The Irish economy is not going to recover to where it was in 2007, economist Colm McCarthy has told the National Economic Dialogue.
Mr McCarthy also there was a big job recovery in Dublin and other big centres, but not elsewhere.
He referred back to the Buchanan report from the late 1960s which recommended industrial development in about 10 centres. At the time, the report had “been accepted with horror” said Mr McCarthy and a ’counter-report’ by the IDA had identified 160 towns or industry.
“We had advance factories in Cahirsiveen,” he said.
The economist said we were now having a de facto implementation of Buchanan.
“It’s bad news for small time Ireland. Small towns had factories 20 years ago. I cannot see the tech firms (which are) booming in Dublin and (other big centres), I can’t see how you can get them to locate in a small town,” he said. He suggested their future may be as commuter towns.
Mr McCarthy was speaking at one of the break-out sessions – entitled Working for the Best, Preparing for the Worst – examining challenges to Ireland’s fiscal and economic development.
It was chaired by Minster of the Environment Alan Kelly and attended by representatives from business and industry, unions, the environment, and agriculture. The rapporteur was economist Stephen Kinsella from the University of Limerick.
Long-term planning
The session, which lasted over three hours, covered a wide range of issues, with contributors suggesting more focus on long-term planning, with far more transparency and detail in Government financial accounts. Mr McCarthy described the current reports as “tennis club accounts”.
Other big themes pursued were the status of the euro, the treatment of Greece by the EU, and the risks associated with either an exit and Grexit. The environmental pillar argued that Ireland should reduce its dependency on beef production with Green Party leader Eamon Ryan arguing for more ambition in climate change targets.
There were some clashes, particularly over water charges and the property tax. Mr McCarthy said Irish socialists were the only ones in the world opposed to a property tax. Jimmy Kelly of the Unite union responded that in budgets the rich got richer, and ordinary people sensed they were not being treated fairly with the property tax.
Tom Geraghty of the Public Service Executive Union said that he was concerned if the State slipped back into this mode that it was “possible to have a low-tax economy, Texas rates of tax but Nordics standards of service”.
More modern
Mr Ryan argued Ireland needed a more modern public service. He said the service was too conservative and did not full take cognisance of the energy and digital “revolutions”.
“The sclerotic hand of the Department of Finance is there. Everything is determined by budget and budget numbers and not by the bigger vision.”
Mr Geraghty challenged Mr Ryan’s assessment, saying the adaptability of the public service had been instrumental in the recovery.
Sharon Higgins of IBEC argued that income tax rates in Ireland were high. She said there would be a population growth of one million per decade and the population in 2050 would be 50 per cent higher than now.
That would mean Ireland, an island nation, would need to continue to focus on high growth economy and being a high jobs economy.
