Behind those dazzling growth statistics there is a lot to be uneasy about
growth record in 12 months to November is something else Enda & Co. may trumpet.
The problem is that this sounds too good to be true – and it is. In fact, boasting such a high figure does as much to undermine our economic credibility as it does to enhance it. It sends out a signal: there’s something fishy going on.
Our figures are inflated by multinationals, which do all sorts of financial jiggerypokery to manipulate their finances and minimise taxes.
Among other things, they transfer billions in profits through Ireland and then on to some other tax haven.
The 7% annual hike in Gross Domestic Product includes profits that are shipped off somewhere else. A more reliable indicator is Gross National Product, which strips out the billions transferred abroad every month. When you do that, GNP actually declined in the third quarter of last year.
But it did grow by 3.2% in the 12 months to November and that is still among the highest rates in Europe.
The coalition deserves some credit for helping to achieve this by sticking to its guns in the austerity crisis.
Labour has paid a heavy price for it in the opinion polls. So it might take note of other new figures this week showing 318,000 jobs – one fifth of private sector workers – have been created by multinationals.
It could protect its flank by highlighting the hard left’s policy on multinationals, which is, frankly, bonkers.
While its stance on water charges may be popular, I doubt many would agree with TDs Ruth Coppinger and Paul Murphy’s stated fondness for nationalising multinationals.
What would we do with Apple – change its name to Úl? And how many eirPhones would we sell? Not that many, with Ruth and Paul in charge, I suspect.
While the coalition may have done just enough to win the election, there are plenty of pitfalls ahead. The markets are in turmoil once more amid fears of a global downturn – one that we would not be particularly well set up to cope with.
Our national debt is over €200bn – five times what it was in 2007.
We’ve tinkered with public sector reform. But average pay there is still 44% more than the private sector.
And the golden goose of our multinational sector is under threat from a new international tax system that quite rightly would see companies pay up where they earn their money rather than in some remote island.
If tax were allocated on this basis, it would slash profits supposedly made here by the pharmaceutical sector by 95%. Meanwhile, we’re fuelling tax cuts and spending increases on the back of a possibly unsustainable income source. Sound familiar?
The upcoming election may have come too late for the anti-austerity movement as the recovery takes hold. Yet its time may yet come the next time around if a fullblown crisis erupts again.