Personal memories of Senator Ted Kennedy

THE morning that the death of Senator Ted Kennedy was announced my eldest daughter discreetly asked me “was he a brother of JFK”?

It is easy for those of us who lived throughout the Kennedy era to recall all the germane details of the Kennedy legacy, but if you were born 13 years after the assassination of President Kennedy, perhaps you could be excused for not being quite on top of all the details.

Ted Kennedy was one of the most inspiring political leaders of modern times; a leader who could combine passion with vigour and a capacity to achieve landmark outcomes. He was a senator since he turned 30 years old in 1962 so his political career crossed many generations.  Harold Macmillan was Prime Minister of the United Kingdom when Ted Kennedy became a senator

The Kennedy legacy made its debut in Ireland with the visit of President Kennedy in June 1963, but this was preceded and by ‘look and see’ visit here by Ted Kennedy. The JFK visit was the first-ever by a serving US president but its significance transcended that. The television service in Ireland for just two years old at the time and the coverage of the visit under the direction of Tom Hardiman, then Head of Engineering at RTE was a significant challenge.

JFK was able to use television to its fullest possible extent to enable his wonderfully articulated messages reach the hearts and minds of the widest possible audience. The President’s party were greeted at Dublin Airport by a then ageing Irish Cabinet, most of whom had been active in politics since the founding of the State, 41 years earlier, but were now at the sunset of their careers. The Kennedy era was in its infancy and everything not just seemed possible, but probable.  His charm, charisma and elegance was unprecedented – a family trait!

Their grandparents had been Famine emigrants in 1848. When I lived in Boston I was fascinated to discover that no less than 50,000 Irish arrived at the shore of Boston Harbour in 1849, at a time when the population of Boston was just 115,000 people – almost similar at that time to the population of County Leitrim which has 112,000 residents – but now only has 28,950. The population of Dublin at that time was 405,000. Ireland had a widely dispersed population of 5.1 million in 1849 – almost as many as there are now in Massachusetts.

I felt many ‘virtual links’ with the Kennedy enterprise ever since. I was in North Truro on Cape Cod when the tragedy involving Senator Kennedy and Mary-Jo Kopechne occurred at Chappaquiddick in July 1969. I was a student in Trinity College Dublin when Senator Kennedy spoke in the Examination Hall about Edmund Burke, the 18^th century politician whose efforts led to the founding of the College Historical Society in 1770.

My dear and closest friends in Boston and I were regular visitors to Kennedy-related venues during the five years I lived there. These included the magnificent JFK Library at Columbia Point, the Harvard Kennedy School, where the great and the good of the universe were invited to speak to the world on matter of the utmost importance. And there was the former family home at 83 Beale Street Brookline.

I heard Senator Kennedy speak on several occasions in Boston, sometimes alongside other distinguished luminaries such as Senator John McCain and Senator Evan Bayh. Bayh’s father, Birch Bayh, preceded Dan Quayle as Senator for Indiana from 1963 to 1981. He entered the Senate a year after Senator Kennedy and was with him in a small aircraft that crashed in Springfield Massachusetts in June 1964. He was a participant in every significant election campaign in Massachusetts.

I particularly remember his efforts on behalf of Shannon O’Brien, the candidate and opponent of Mitt Romney for the post of Governor of Massachusetts in 2002. Kennedy has been a vigorous advocate of hers.  But O’Brien’s political star imploded on live television when she as asked by the late Tim Russert of NBC whether the parents of a 16-year old should be informed if that youngster were to have an abortion. O’Brien had been a favourite to win until she fudged the answer to that question and ended up with just 45% of the votes.  Massachusetts ended up with Mitt Romney as Governor for a one term.

I was especially impressed with the single-minded passion and commitment of Ted Kennedy to the issues he believed in. Many like him would have been happy to coast along on the angel-dust of the family legacy, but not Ted Kennedy. He had an enormous capacity for empathy. This was abundantly displayed many times, but especially at times of tragedy.  His eloquence in December 1999 at the funerals of six fire fighters from Worcester Massachusetts who died in the course of duty must have been a great comfort to those left behind.  When someone close dies, part of you dies with them – but part of them continues to live in you.

I had the honour of meeting Senator Kennedy at the Harvard Club in Boston in June 2005 before I returned to Ireland. He reminisced about his brothers that day.

The Irish media recognised what a good friend he had been to this country.  He took risks when risks were necessary.  He could retain his patronage when that was appropriate. 

During  my time in Boston a beloved Massachusetts congressman of 28 years standing passed away after an illness.  His name was Joe Moakley and he, too, had an Irish background.  They said of Moakley “he never forgot where he came from”.  The same can be said of Ted Kennedy.  That unique baritone voice of his will echo for many a year to come.  May be rest in peace.

Irish pubs lobby for State handouts

THE LATEST vested interest to pivot precariously, like a circus clown on the shoulders of a dwarf, is The Vintners’ Federation of Ireland, which claims to represent the interests of 5,000 publicans’.  But if the number of publicans going out of business is as high as they claim the Federation’s membership dues must be under severe pressure and the basic commercial viability of the pub business must be suspect.

Their wish list from the Government includes:

• A reduction in VAT from 21½% to 15% and from 13½% to 10%.
• Abatement of water rates
• No downward change in the current blood-alcohol 80mg/100ml levels
• That the Government Temporary Employment Incentive Scheme available in the manufacturing sector to be extended to publicans.

Is there even a country in the world where socialism is the embedded norm tolerate such indulgence?  It is one thing to aspire to socialised medicine so that every citizen can get  fair crack of the whip – but socialised pub?  Are State incentives really necessary to fill the nation’s accident and emergency facilities?

 

Creators of their own misery

These very publicans not the authors of their own downfall.  Like the farmers, the milked every money-making opportunity for capital gain that be exploited through their property assets.

The increase in the tax content of a pint of stout between 1998 and 2008 has been 26.9%, while the non-tax element of the price has increased by 69.4% during a decade that the overall Consumer Price Index increased by 44.2%.  This has resulted in the average bar price of a pint increasing from €2.65 to €4.09. 

Alcohol consumption in Ireland has increased by 21% in the past five years and this figure does not include the very substantial quantities of alcohol purchased outside the jurisdiction. It would seem that the publicans' now want taxpayers' to compensate for the drop in demand exacerbated by their own price increases and poor value!

The revision of blood-alcohol limits and the introduction of mandatory breath testing has resulted in a drop in fatalities but the number of arrests for drink driving has increased by a third in five years.

Is this evidence that the publicans' of Ireland have lost the plot while consumers have redefined their own concept of value?  If so, is it realistic to seek subsidies that, in effect, are from lost customers without offering anything of value in return, either to them or to the State?

 

Decline in the number of publicans

The VFI claim that 250 publicans went out of business in the past year and between 1,500 and 1,700 pubs went out of business in the past two years.

The actual number of publican licences issued has declined by 688 from 9,555 in 2006 to 8,867 pub licences in 2008.

The VFI are therefore telling blatant lies about the number of publicans who have gone out of business, or else they are exaggerating the scale of the impact of the recession on their members.

 

Value Added Tax reduction

There are approximately 7,000 VAT registered publicans in the country.

The VAT element of a pint of stout is €0.71. The VAT element of a pint of lager is €0.78 and the VAT element of the bar price of a measure of whiskey is €0.66.

The consequence of the sought-after VAT reduction would be an annual loss to the Exchequer of €15.58 million on spirit sales and €45.78 million on beer sales, an annual total of over €60 million.  Is this why the over-70’s are denied medical cards and special needs teaching facilities are eliminated?

Temporary Employment Subsidy

This subsidy is intended to apply to vulnerable but viable businesses in the manufacturing or internationally traded sectors whose exports contribute to the nation’s balance of payments.

Subsidy recipients must have already taken significant restructuring measures to improve their competitiveness – such as reducing costs and improving productivity. They must employ 10, or more, persons and that they have sufficient cash to trade up to at least the end of 2010.

Neighbourhood pubs make absolutely no positive contribution to the balance of payments. Few of them employ ten persons, or more. Seventy four per cent of the beer and forty five per cent of the spirits they sell is made in Ireland. The balance is imported.

 

Changes in alcohol consumption in Ireland

While the number of pubs has declined the number of non-publican Class A liquor licences has increased by over 1,000 from 10,113 in 2006 to 11,117 in 2008. What does this say about the basic viability of the pub business and its capacity to provide customers with what they want at a price they deem value for money?

There has been a fairly dramatic change in consumer preferences for alcohol in Ireland. Beer consumption from the Irish retail market has declined from 23,226,732 litres in 2003 to 21,705,622 litres last year. Spirit sales have increased by an overall 10%, with increases recorded both of home produced and imported products. But the largest change in preferences has been in the wine business.

It is hard to believe that there were only about a half dozen outlets in Dublin retailing wine in the early 1970’s when Ireland joined the EEC. Our demand for wine in the past five years has increased from 60 million to 80 million litres per year – not an inconsequential figure for a country with a population over 15 years of age of 3.5 million persons. These trends do not includes purchases of alcohol in Northern Ireland, or elsewhere outside the national jurisdiction.

The downside of all this booze is that the number of arrests for drunk-driving has increased from 13,441 to almost 18,000 in the five years to 2008. The number of fatalities has moderated from 335 to 279 after the alcohol limits for drivers was reduced to 80 mg per 100 ml of blood and mandatory breath testing became law in March 2007. The limits in 18 other EU member states is lower that the current Irish tolerance level while that in Britain and the United States is comparable.

Conclusion

There has been a radical shake-up in the Ireland’s alcohol sector with drinkers much more aware of statutory restrictions and what constitutes value for money. More of them are drinking at home. While some pubs have developed attractive dining offerings, too many of them are stuck in a time warp where the stench of urine, faeces and bleach, combined with outrageous prices have prompted customers look elsewhere.

The amount of VAT is therefore aggravated by publican price hikes so if they reduce their prices VAT is automatically reduced. But they will hardly opt for this solution because it is too much like hard work. It is far easier to poor-mouth the State for €60 million and not have to lift a finger!

Pubs are not systemically important, unlike the enterprises of Sean FitzPatrick and Michael Fingleton, two of the architects of the property bubble which gave publicans and many others the illusion of  growing prosperity and the Government capitals gains tax.

If the wish list was acceded to the cost of doing so would be borne directly, or indirectly by the customers’.  This would have the consequence of reducing their disposable income so they could not afford to buy any more drink.  A Mexican stand-off would then occur whereby the Vintners Federation would claim a victory, of sorts, but the pubs would not earn any more revenue.  The ‘victory’ would therefore only be a charade and the only potential benefit, in practice, would be to maintain the level of dues paid to the Federation.

But that option involves dipping nicotine-stained fingers into the empty pockets of formers customers and I don’t think that even a maudlin’ bishop would argue in favour of the morality of that!

Irish railways in the 19th and 21st centuries

 

DUBLIN-bound commuters have to cope for the next three months, or so, with service disruption caused by the collapse of a railway viaduct at Malahide last week. This 19^th century edifice over the Broadmeadow Estuary will disrupt an estimated 50,000 commuter each day.

The era of mass transport in Ireland based on railways began in 1834, more than a decade prior to The Great Famine and reached its peak in the mid 1920’s. The system was reduced to a shadow of its original scale by the early 1960’s when the total population of the country sunk to its lowest level in history.

Ireland’s first railway service between Dublin and Dún Laoghaire in 1834, eight years after the inauguration of the first rail route in England between Liverpool and Manchester. The terminus was located at what is now Salthill station until 1837 due to local opposition to the development of what is now Dún Laoghaire station.

The population of what is now the Republic of Ireland, when the railways were inaugurated, was 6.5 million but this declined to 2.9 million in 1926 when the success of the railways system began to wane. Ireland’s population reached a low point in 1961 when it dropped to 2.8 million, before recovering over the past 15 years to its current level of 4.2 million.

When the railway enterprise commenced in 1834, 15% of the country’s population resided in the counties that now constitute the Dublin commuter belt – counties Dublin, Meath, Louth, Wicklow, Kildare and Carlow but, of course, there was no such thing as commuting then, nor had breakfast-roll-man existed! The Dublin commuter belt today contains 43% of the country’s population.  The building on the left is Dalkey Station, opened in the 1850’s.

It may surprise some that when the population was at its peak in 1841, the population of County Dublin was less than 374,000. County Dublin had a lower population then than:

• Cork (854,000)
• Tipperary (435,000)
• Galway (440,198)
• Mayo (388,887)

The decline and recovery in population numbers is summarised in this table:

 

Counties	1841	1926	1961	2009
Leinster
Carlow	86,228	34,476	33,342	50,349
Dublin	373,773	505,654	718,332	1,187,176
Kildare	114,488	58,028	64,420	186,335
Kilkenny	202,420	70,990	61,668	87,558
Laois	153,930	51,540	45,069	67,059
Longford	115,491	39,847	30,643	34,391
Louth	128,280	62,739	67,378	111,267
Meath	183,828	62,739	65,122	162,831
Offaly	146,857	52,592	51,533	70,868
Westmeath	141,300	56,818	52,861	79,346
Wexford	202,033	95,848	83,308	131,749
Wicklow	123,143	57,591	58,473	126,194
	1,971,771	1,148,862	1,332,149	2,295,123
Munster	1841	1926	1961	2009
Clare	286,394	95,064	73,702	110,950
Cork	854,118	305,747	330,443	481,295
Kerry	293,880	149,171	116,458	139,835
Limerick	330,029	140,343	133,339	184,055
Tipperary	435,553	141,015	123,822	149,224
Waterford	196,187	78,562	71,439	107,961
	2,396,161	909,902	849,203	1,173,320
Connaught	1841	1926	1961	2009
Galway	440,198	169,366	149,887	231,670
Leitrim	155,297	55,907	33,470	28,950
Mayo	388,887	172,690	123,330	123,839
Roscommon	253,591	83,556	59,217	58,768
Sligo	180,886	71,388	53,561	60,894
	1,418,859	552,907	419,465	504,121
Ulster	1841	1926	1961	2009
Cavan	243,158	82,452	56,594	64,003
Donegal	296,448	152,508	113,842	147,264
Monaghan	200,442	65,131	47,088	55,997
	740,048	300,091	217,524	267,264
OVERALL TOTAL	6,526,839	2,911,762	2,818,341	4,239,828

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The development of the leading railway companies reflected this:

• 1839 Ulster Railway – 970 KM
• 1844 Great Southern & Western Railway - 1,794 KM by 1901
• 1844 Dundalk - Castleblayney
• 1845 Midland Great Western Railway - 861 KM
• 1848 Midland Railway Northern Counties – 262 KM
• 1848 Belfast and County Down Railway
• 1840 Cork, Blackrock and Passage Railway – 26 KM
• 1851 Cork, Bandon and South Coast Railway - 150 KM
• 1856 Dublin & South Easter Railway serving Wicklow and Wexford - 256 KM
• 1859 Clones - Enniskillen
• 1863 County Donegal narrow gauge railway – 178 KM
• 1866 Cork and Macroom Direct Railway – 38 KM
• 1883 Cavan and Leitrim light rail – 78 KM
• 1886 Clonakilty Light Extension Railway – 14 KM
• 1887 Cork and Muskerry Light Railway – 29 KM
• 1887 West Clare Railway – 43KM
• 1888 Dublin and Blessington Steam Tramway – 25 KM
• 1888 Listowel and Ballybunion Railway – 16 KM
• 1900 Dublin and Lucan Electric Railway – 11 KM

There were other independent railway routes between:

• Schull and Skibbereen
• Sligo-Leitrim
• Timoleague and Courtmacsherry
• Tralee and Dingle
• Waterford and Tramore
• Castleblayney, Keady and Armagh
• Tralee and Fenit
• Ballnrobe and Claremorris
• Loughrea and Attymon

The system operated 5,500 kilometres of track in the 1920’s and apart from passenger traffic, they served a vital function in moving goods to ports for transhipment abroad. The building photographed on the left is Glenageary Station, where my own daily commute starts and ends – not always in sunshine!

The railway companies were merged into Great Southern Railways in 1925 and amalgamated into what was to become CIE in 1945.

The modern railway system in the Republic of Ireland consists of approximately one-third of the peak capacity in terms of track length. The mainline service links Dublin with Wexford, Waterford, Cork, Tralee, Limerick, Galway, Sligo and Belfast. The former Dublin – Navan route is being redeveloped as are the city services in Dublin, Cork and Galway.

This is taking place against a population profile that is radically different than that of pre-Famine Ireland, as illustrated in the following table, measuring persons per square kilometre:

 

Counties	Area (km2)	Density 1841	Density 1961	Density 2009
Leinster
Carlow	896	96	37	56
Dublin	921	406	780	1,289
Kildare	1,693	68	38	110
Kilkenny	2,061	98	30	42
Laois	1,719	90	26	39
Longford	1,091	106	28	32
Louth	820	156	82	136
Meath	2,342	78	28	70
Offaly	1,999	73	26	35
Westmeath	1,838	77	29	43
Wexford	2,352	86	35	56
Wicklow	2,024	61	29	62
	19,756	100	67	116
Munster Area / Population density	1841	1926	1961	2009
Clare	3,147	91	23	35
Cork	7,457	115	44	65
Kerry	4,746	62	25	29
Limerick	2,686	123	50	69
Tipperary	4,303	101	29	35
Waterford	1,837	107	39	59
	24,176	99	35	49
Connaught Area /population density	1841	1926	1961	2009
Galway	6,148	72	24	38
Leitrim	1,588	98	21	18
Mayo	5,585	70	22	22
Roscommon	2,547	100	23	23
Sligo	11,836	15	5	5
	27,704	51	15	18
Ulster Area / population density	1841	1926	1961	2009
Cavan	1,931	126	29	33
Donegal	4,841	61	24	30
Monaghan	1,294	155	36	43
	8,066	92	27	33
Overall Total	79,702	82	35	53

Some of the magic of the old railways is kept alive by the West Clare Railway who have run the old locomotive over a stretch of the old route. The Railway Preservation Society of Ireland, based at  Whitehead, Co Antrim organise steam train trips from time to time.

Business lobby weighs in on YES side of 2nd Irish Lisbon Treaty Referendum

THE SECOND Lisbon Treaty Referendum is to take place in Ireland on Friday 2 October and the Irish business lobby is among many interests that are pressing for a YES vote.  The latest to enter the fray is Jim O’Hara, General Manager of Intel Ireland, who argues that passage of the Referendum is ‘good for business, jobs, investment and, as a consequence, prosperity’.

The purpose of the Treaty is to enhance the efficiency of the EU and make it more coherent.  Twenty three of the EU-27 states have  already deposited instruments of ratification.  Apart from Ireland, the Czech republic and Germany have still to deposit instruments of ratification. 

Presidential assent has been granted in Germany following very strong support for the Treaty in the Bundestag and Bundesrat.  The Chamber of Deputies and Senate of the Czech Republic supported the Treaty in February and May 2009.

Outcome of 1st Referendum in Dublin

The voters of Dublin cast 209,275 votes for YES and 217,942 votes for NO in the first referendum.  The overall turnout from the electorate of 784,699 was 54.6%.  The turnout in the European Parliament Election on 5 June 2009, 407,404 was slightly lower than the 427,217 votes cast in the first Lisbon Treaty Referendum. Six of the eleven Dublin Dáil constituencies voted in favour of Lisbon last time.

The following Dáil constituencies, outside Dublin, supported the first Lisbon Treaty referendum:

• Carlow-Kilkenny 50%
• Clare 52%
• Kildare North 55%
• Laois-Offaly 56%
• Meath East 51%
• Tipperary South 50%
• Wicklow 50%

Rejection outside Dublin was greatest in:

• Donegal North-East 65%
• Cork North-Central 64%
• Donegal South-West 63%
• Mayo 62%
• Kerry North 59%
• Louth 58%

Dublin - North of the Liffey

When the first referendum was held on 12 June 2008, voters on the north side of Dublin cast 86,862 votes in favour and 101,882 votes against – a margin of 54% against and 46% in favour. Voter turnout was 55%.  There are 345,068 voters north of the Liffey.

Two Dáil constituencies on the north side of the Liffey, Dublin North and Dublin North Central voted a small majority in favour. Dublin Central and Dublin North West voted heavily against – 63% and 56% respectively.

Constituency	% YES	% NO	Turnout
Central	44%	56%	48.8%
North	50%	49%	55.3%
North Central	50%	49%	61.1%
North East	43%	57%	57.2%
North West	36%	63%	52.9%
West	48%	52%	54.5%
Total Votes	86,862	101,882	188,744 (54.9%)

 Dublin - South of the Liffey

 

Constituency	% Yes	% No	Turnout
Mid West	40%	60%	51.7%
South	63%	37%	58.4%
South-Central	39&	61%	62.5%
South-East	61%	38%	49.6%
South-West	35%	65%	64.4%
Dun Laoghaire	63%	36%	58.8%
TOTAL VOTES	122,413	116,060	238,473 (54.4%)

 

 

 

 

 

 

 

 

 

 

 

 

There is a larger electorate south of the Liffey – 439,631 voters.

The business lobby in Dublin

69.4% of all the directors listed at the Companies Registration Office in Dublin are resident south of the Liffey, principally in the constituencies of Dublin South-East, Dublin South and Dublin South-Central. 

The 30.6% resident north of the Liffey are predominantly in Dublin West and Dublin North-Central.

The business lobby is least prominent in Dublin Central, Dublin South-West and Dublin Mid-West. 

The YES vote last year was therefore broadly in line with areas in Dublin where the business lobby casts its vote. Are the business lobby preaching to the choir and to what extent will their impact be heeded and responded to elsewhere by the electorate?

 

Economic developments since June 2008

What impact will economic developments since June 2008 have on the outcome of the second Referendum?

	Early June 2008	Jul-Aug 2009
Live Register	201,756	436,735
Number Employed	2,108,500	(Mar) 1,965,600
Unemployment	115,500	(Mar) 222,800
Capital acquisitions in industry	€1,112,700	(Mar) €941,800
Imports	€4,825,800	(May) €3,774,100
Exports	€7,298,900	(May) €6,735,500
Retail sales volume index	103.5	93.3
Retail sales value index	106.1	90.1

The retail sectors showing the most dramatic downturn are:

Motor vehicles' –30.3%

Non-specialised stores, including supermarkets –5.2%

Clothing, footwear and textiles –4.2%

Bars –12.7%

Household equipment –16.1%

History of Irish referenda to amend the Constitution to facilitate EU evolution

 

Date	Issue	Votes - YES	Votes - NO
APPROVED
10 May 1972	To Join EEC	1,041,980	211,891
Turnout 71.4%
22 June 1982	Single European Act	755,423	324,977
Turnout 45.0%
18 June 1992	Maastricht Treaty	1,001,076	448,655
Turnout 57.3%
22 May 1998	Amsterdam Treaty	932,632	578,070
Turnout 56.2%
19 October 2002	Nice Treaty 2nd Referendum	906,317	534,887
Turnout 49.4%
REJECTED
7 June 2001	Nice Treaty 1st Referendum	453,461	529,479
Turnout 34.8%
12 June 2008	Lisbon Treaty 1st Referendum	752,451	862,415
Turnout 53.1%

The Irish tax slump and Irish competitiveness

THE SECOND Budget that was presented to Dáil Éireann by Brian Lenihan TD, the Minister for Finance on 7 April was based on achieving a tax revenue target of €34.4 billion in 2009. Taxation receipts to the end of July were €18.68 billion. While this was 97% of the July target, a shortfall of €574 million was recorded.  This shortfall could be construed as a €13.5 billion shortfall if the 2007 tax revenues are the basis of comparison.

“Put simply, Irish tax revenues are close to 26% of GDP while voted government spending is 34% of GNP”.

To put this in context – total tax revenue in 2007 and 2008 was €47.5 billion and €40.77 billion respectively.

The 2009 target is therefore just €13.1 billion shy of the 2007 outturn so the shortfall must be seen against this background because this is what determined the government spending profile.

The make-up of the shortfall was spread across all tax categories, except excise, which is surprising given the severe downturn in new car sales. Excise is levied on transactions or events and not by reference to any time period. The main components of the €5.53 billion in excise duties in 2008 were:

Alcohol	19.24%
Tobacco	21.17%
Oil, gas and petrol	39.23%
Vehicle registration	20.36%

Sources of Shortfall

	€ Million
Customs	14
Capital acquisition tax	23
Capital gains tax	40
Corporation tax	75
Stamps	86
Income tax	185
VAT	447
Unallocated taxes	37
31 JULY 2009	-574

Business Sector Impact

Five business sectors that directly contributed €25.87 billion of the 2007 tax revenue of €47.5 billion are currently under pressure. Three banks, Bank of Ireland, AIB and the nationalised  Anglo Irish Bank have been provided with €11 billion this year by the taxpayer to prop up their capital base.

Corporation Tax

The 2009 target for corporation tax is €3.74 billion compared to corporation tax revenue of €5.06 billion in 2007.

Financial intermediation and manufacturing alone paid corporation tax of €3.93 billion in 2007

Income Tax

The 2009 target for income tax is €12.47 billion but unemployment and the number on the Live register is 30% higher than last March when these targets were established.

The large sources of income tax in 2007 were financial intermediation €1.17 billion, manufacturing €1.21 billion, construction €857 million, real estate related activities €1.62 billion and wholesale / retail – including the motor sector, €5.56 billion.

Income Tax from self employed

The total income tax derived from self-employed in 2007 was €2.3 billion and over 39% was derived from the self-employed in the real estate business.

Tax component of Irish agriculture

I have written several times in this blog about Irish agriculture, pointing out that while EU subsidies have remained at around €1.4 billion over the past several years, the slack has been taken up by the Irish taxpayer and, now, by those who borrow on behalf of the Irish taxpayer. Agriculture subsidies are the equivalent to 90% of output.

The contribution of agriculture to the Irish Exchequer in 2007, a time when land was changing hands at extortionate prices was €747 million out of a total tax take of €47.5 billion.

The make-up of this is interesting.

 

	€ Million
VAT	-€35,041
PAYE	50,775
Income tax – self employed	201,345
Corporation tax	24,933
Capital gains tax	501,095
TOTAL TAX FROM AGRICULTURE	743,107

Clearly, the sale of farm land to developers and the capital gains arising was the critical component of agricultural taxation in 2009.

The sector was reported to have employed 118,700 at the end of 2007. An average income tax payment of €427.75 per employee would suggest that there were very few prosperous people working on farms!

Value Added Tax

The value added tax paid in respect of professional services in 2008 was €33,541,000, a shade higher than the VAT paid in 2007.  You might think this encouraging.  But was it paid by a sector that was internationally competitive?

Competitiveness of professional taxpayers

The Annual Competitiveness Report 2009 has just been published by the National Competitiveness Council.  It discloses:

• Accountancy fees charged in Ireland by a major international accounting firm for a junior accountant in Ireland at approximately €115 per hour was significantly ahead of the same charge in London and Copenhagen and almost double what is charged in Singapore and my beloved Boston.
  
• The fee charge by a major legal firm in Ireland for a junior legal assistant per hour, excluding VAT was €300 her hour – significantly dearer than what is charged for counterparts in Boston, Maastricht, Copenhagen, London and Budapest.  This level of charge is almost 300% higher than in Singapore.
  
• The cost of an ad-hoc service site visit by an IT technician in Dublin, €180 per hour,  was the second most expensive of the locations benchmarked.  The comparable charge in Boston was €50, Budapest €40, Maastricht €35, Copenhagen €25 and Singapore €20.

I never cease to be fascinated by the passive language of government reports.  Imagine an infant sucking its thumb.  This Report advises “cost competitiveness is showing signs of improvement after years of deterioration” and it proceed to inform readers that “overall lending declined by 1.4% in the year to March 2009, compared to an annual increase of 12.5 per cent in the year to March 2008”.  Allelluia! 

But when you realise that non-government credit is close to €400 billion, would it not be more candid to state that borrowing is so high the only trend open is a reduction?  Get real.

“Are we at the stage where we must acknowledge that the restoration of credibility must precede the restoration of competitiveness?”

Irish smoking ban after its 5th birthday

THE IRISH ban on smoking in workplaces celebrated its 5^th birthday on the 29^th March 2009.

Ireland was one of the first countries to introduce such an initiative and there have been many imitators since, across the world, some at city and state level. This initiative was probably one of the most visionary that has come out of our political enterprise for some time. The person who pioneered it was Micheál Martin TD, then Minister for Health and Children. It represented a massive cultural change for our fairly conservative, habit-prone society.

The achievement of change generally is extraordinarily difficult and rarely embraced, except as a last resort to survival in any context. But this particular change was embraced by society and consistently achieves a much higher level of compliance than, say, not driving in bus lanes at times they are confined to public service vehicles. I saw it as a being more far-reaching that the avoidance of health impairment – more of a refinement of the national self-image of a maturing, outward-looking nation.

Impact of smoking ban

The publicans fought the smoking ban very vigorously. There were 9,964 licensed pubs in Ireland in 2004. There were 8,867 last year, a reduction of 11%. I argued then in a letter to The Irish Times that the smoking ban does not uniquely determine if a customer goes to a pub, or not and I continue to believe this to be the case.

But there has been a 7% drop in the number of cigarettes purchased in this country from 5.33 billion in 2004 to 4.94 billion cigarettes in 2008.

OTC (Office of Tobacco Control) research into smoking patterns reveals that 22.8% of women and 24.3% of men smoke. The heaviest concentration of smokers are in the less prosperous C2 and DE social cohort compared.

When the smoking ban legislation was being formulated the licensed vintners disputed the accuracy of the suggestion that 7,500 deaths per annum are attributable to smoking. The Office of Tobacco Control, in its 2008 Annual Report, states that over 6,000 people die of smoking-related illnesses now. If this is an improvement it must be welcomed.

However, researchers’ seem generally more comfortable when it is rationalising percentages rather than absolute numbers. But sometimes hard numbers make a stark impact. 

 

Ireland’s smoking population

There are about 630,000 smokers in Ireland.  The following table summarises the population of Ireland and derives from that the number who smoke at different age ranges:

 

Age Range	Total Population, 2008	% population who smoke	Number of people who smoke
15 – 24	617,900	19.85%	122,653
25 – 34	784,000	26.57%	208,309
25 – 44	652,000	21.22%	138,354
45 – 54	543,000	15.61%	84,762
55 – 64	431,000	9.89%	42,626
65+	482,000	6.86%	33,065
TOTAL	3,509,,900		629,770

  Source: CSO and OTC

Scale of the smoking habit

Data from the Revenue Commissioners on the background to the tax component of cigarettes indicates that they are a nice little earner for the Exchequer. The tax take last year on cigarettes was €1,131,532,463, an increase of 10.4% since the introduction of the smoking ban in 2004. Approximately 80% of the retail price of a 20-pack of cigarettes in Ireland represents excise duty and VAT.  The excise component is currently €175.30 per 1,000 cigarettes, and VAT is charged at 18.28% of the retail price. Excise duty from tobacco accounted for 20% of all excise duty raised in 2008.  It will be interesting to see how elastic the demand for tobacco proves to be this year.  Excise duty at the end of July was down 21% on the corresponding July 2008 figure but much of this is accounted for by a 65%+ decline in new car sales. Tobacco, from an Exchequer perspective may prove to be a more steady source of revenue.

Our 630,000 smoker burnt 247,028,350 20-packs of cigarettes in 2008 (excluding cigarettes that are smuggled in substantial volume, or brought  into the country as legitimate personal baggage). 

Apart from cigarettes, Irish smokers also burnt 44,290 kilograms of cigars and 154,473 kilograms of other tobacco products.

On a positive note, there has been a significant contraction in smoking here since 2002 – by almost 30% in the case of cigarettes and by 31% in the case of other tobacco products since 2001.

Fatal consequences of smoking

A total of 27,705 persons died in Ireland last year. One out of every 126 persons. If, say, 6,000 deaths are attributable to smoking-related causes this would mean that one out of every 104 persons die as a direct consequence.

While just 18% of the Irish population smoke cigarettes those who smoke are typically fairly heavy smokers. They smoke an average of over 20 cigarettes per day – so those who smoke are not casual or intermittent smokers.

Apart from the unique initiative that the smoking ban is, given the cultural dimension, other initiatives have been taken to discourage smoking and especially smoking by young people. The Public Health (Tobacco) Acts 2002 outlawed in-store tobacco advertising and displays. This is in recognition that the vast majority of Irish smokers commence at a young age. My own cigarette smoking career began at the age of nine and ended when I was 21, having seen both parents die prematurely as a consequence of cigarette smoking.

The Irish cigarette market is dominated by three distribution companies – Player, Carroll and Gallaher. The value of the market to them is €282 million when the tax element is eliminated. Player account for €104 million; Carroll account for €38 million and Gallaher account for the lion’s share, €140 million.

Each traces it history to the first half of the 18th century.  The largest, Gallaher, now part of Japan Tobacco, was founded in Derry in 1957 by Tom Gallaher.  P J Carroll founded his firm in Dundalk in 1824 and it is now part of British American Tobacco.  Imperial Tobacco is the home of John Player & Sons which first saw the dawn of day in Nottingham in the mid 18th century.

 

Five most popular brands

The five most popular brands have a combined market share of 65.5%, according to data from the Office of Tobacco Control.

Brand	Market share	% male smokers	% female smokers
Benson & Hedges	17.37%	58.93%	41.07%
John Player Blue	16.70%	55.74%	44.26%
Silk Cut Purple	13.43%	35.83%	64.17%
Marlboro Gold	11.08%	50.05%	49.95%
Silk Cut Blue	6.98	31.70%	68.30%

 

 

 

 

 

 

 

Final Consequences

As I mentioned 27,705 persons departed this mortal coil last year and 61% of them managed to celebrate their 75^th birthday!

 

	Total deaths in Ireland 2007	% who die at each age range
15 to 24 Years	353	1.27%
25 to 34 Years	486	1.75%
35 to 44 Years	686	2.48%
45 to 54 Years	1,437	5.19%
55 to 64 Years	2,919	10.54%
65 to 74 Years	4,923	17.77%
75 Years and Over	16,901	61.00%
TOTAL	27,705

 Source CSO

The average cost of a funeral in Ireland is said by the Irish Association of Funeral Directors to be €4,500. This means they have a market worth €125 million per annum if the bury 27.705 deceased persons.

Those who die from smoking-related causes account for €27 million of this but they don’t have to make this expenditure as quickly as others if they have the foresight to realise that they have an infinite range of choices as to how they spend the money they avoid spending as personal slave of the tobacco companies.

While I stopped smoking cigarettes at the age of 21, a very long time ago, it was 15 years ago that I last smoked a cigar. I tried for a long time beforehand to convince myself that I would only smoke when I was having a drink but that, of course, was a fiction.

I still experience a sense of accomplishment at not being enslaved to the chronic habit that smoking is. It is an experience that inspires a sense of freedom and wellbeing. I never take it for granted. There is no half-way house and it is easy for a smoker to relapse. I did it many times. But when I finally stopped smoking on New Years Eve 1994 I promised myself that I never again wanted to experience the nausea and dizziness that overwhelms one after taking that first cigar, or cigarette. My advice is ‘read my lips’ and cherish that freedom!