News Reports of Tax Cuts are Deeply Flawed

Nat O'Connor: Reporting of taxation issues is very flawed in Ireland. From before Christmas, we had reports like: "Income tax may be cut in the next budget for 'certain groups'" (Irish Times). All the way up to early May, the news media carried stories like: "Middle and low-income families have been promised tax cuts by Finance Minister Michael Noonan in his strongest comments yet ahead of October's Budget." (Irish Independent)

The local and European elections took place on Friday 23rd May, and the tune changed: "Minister for Finance Michael Noonan has said Ireland has limited room to ease Budget cuts of €2 billion to be outlined later this year." (RTÉ news)

Change of spin is not unusual for politicians. Even if a Minister is simply getting on with his or her work, the back office PR team will seek to make the best out of news items to manage expectations while maximising support for their party.

Yet, there are grounds to question the quality of reporting on the topic of taxation. Speaking at a TASC lunchtime seminar about the social market economy model, Dr Dieter Benecke noted that one of the key requirements was that journalists are well-trained in economics and can pose serious questions of policymakers. Similarly, at a recent TASC Nordic Models seminar, a number of Nordic speakers reinforced the point that a strong media is vital to the operation of their systems.

What is required includes investment by media organisations in investigative journalism, data journalism and in the tedious detail of public administration - as well as sufficient staff well-training in economics and public finances.

The problem - and the above links are only a few of many examples - is that every word the Minister utters is seized upon as a hint about the next Budget. Or the Minister's words are built up in a way that feeds expectations among voters for a tax cut or some other concession.

However, the sad reality is that the economic damage done to Ireland is far from healed. On the contrary, the tax system is hollowed out by tax breaks and social insurance is incredibly weak in European terms; personal and business debt is high and its sustainability is too often unresolved; prices - not least housing - are again moving above what's affordable; banks are still dysfunctional; public services are starved of cash and creaking at the seams; poverty and deprivation are rising; and real wages stagnate and joblessness continues to be far too high. Yes, some parts of the economy are going well - there are hundreds of thousands of people with 'good jobs' and high pay. But the vast majority, millions of people in Ireland, live a very different reality. That's the message from the European and local elections.

Economists such as the ESRI's John Fitz Gerald and UL's Stephen Kinsella concur that a €2 billion budget adjustment is likely in October (RTÉ news). There is - as the Minister most recently said - "limited room" for tax cuts.

Whose job is it to provide the public with clear data on taxation and public spending? The civil service have been providing the same kind of Exchequer Returns and Public Spending Estimates for decades. They appear to limit their public role to providing the documents and figures, requiring users (e.g. politicians and their staff, business and academic economists - and citizens) to develop the requisite knowledge and expertise to use this data. Recently, small improvements have been made through the provision of data in Finance and PER's online databases.

On the media side, most of the focus seems to be on reportage and opinion rather than analysis of either the true state of Ireland's tax system or the economic and social implications of tax cuts and the lost public service to fund those cuts. For another point of view, see TASC's Defence of Taxation.

Dr Nat O'Connor     @natpolicy

Nat O’Connor is a member of the Institute for Research in Social Sciences (IRiSS) and a Lecturer of Public Policy and Public Management in the School of Criminology, Politics and Social Policy at Ulster University.

Previously Director of TASC, Nat also led the research team in Dublin’s Homeless Agency.

Nat holds a PhD in Political Science from Trinity College Dublin (2008) and an MA in Political Science and Social Policy form the University of Dundee (1998). Nat’s primary research interest is in how research-informed public policy can achieve social justice and human wellbeing. Nat’s work has focused on economic inequality, housing and homelessness, democratic accountability and public policy analysis. His PhD focused on public access to information as part of democratic policy making.