Last week two international reports provided an interesting analysis of Irish policies to date and highlighted some scepticism amongst the international analysts as to the ability of our Government to lead the necessary reforms.
* All in billion 2009 Euro, assumed inflation: 3% pa, 15-year horizon
** ca 33% of the total value of bonds issued, plus the face value of loans purchased into NAMA
*** Ex-operating cost of €20mln pa (rising at 2% pa from 2010)
Thus, in major reports published in one week, two international bodies gave a rather forceful negative assessment of the current Government plans for dealing with the banking and fiscal crises. And yet, the Fitzgaraldo of self-congratulatory remarks from Irish public officials pushes on – ever deeper into the denial of our bleak fiscal reality.
All last week we have been hearing about the IMF endorsing Irish Government ‘austerity measures’ aimed at bringing under control our runaway train of public spending. Rhetoric aside, real numbers suggest that at least in one area – that of public sector employment – months after setting itself some modest targets for public workforce reductions, the Government is nowhere near delivering the real progress. Chart below, taken from the latest Quarterly Household National Survey data released last week, clearly illustrates the prevalence of past trends in overall employment.
While private economy employment shows catastrophic collapse in total numbers working in industry, construction, wholesale and retail services, basic repairs, accommodation and food services, administrative and support services and professional and technical support services, the same data shows precipitous rise in employment numbers across all three broadly defined public sectors.
In addition to by-now customary steady and precipitous rise in unemployment, we are also experiencing rapid withdrawals from the labour force participation as more and more people are falling into our deep welfare trap or undertake an emigration option. This trend – of collapsing employment and rising unemployment – now poised to threaten our long-term demographic dividend, or the expected higher returns to younger labour force that many of Irish policy makers and analysts close to the Government circles are so keen on referring to in their rosy forecasts.
Well, of course the public sector is rolling in the dough as we are taking a pay cut: