD) took aim at Ireland while criticising Apple, Facebook and Google last Thursday. He told a congress of his party that Ireland was complicit in allowing companies like Apple to avoid billions of euro in tax.

Schultz may have been playing things up as he tries to convince his party to enter a new coalition government with Angela Merkel, but he has form on this subject when it comes to Ireland.

All of the solidarity being shown towards Ireland in the Brexit Border talks, may well be a favour that senior EU figures will want to call in, when it comes to tax harmonisation or new approaches to how technology companies are taxed.

This comes at a time when our Exchequer appears to be more dependent on significant and growing corporate tax revenues to balance the books.

Rather than have Trump on one side and Brussels on the other, we may have more to fear from the solutions being proposed by politicians like Schultz. He wants to see the creation of a European finance minister, who should fight tax evasion by reining in the race to the bottom in tax policy among member states. A similar call surfaced in a European Commission reform agenda on Wednesday.

Changing tax rules in Europe is a slow process but the model that has delivered jobs, investment and tax revenues for Ireland is getting squeezed and we should realise it.

Sunday Indo Business

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