"A friend of Bertie is at the door, and wants to see you Eddie!"
Eddie Hobbs appeared (albeit briefly) amongst us in recent times, like a latter day Jesus Christ preaching the home truths that we all suspected,but none had the courage or wisdom to enunciate; that only the high priests,lawyers, and speculators in our society are reaping a harvest beyond the dreams of avarice,while life continues as a daily struggle for the vast majority of ordinary people.He was however,not the redeemer the people longed for,being persecuted and slandered by the Soldiers of Destiny, he abdicated his Messianic role as
"he who would save his people from their politicians".
" Woe to ye politicians who load the people down with heavy burdens,but lift not a finger to help them bear their load" (St Eddie)
Many of his followers and disciples ( former bricklayers etc) now languish in prison cells struggling to save their jobs and wage standards in the so called " New Jerusalem" heralded by King Bertram the Great. (are these the new martyrs.?)
Meanwhile some 25% of the population (the kings personal retinue and tax gatherers) are awaiting a second distribution of "loyalty money" (30 pieces of silver) despite their rebelliousness,and refusal to disperse to far provinces,in compliance with King Berties relocation stroke-er-wishes.
"How sharper than a serpents tooth, to have thankless Civil Servants amongst us" (St Bertram,bench-mark 2)
David Went, CEO of Irish Life & Permanent, recently stated that to obtain a salary-indexed pension (like our public servants have) in the private sector would require contributions of 45% of a person's salary throughout their working life!; that public servants pay around 6% of salary for their pensions ; that when consequent pension costs are included, the true cost of the last benchmarking deal was €20 billion and not €1.1 billion as is often stated.
"Blessed are ye who will suffer the road tolls; the refuse charges;the stealth taxes; and every other burden they will lay upon you, after the next election
-But your reward will be great (in Heaven.)!"
(Eddie Hobbs wrote in the Sunday Business Post)
04 September 2005
'It is reasonable to suggest that Rip Off Republic has elevated value for money into a major public debate. The issue couldn't be more serious.
Business leaders particularly those in the small business sector and consumers are correct to be worried. Regardless of one's philosophy, the success of our free market economy comes down to our ability to compete aggressively, not just abroad, but also at home. It is for this reason that I have kept the sharpest criticism for sectors that are protected whether by past traditions or legislation from free and open competition. Competition isn't the panacea to all ills, especially where there is overwhelming argument that unrestricted competition in a sector is damaging to society. But the argument against it must be overwhelming in cases where it's not allowed. This is the front line in the battle to remove restrictive practices. Lobby groups have traditionally fought behind the scenes, using the NIMBY (‘Not In My Back Yard') argument, while consumers in general have had no power. During the week, for example, an Ibec circular confirmed that many TDs requested further lobbying in support of the Groceries Order not be delivered in writing where, presumably, it would be subject to enquiry under the Freedom of Information Act (FOI). The FOI, has in any case, been diluted by a change in government policy, resulting in a drop in its use. The Ibec excuse that the TDs made the requests for phone calls or meetings because they'd already received documents in writing appears rice-paper thin.
This debate about the Groceries Order has generated the most heat. I'm totally against predatory pricing. When it happens, though, I think that it is a matter for civil action by the Competition Authority under competition law, and not for archaic legislation such as the Groceries Order. The order hits consumers by making it illegal to pass on invoice discounts. Bulk purchase discounts of up to 20 per cent are pretty typical for large shops. Imagine this: the Groceries Order 1987 so beloved of Ibec and RG Data makes it illegal for these savings to be passed to you on about three quarters of your grocery basket.
The effect of the Groceries Order varies depending on which analysis you read and who commissioned it. The pro-order lobby report tiny differences in the actual market. Both the Competition Authority and the Consumer Strategy Group use estimates on what could happen if it were removed. The acid test for most consumers, despite academic debates, will continue to be their shopping experience throughout European countries, which invariably appears to indicate higher prices at home. But the best comparison in terms of similar shopping patterns appears to be Northern Ireland, which has no Groceries Order. Despite strong currency differences, we don't see our Northern neighbours flocking over the border to shop here for good reason: it's more expensive here.
Consumers, particularly those on modest incomes, are close to the tipping-point into further debt as they try to make ends meet. Those concerned about the economy and the apparent massive wastage in public spending are right to be worried about how quickly Ireland will drift down the league of competitiveness. We're pricing ourselves out of the game. This isn't just guessing. Even large businesses especially those most exposed to global competition in the manufacturing sector have genuine concerns about holding on to existing jobs as workers demand ever-higher incomes, to counteract higher costs.
That's one of the reasons the opening programme focused on the viral effect of development land costs and the other costs associated with owning and running a home. For the record, I am not a member of any political party, nor do I hold close to my heart the doctrine of any party. I have a lot of respect for certain politicians across different parties. It doesn't matter to me which of the political forces currently aligning themselves for the next general election win, provided the leaders emerge with the right solutions.
That's why, when the dust and emotion settle following tomorrow night's programme of Rip Off Republic, the debate should move on to the complex solutions needed to address these very real problems debate by informed experts, with better minds than mine. But it seems tome that significant barriers to entering that phase remain. One of these is the understandable, but unhealthy, closeness created over the past ten years between big government, big business and the public sector unions. The idea that Rip Off Republic created an artificial mood is not just faulty thinking it is offensive to many people.
In fact, the series gave vent to what a lot of people feel. Tactics such as changing assumptions or introducing contrary reports will not change how people feel when faced with their own experiences. So-called killer facts such as Ireland's total tax take as a percentage of GNP are a case in point. They fail to address the issue of the relative value we get for every euro spent in public money.
Just look at the hospitals. If it has taken a short run of a four-part polemic to push these experiences to centre stage, then RTE as the national broadcaster has done its job, helped in no small way by many writers in the media who have been banging on about this issue for years. Additionally, attacking the messenger while an understandable human reaction is not just merely counter-productive, it is poor strategy. Focusing on the techniques used by the show to give information while engaging the audience is a bit like trying to smash the bottle after the genie has left.
Yet, I'm optimistic that there are good leaders across the political spectrum well capable of emerging to take the debate forward. It seems to me, though, that we must first move away from abdicating responsibility to media managers, and return to straight talking. People react not to what they see and hear but to what they see and hear/and believe. Rip Off Republic did not have the objective of putting forward the intricate solutions needed or the capacity to do so. But it offers a rough start that could be usefully used in shopping among the policy agendas in the run-up to the next general election.
How will we abandon our old ways of concealed string pulling between big business and government? What about the introduction of a register of lobbyists, and the requirement for all meetings between big business and those in administration to be minuted and available on government websites for public scrutiny?
If business has good arguments in favour of retaining existing ways or introducing new legislation that benefits society, then it shouldn't be frightened by open publication. Where are the timeframes and identifiable value-for-money targets to be set against future increases in public sector pay, over and above normal inflation-proofing? It is simply unacceptable that the benchmarking process does not come with a long list of specifics such as what we will get in increases in productivity and further value for society in return for the premium hikes negotiated by public sector unions with government.
The issue is not whether such pay increases are deserved, but whether we are getting value for money for them just as in infrastructural projects, where the overruns have been quite extraordinary. The billions extra paid out without receiving value for money is inevitably recouped in further taxes, buried in indirect taxation and other levies over the years to come. Why have we hugely underinvested in promoting competition in the domestic economy for 10 years by under-resourcing agencies such as the Competition Authority? Why has it been left to independent agencies such as the Consumers' Association of Ireland to openly confront the government in suits and sandals with a paltry annual subvention of €63,500?
This is no error, since agencies including the newly founded National Consumer Agency need greater resources if they are to have any hope of countering the massive power of the traditions that have been established, and that have left Ireland to be run, effectively, by producer groups. For example, at an annual subvention of €5 million, the Competition Authority cannot even begin to examine the cement industry to give it a clean bill of health despite the facts that the EU has officially identified the existence of a pan-European cement cartel, and the German competition authority recently fined its own industry hundreds of millions of euro.
We need to address the laws of evidence that will allow the swift processing of any actions undertaken by the Competition Authority, a matter which will also be addressed in tomorrow night's episode of Rip Off Republic, as the series concludes. While Rip Off Republic will have helped in garnering public support for real competition and understanding of how it works, what more needs to be done to engender a competition culture throughout the domestic economy?
The government must act swiftly on the recommendations of the Competition Authority, following its studies into markets such as the legal profession, banking and insurance, and even simple things like compelling dentists to publish their prices. Ideally, we need to move to a point where even schoolkids understand the damage caused when we allow business and professional groups to continue to retain protectionist measures such as those that exist for pharmacists and publicans. How will the historic link between big property interests and politics and the cost of development land be tackled? While social and affordable housing looks neat in the front window, too many are still left with the burden of jumbo mortgages that absorb up to half their monthly income.
This problem needs careful study by informed, risk-taking economists and academics. Such a study might include looking at levying an annual development land tax to pressurise those hoarding large development land banks to release them swiftly onto the market. Resources must also be poured into speeding up the planning process. We need to embrace the removal of unfair practices, and recognise unrestricted competition as being good for the health and fitness of Ireland as we continue to compete internationally.
Competition is not just good for consumers in introducing price pressures and greater choice, but as can be seen time and again it is good for innovators in business and for business volume. Some economists argue that the economic engine-room is now moving from construction to the services sector as a consumer boom propels us forward. If that's the case, we are at risk unless fair trade is introduced across the board. Careful balance will be needed to narrow the growing gulf between those who have plenty and the large number in middle Ireland who are barely coping. We must address the urgent social need behind the fact that one in every ten of our citizens is at risk of poverty, based on the most recent ESRI data.
If the criticism in Rip Off Republic and its presentation style has managed to focus minds on the complex solutions needed to address these problems, the programme has done its job.' (ends)