Monday 19 March 2018

Think-tank's economic blueprint a step in the right direction

Finance spokesman Michael Noonan
Finance spokesman Michael Noonan

We all enjoy beating up the government. They do a lot of things incredibly badly, and it isn't hard to find incompetence when we look for it, especially when it comes to economic policy (a policy is a course or principle of action adopted or proposed by the government, for example, the policy of repaying all bank-related debts). Policies can be good, they can be bad, and the role of policy in Irish society is often not well understood, even by the people who are supposed to implement these policies. What the government does is important, its decisions affect millions of us, and critiquing aspects of the government's performance is critical to a functioning democracy. The fact that we can criticise, analyse, and even lampoon our leaders is often taken as proof our society is doing well.

But it is often too easy to overlook moments when the government or its civil service does a good job. One crucial aspect of economic reform is estimating the likely effects of policies on the economy before they happen. Say you want to drop income taxes by 5pc in one year, or introduce a wealth tax, or increase female labour market participation by 10pc over three years. How would this actually work?

Every one of the reports into the economic crisis reflected on the lack of technical ability to do this work within the government and recommended the capacity be built up over time by subsequent governments.

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