| Home > News & Events > Latest Press Releases > | ||
 |
||
|
||
<< Back to previous page ESRI/FFS "BUDGET PERSPECTIVES 2009" CONFERENCE7/10/2008The Economic and Social Research Institute and the Foundation for Fiscal Studies (FFS) are holding the eleventh "Budget Perspectives" Conference on Tuesday, 7 October 2008. The Conference will examine some of the key economic and public finance issues that need to be considered in framing policy for the forthcoming Budget and the medium term. There are three papers: Mobilising Market-based Instruments for Climate Change in Ireland , Lisa Ryan, Frank Convery & Noel Casserly (Comhar- Sustainable Development Council) Getting Out What You Put In: An Evaluation of Public Investment in Irish Sport , Pete Lunn ( ESRI) In addition, there will be a presentation on the Macroeconomic Background for Budget 2009, by Alan Barrett, Ide Kearney, Jean Goggin and Martin O'Brien (ESRI), and a Round Table session on the appropriate size of the budget deficit for 2009, including contributions from Patrick Honohan (TCD) and Philip Lane (TCD) ********************** Media Release The Budgetary Implications of Global Shocks to Cycle and Trends in Output After nearly two decades of stability the world economy is going through a period of financial turmoil as banks face the consequences of poor lending decisions. House prices were buoyed by a credit boom in many countries, but they have started to fall. The impacts on consumption and on housing investment are leading many economies into recession. Risk premia have risen in many markets, and investment is faltering as a consequence. At the same time oil prices have risen to unprecedented levels. Budget deficits have increased as a result of the unexpected slowdown in economic growth. Some of this is cyclical, and can be ignored. However, the rise in risk premia and the oil price have together reduced trend growth by half to one percentage point for four to six years in many countries. Public spending plans will have to be reined back to remain in line with trend incomes, or tax rates will have to rise. Not all ! of the recent increases in budget deficits can be ignored, and they will have to be addressed once the dust has settled. ENDS Contact: Ray Barrell (NIESR ) via ESRI at 8632000 or tim.callan@esri.ie ********************** Media Release Mobilising Market-based Instruments for Climate Change in Ireland CARBON TAX COULD LEAD TO ECONOMIC GROWTH A carbon levy should be introduced immediately across all economic sectors not currently included in the European Union's Emissions Trading Scheme (EU ETS). That's according to a new paper looking at the use of market-based instruments to reduce Irish greenhouse gas emissions. The paper, 'Mobilising Market-based Instruments for Climate Change in Ireland', was written by Lisa Ryan, Frank Convery and Noel Casserly, and presented at today's ESRI Budget Perspectives conference. According to the authors, Ireland faces a carbon-constrained world where doing nothing is not an option. The European Union Emissions Trading Scheme (EU ETS) has already created a carbon market for the power and heavy industry sectors, which face a price signal per tonne of CO2 emissions (known as allowances). The Commission is now proposing ambitious emissions reductions for the non-trading sector (agriculture, transport, waste, heat and process-related emissions from residential, commerce and industry currently not in the trading scheme) to be achieved by 2020. A new carbon tax should be levied at the level of the ETS' market price on the Irish transport, residential and small industry/services sectors, the paper's authors believe. Research shows that targeted use of revenues raised from carbon tax could spur growth in GNP, increase employment and increase investment in energy-efficient technologies. This is achievable as 40 per cent of the revenues raised from the tax could lead to a reduction in other taxes, a further 30 per cent could address fuel poverty, and the remaining 30 per cent could be used to further support reductions in greenhouse gas emissions. Time is not on our side, so action in Budget 2009 is important, say the authors. ENDS Contact: Lisa Ryan, Comhar- Sustainable Development Council; t: +353 1 8883917, email: lisa.ryan@environ.ie ********************** Getting Out What You Put In: An Evaluation of Public Investment in Irish Sport PUBLIC FUNDING FOR SPORT IN NEED OF REFORM Government funding of sport is inefficient and needs to be re-examined, according to ESR I research. Comparing the current system with data from three large surveys of sporting activity, the new analysis reveals that public expenditure is skewed towards elite sport at the expense of grassroots activity, is too focused on new facilities and is biased towards traditional team games. The stated aims of sports policy are to improve health and quality of life. International evidence suggests that public investment in sport can further these aims, especially where it attracts new participants at a local level. In Ireland , however, roughly twice as much public money goes to elite sport as is spent on grassroots sport. Sports clubs naturally seek funding for facilities, but demand among the wider public for more facilities is very low. What little demand does exist is for swimming pools, places to walk and fitness centres. Surveys find that time, motivation and health are much bigger barriers to participation than facilities, yet the programmes most likely to overcome these barriers receive a small fraction of the money spent on facilities. The main team sports (soccer, Gaelic games and rugby) receive the lion's share of public funding, but the data reveal that non-team sports are more popular and growing more quickly. Even accounting for its superior levels of social participation, the GAA's funding per participant stands out. If the aim is to increase participation in sport and exercise, it is hard to justify the present funding allocation. ESRI economist Dr. Pete Lunn said: “To some extent it is understandable that present policy is at odds with evidence, because much of the data about sporting activity in Ireland is new. But given what we now know and especially when public finances are tight, there is a strong case for reform.” ENDS. Notes for Editors: (1) The survey data is drawn from three nationally representative samples: the 2007 Irish Sports Monitor (10,000 adults), the Quarterly National Household Survey (c. 40,000 adults) and the ESR I Survey of Sport and Physical Exercise (3,080 adults). (2) This research is funded by the ESRI through its grant-in-aid from the Department of Finance. Contact: Pete Lunn, ESRI, 01 8632013. ********************** Round Table on the appropriate size of the budget deficit for 2009: Ireland 's Fiscal Challenges Patrick Honohan will contrast the current fiscal challenges with those of the 1980s. The economy has many strengths in 2008 that it did not have in 1981. Not least is a better understanding of how to deal with fiscal imbalance. We have learnt that tax rate increases do damage confidence, but lack of a credible medium-term fiscal strategy is worse. We also learnt that, small and open though Ireland is, the level of economic activity is influenced by fiscal policy. The fiscal stance for 2009 should therefore avoid improvisation and short-termism in either taxation or spending. It should send clear messages to domestic and foreign economic agents allowing them to plan with confidence about future tax and spending over the coming 5 years. The appropriate medium term correction will involve a rejigging of tax rates, with higher rates on more stable sources of revenue. Contact: Patrick Honohan, Professor of International Financial Economics and Development, TCD, Setting a Course for Irish Fiscal Policy Although the contraction in GDP and real incomes has been extraordinarily rapid, Philip Lane argues that sharp deterioration in the public finances cannot be fully attributed to normal cyclical factors. The overall fiscal problem has been compounded by a rate of expansion in current spending in recent years that exceeds the trend path for GDP. Rather, the collapse in housing-related revenues is a structural phenomenon that requires the government to find new sources of tax revenue and revise its spending policies. Accordingly, the appropriate policy response is to ensure that revenue and spending are placed on a sustainable path. Beginning in Budget 2009, this requires a gradual increase in tax revenues, a curb in many lines of current spending and the prioritisation of high-quality capital projects. In view of the current low level of net direct taxes paid by typical middle- and low-income households, it is in! evitable that tax increases will negatively affect these groups. Since an excessive fiscal tightening runs the risk of deepening the recession, the fiscal adjustment should be conducted on a phased basis. In terms of the overall budget balance, the general government deficit should be gradually reduced from the projected 2008 outurn of 5.5 percent of GDP, with a target of returning to below the normal 3 percent ceiling by Budget 2011. The government should also commit to establishing a new long-term fiscal framework that minimises the risk of future procyclical episodes in fiscal policy. Contact: Philp Lane, IIIS and Economics Department, Trinity College Dublin, 087 2958 570. << Back to previous page |
  |
 |
||
 |
||
