Tuesday, 11 December 2012

TASC's more detailed response to Budget 2013

Nat O'Connor: TASC's more detailed response to Budget 2013 is here.


Paul Hunt said...

You forgot to mention the (approx.) €300 million extra a year that electricity and gas consumers are being forced to pay to finance the antics and ambitions of the ESB and BGE - as a result of a combination of long-standing energy policy, regulations and the commercial strategies of these paragons of semi-statism. This is a brutal regressive implicit tax.

Oh, but, of course, this isn't in the budget because it's an implicit tax - so it's not relevant here.

How very convenient.

Nat O`Connor said...

@ Paul Hunt

I don't necessarily agree with your €300 million estimate, but I do agree with you that consumer prices are important. As people's incomes are tightened by successive budgets, the issue of price control and regulation will be increasingly important.

Not only energy, but transport prices (e.g. Dublin Bus increases of over 30% this year!) among others need to be more transparently regulated.

Paul Hunt said...

Hi, Nat,

You have all the evidence you might need for most of the €300 million here (from p18):

BGE's share is a bit fuzzy, because it, unlike the ESB, does not publish its summary regulatory accounts. The ESB's transparency in this matter is an abberation for a semi-state - and one that I suspect it regrets.

You also make it sound as if the CER and the officials in the Department for Transport responsible for transport regulation are not doing their jobs properly. I'm sure that's not your intention, but I can assure you they are performing their jobs with supreme professionalism and with the utmost integrity in complete compliance with long-standing government policies - irrespective of the politcial complexion of those around the cabinet table.

In the context of a sustained determination by all governments not to contribute one cent to the financing of network investment - either directly or indirectly via reduced dividends - or to contemplate alternative efficient financing of the networks and the other businesses, the CER has no option but to levt this implicit financing tax. Similarly, in the context of a reduced public subsidy to the bus service and an unwillingness by government to contemplate alternative more efficient financing, those responsible for transport regulation in the DoT had no option but to authorise these fare increases.

Previous governments didn't address these structural and financing issues when they had cash coming out there ears. Now a cash-strapped government has pianted itself in to a corner and it has neither the guts nor the gumption to do the right thing.

And so the majority of final consumers and service users will be gouged to compensate for the government's lack of guts and gumption - at a time when most are least able to endure this gouging.

Paul Hunt said...

"TASC is an independent, progressive think-tank promoting equality, democracy and sustainability in Ireland through evidence-based policy recommendations."

The evidence basis cuts both ways. It is just as, if not more, important to examine the evidence demonstrating that existing, long-standing policies are failing - and imposing excessive and unnecessary costs on citizens and the economy - and to advance remedies as it is to advance progressive policies based on evidence.

I have being trying to draw the attention of the relevant Irish authorities to the long-standing, cumulative failure of specific energy sector policies for the last 9 years. My efforts have been hindered along the way by obfuscation and the failure to release data that should be in the public domain. However, I have been able to assemble over time sufficient evidence to demonstrate irrefutably that these policies have failed and continue to fail.

There has been sporadic media interest, but it was never sustained. All it needed was a Minister to say 'boo' and they ran for cover. I was highly amused when there was a post linking to my paper and some limited media coverage on Irish Economy:

It attracted a total of 7 comments. Five were appreciative. None contested the evidence I presented. And two sought to distract readers' attention by linking, resp., to a public announcement by DG ENER and to an essay on the experience in Britain.

It is a classic, quintessentially Irish approach of seeking to avert one's eyes to avoid confronting the evidence in front of one's nose - and to seek to highlight something else - anything else - to distract attention.

Since the implosion of the 'double-bubble' it has proved very convenient for the relevant Irish authorities to claim that policy and regulation in the areas of bank supervision and financial services was totally deficient. The implication, which is totally false, but extremely convenient, is that policy and economic regulation in all other sectors remains 'world class' and in line with 'international best practice'.

Nothing could be further from the truth. I have demonstrated that key aspects of energy policy and regulation have failed, and continue to fail. There is no shortage of evidence that policy and regulation has failed, and continues to fail, in other sectors, but in the face of official obfuscation and deliberate failures to release data it would require an enormous amount of time and effort to demonstrate these failures irrefutably.

Most citizens have little understanding of the complexity of policy, regulation and the commercial arrangements in the sectors subject to varying forms of economic regulation. Nor would I expect them to. They rely on the public representatives they elect, on the governments these in turn elect to ensure the enactment of appropriate legislation and on the officials appointed and empowered, on foot of this legislation, to make decisions on their behalf in the public interest.

In the Irish context, I find it unsurprising, but, by turns, highly annoying and amusing, that we have an 'independent, progressive, think tank' that appears to have absolutely no interest in examining these manifest failings of policy and economic regulation and in proposing remedies.

Paul Hunt said...

The deafening silence, when I raise issues such as those I've raised above, is truly eloquent.

When confronted with complex policy and economic regulatory issues, citizens rely not only on those they elect and the officials appointed via the process of democratic governance, but also on the media and on those, either individually or in some form of association, with knowledge of and competence in the sectors where these issues arise.

The media, because of either lack of resources or a general unwillingness or laziness, fails totally to investigate and report on the process of policy and regulation in the various economic sectors that impact on citizens' daily lives. The government apparatus commands almost all the resources and has an army of professionals in a wide variety of disciplines at its disposal. Most academics are conflicted, constrained or compromised in some way - or are burdened by out-dated ideological baggage. Genuinely independent voices, presenting analysis based on facts and evidence, are vanishingly rare. And the share weight of resources deployed by the government apparatus - and the faux 'consensus' that is generated and sustained - makes it easy to ignore, suppress and smother any independent voices.

In this context, the failure of this self-declared 'independent think-tank' to tackle issues of pressing concern to the vast majority of citizens (at a time of severe economic pressure) is totally reprehensible. It is even more reprehensible as the Atlantic Pholanthropies funding is being would down that limited funds are being allocated in such a futile manner.

Paul Hunt said...

The contrast between Tasc's eagerness to advance Budget proposals and to critique Budget provisions and its determined unwillingness to address this ovecharging of electricity and gas consumers is not surprising. This overcharging is an implicit regressive tax. It is implicit tax because it is being imposed without the informed consent of citizens' elected representatives. As a tax, it is having a fiscal impact as much as any provision in the Budget about spending and taxation. Indeed, it is having a greater fiscal impact than any single provision in the Budget.

In my view, Tasc has two options:
1. Assert its independence, beef up its competence and capability and tackle this implicit, regressive tax; or
2. Advise Atlantic Philanthropies that it is no longer able to operate as an independent think-tank, hand back the remaining money and survive by providing consulting and research services to those whose vested interest in maintaining this implicit regressive tax has totally destroyed its asserted independence.