‘More is best’ mantra fails if the pub­lic feels left be­hind

Irish Independent - Business Week - - Front Page -

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.

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