Saturday, April 11, 2009

Celtic Tiger licking its wounds

The Irish economy is suffering even more than most at the moment. It's forecast to contract by a staggering 8% this year. I'm not convinced that the Irish Government's harsh approach to public spending is the right path, particularly when all their neighbours are taking the opposite approach. Time will tell, but it would make sense for the Irish as well as us to be investing in green jobs and infrastructure and try to get their economy on a more sustainable footing for the future.

Two stories relating to Ireland catch my eye at the moment. Apparently we have been overpaying the Irish by a good £135 million in 2007. The Irish Exchequer will be getting 200 million euros less than it expects for 2008, which given the precarious state of their finances, is not helpful. This isn't great news for us either, and we need to look at why our tax and NI system is so over complicated and rubbish that it makes so many mistakes. We all know how so many families are being pursued to repay overpayments of tax credits which were paid to them in error through no fault of their own - and now it seems that over a hundred million pounds has been overpaid to another Government. All this at a department Gordon Brown controlled with his clunking fist for 10 years.

The Irish Government might have been able to bear this shortfall a bit better had it collected the same taxes from foreign artists in Ireland that other countries take off Irish acts on tour on their patch. Apparently if they had implemented these taxes, the Irish Government would have been 200 million Euros richer.

I don't know whether they chose not to - and they had the chance to introduce the legislation to do so as part of the emergency budget this week - to encourage foreign acts to play in Ireland when they would otherwise not have done so, but at first glance it does seem to have lost them money.

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