‘More is best’ mantra fails if the public feels left behind
IRELAND’S growth is amongst the fastest in the world, our job market is booming, our population is growing and the era of austerity is finally at an end. Against this backdrop, the Government has published an ambitious but welcome National Development Plan and National Planning Framework and set up a Delivery Board to manage our journey to 2040. What can possibly go wrong?
Sadly, there remains much that can go wrong and though Ireland’s new prosperity is welcome, it brings a new set of challenges.
The ‘to-do’ list is extensive given the constraints of the last decade and while Ireland’s growth may be fast, not all the dials are in the green.
n Liveability: Dublin’s ranking of 41st in the ‘Economist’s’ Intelligence Unit’s Global Liveability Index reflects the progress still to be made. Australian and Canadian cities dominate the top 10 in the liveability rankings, holding six of the top 10 spots, though Dublin is ahead of both New York and London.
n Debt: National debt per person is still very high by international standards (and little changed from a decade ago), equating to c€40,000 per person.
n Equality: Many places and people have not yet enjoyed the fruits of the ongoing economic recovery and have begun to voice their frustrations and concerns.
n Public services: Public services remain under extreme pressure, partly due to the funding constraints of recent years and partly as a result of increased demands due to demographic pressures.
n External risks: Brexit and the global trend towards more protectionist policies, shifts in global tax policy, and increased competition from fast-growing emerging nations are just a selection of the many risks outside of Ireland’s control.
There is much to commend in the National Development Plan and it has, thus far, been broadly embraced. Like almost all development plans, it starts from a premise that ‘more is better’. More people, more jobs, more wealth, more success. This seems an obvious approach and surely one that everyone would support?
Recent evidence suggests that we need to qualify that statement by saying that if people are left behind or if their quality of life suffers, then they will not be persuaded that more is indeed better. The Brexit vote and the election of President Trump are just two examples of where the public were not convinced with headline growth and reflected rather more on their personal circumstances and signalled that the current direction of travel was not working for them.
The OECD’s ‘How’s Life’ surveys reflect what matters to people and the Irish list is topped by Life Satisfaction, Health, Work-Life Balance and Education. If the queues at A&E grow, if commuting times get worse, if parents cannot find their child a local school place, then there will be dissatisfaction with Government performance, regardless of how fast the economy is growing. In fact, increased social tensions can emerge that can be extremely hard to reverse and recent evidence suggests, are not picked up on until it is much too late.
Ensuring that the vision for Ireland 2040 is achieved in an inclusive manner and in a way that the public at large feel part of it, therefore, a challenge. As we head towards Budget 2019 and the NDP Delivery Board start to put their plan into action, there are a number of points to consider: deficits and the pace of demand, that will not be possible. But a tight rein will need to be kept on overall spending. The Irish tax base remains narrow and the debt stock would prevent the next crisis being addressed in the same way as the last.
Capital investment is usually the tap that is turned on and off in response to the economic cycle. There needs to be a commitment to avoid this happening in the future. There will be economic cycles on the road to 2040, and infrastructure investment needs to be considered alongside all other current spending commitments when responding to the national fiscal position. After all, infrastructure underpins the ability to deliver all other public services.
Economic prioritisation: increasing competition and dampening construction inflation fears. The National Roads Authority (NRA) successfully adopted this approach for its PPP Roads Programme in the 2000s.