Mortgage securitisation fuelled the housing boom and bust in Ireland

The Irish financial institutions took to residential mortgage securitisation like a duck to water. The total value of securitised mortgages in January 2003 (prior to the aggressive inflation of the property bubble) amounted to €3.75 billion. This figure increased to €37.6 billion in January 2010, an increase of 902%! The overall residential mortgage volume increased by 172% in the same period

The securitisation of residential mortgages have been described as the ‘mother of all securitisations’. They generally pass through securities or bonds based on cash flows derivable from residential home loans.

The long maturities of residential mortgages and the lending collateral being real estate providing strong asset backing enabled investors to take an independent exposure on the receivables. The concept originated in the United States and was considered a catalyst in the provision of house purchase finance.

The two main Niche lenders in Ireland relied on securitisation as a funding mechanism and international capital markets took an increasing interest in Irish residential mortgage assets.

The structured funding techniques for residential mortgage lenders are securitisation and covered bond issuance.

The impact of these trends on average house prices has been:

 

	New Houses	Used Houses
Q1 2003	€213,904	€243,604
Max average price H1 2007	€320,969	€386,989
Q1 2010	€226,245	€247,534
Climb 2003-07	+50%	+59%
Fall 2007-09	-30%	-36%

Making Sense of The National Recovery Plan 2010-2014

The Irish Government estimated that total tax revenue for 2010 would be €31.05 billion. Government expenditure (capital and current) for 2010 was forecast to be €61.17 billion, a 3% reduction over 2009.

Tax revenue for 2003 was €32.1 billion and total voted Government expenditure that year was €30.74 billion. The exchequer deficit that year was €978,020 million. The National Debt in 2003 was €37.61 billion.

Government expenditure in 2003 and 2010 compares as follows:

	2003	2010	Spending Change
Agriculture, Fisheries & Food	829,787	1,758,806	+929,019
Communications, Energy & Natural Resources	299,015	517,922	+218,907
Community, Equality & Gaeltacht Affairs	257,810	419,195	+161,385
Defence	839,043	964,377	+125,334
Education & Skills	5,680,888	8,883,040	+3,202,152
Enterprise, Trade & Innovation	1,025,054	2,011,370	+986,316
Environment, Heritage & Local Government	2,307,765	2,195,483	-112,282
Finance	1,122,398	1,453,795	+331,397
Foreign Affairs	543,947	754,217	+210,270
Health & Children	7,954,540	15,324,452	+7,369,912
Justice & Law Reform	1,718,131	2,487,484	+769,353
Social Protection	5,611,921	20,959,799	+15,347,878
Taoiseach	127,792	185,819	+58,027
Tourism, Culture & Sport	393,306	504,980	111,674
Transport	2,030,225	2,758,046	+727,821
(MILLIONS of  EURO)	€30,741,622	€61,178,785	€30,437,163

The National Debt is currently €89.5 billion. The 2010 exchequer deficit to October 2010 is €14.37 billion.

The National Recovery Plan 2011 – 2014 provides for overall savings of 11.43% over 2010 expenditure with the greater burden, in percentage terms, falling on Foreign Affairs, Taoiseach, Justice, & Law Reform, Environment, Heritage & Local Government, Full details of the proposed cuts are as follows :

€ Million % Change from 2010 Agriculture, Fisheries & Food 221,000 -12.57% Comms, Energy & Natural Resources 20,000 -3.86% Community, Equality & Gaeltacht Affairs 35,000 -8.35% Defence 106,000 -10.99% Education & Skills 690,000 -7.77% Enterprise, Trade & Innovation 47,000 -2.34% Environment, Heritage & Local Gov 311,000 -14.17% Finance 85,000 -5.85% Foreign Affairs 187,000 -24.79% Health & Children 1,445,000 -9.43% Justice & Law Reform 370,000 -14.87% Social Protection 2,825,000 -13.48% Taoiseach 35,000 -18.84% Tourism, Culture, Sport 76,000 -15.05% Transport 139,000 -5.04% Other Measure 400,000   €6,992,000

Replacing Cowen now is fraught with misjudgement

The Irish media are full of speculation this weekend about the political future of Brian Cowen.  He has never fought a general election as Taoiseach and consequently has never had the endorsement of the people since he succeeded Bertie Ahern as Taoiseach on 7 May 2008.

Some argue that he will stand down before the next imminent general election.  There is no Constitutional impediment and some argue that a new leader is necessary if Fianna Fáil is to survive.

Those who advocate replacing Brian Cowen before the next general election ought to realise that it is only in failed states that the of head of government position is decided upon exclusively by an elite opportunistic clique. The notion that Brian Cowen should be replaced imminently is tantamount to suggesting that a stranger would take the place of a candidate at an important public examination. Cowen’s legacy and political future must be decided by the people at the next general election. The right of the people in our democracy to return their verdict on the leadership and record of any Taoiseach and his, or her, cabinet is inalienable and should be protected by the Constitution. 

The flesh of this nation has been under attack from smart-alec politicians for 40 years and its skeleton is now imploding as a consequence.  Political degradation and dysfunctional leadership caused the surrender of sovereignty and also dramatically changes the dynamics leading to the next presidential election. It will take more than a four-year National Recovery Plan and spun messages rooted in bland anecdotes of prior accomplishments to restore the prestige and eminence of Ireland across the world. Each of the political parties must recognise this and put forward a first-class presidential candidate who clearly demonstrate integrity, values, wisdom and the capacity to inspire the restoration of the nation’s withered morale.

FÁS fed made at least one property developer very rich

FÁS agreed to spend €275,000 per acre for a 5.6 acre site in Birr in November 2004 that the agency’s own professional advisors valued at €140,000 three months earlier to facilitate the transfer of its head office from Dublin 4 under the Irish Government’s public sector decentralisation programme.  The value of commercial sites in locations such as Portlaoise, Tullamore and Athlone is currently between €70,000 - €110,000 – although there are very few transactions.

The Irish Government’s staff decentralisation programme played a significant cameo role in the property bubble.

The decentralisation plan was to relocate 11,000 civil and public servants to 95 locations outside Dublin. By April 2010, 3,148 persons has relocated. 2,430 of these were in permanent office accommodation and 718 were in new offices but the full decentralisation programme had been deferred to properties in 34 locations. The decentralisation of 6,583 posts at 61 proposed locations have now been deferred.

The Government seriously weakened its own negotiating position with property vendors for three principal reasons

• The entire decentralisation programme was to have been accomplished within 3 years - by 2006
• The destination locations were announced in advance by Finance Minister Charlie McCreevy which immediately triggered price inflation.
• The State had no authority to make compulsory acquisitions for the decentralisation programme.

Rody Molloy, then Director General until he was fired in November 2008 is a native of Birr. The board of FÁS approved the purchase of a 5.6 acre site in December 2004 at a cost of €1.5 million, or €275,000 per acre. The site had originally been part of a 25-acre site owned by a voluntary housing charity who sold it to a developer.

Respond Housing Association made a planning application to Birr Town Council on 19 March 2004 for a major housing development of 224 dwelling, eight apartments, a community building, and two group homes in three and two storey blocks, on Banagher Road, Town Park on the north side of Birr. The proposed housing development caused uproar in Birr among local councillors and the Northside Residents Committee.  The planning permission was appealed to An Bord Pleanála who approved the scheme on 28 September 2005. The housing development did not proceed.

Property consultants were retained by FÁS in August 2004 to assess the value of the site proposed and they concluded that given its particular characteristics the site was worth approximately €700,000, or €140,000 per acre. The site was landlocked although the vendor agreed to provide road access after the contract was signed. FÁS put forward a revised offer of €150,000 per acre which the vendor rejected. The property consultants then apparently raised the valuation of the site to €300,000 per acre following further work and analysis and a deal was done in October 2006 to buy the site for €275,000 per acre.  The vendor was Finbarr McLoughlin (66), a property developer from Kilshane House Tipperary,  who wanted the FÁS deal secured before he purchased the 25-acre site from the housing charity.

This transaction was undertaken independently of the Office of Public Works.  The former Minister with responsibility for the Office of Public Works, Tom Parlon, a native of Birr and former TD for Laois-Offaly, was involved in direct discussions about this transaction at the offices of the solicitor acting for the original vendor, Respond Housing Association on 10 November 2006 concerning road access to the landlocked site.  Parlon contacted the Manager of Offaly County Council in the course of this meeting to clarify the Council’s attitude to providing planning permission for an access road – which was subsequently approved in Parlon is currently the Director General of the Construction Industry Federation.

While this spending splurge was taking place the 400 FÁS employees destined to move form Dublin to Birr refused to budge while only 6 agreed.

Industrial sites with a 999 year lease located in Tullamore, Portlaoise and Athlone are currently on offer for between €78,000 and €117,000 per acre.

FÁS also took a 10-year lease from Birr Technology Investment Consortium on a 708 metre² building at Mill Island, Birr in 2007 at an annual cost of €99,000 that was to accommodate up to 40 staff but just 20 moved so far.  This is a development that qualifies for urban renewal scheme tax breaks.

The agency entered into a contract in December 2006 valued at just over €1 million for the fit-out of this leased building. The landlord’s company was the only vendor invited to provide a quotation – on the basis that this proposal ‘compared favourably with a cost plan developed by the quantity surveyor employed by FÁS’. The total cost of this fit-out cost over a 10-year time frame was 77% higher than the upper benchmark established by the Office of Public Works, according to the Comptroller & Auditor General.

No work has been undertaken on this site pending the review of the national decentralisation programme in 2011 – that will now happen in the context of the IMF having sovereign control of the country.

FÁS has several other offices in Co. Offaly at Edenderry, Portloaise and Mount Lucas, a former briquette factory.  The latter was bought for €281,000 in 2006 and a further  €1.474 million was spent on adaptation and the construction of classrooms which was to function as a ‘centre of excellence’ for the construction sector.

The national decentralisation programme is on ice until 2011 but €43.8 million has been spent on 12 sites in locations where the decentralisation programme is not being advanced. Those sites acquired at a relatively low cost were already in the ownership of a local authority but private vendors with properties in town centres were able to demand premium payments for properties during the era of peak activity.

Ireland ranked 2nd wealthiest–according to Bank of Ireland’s ‘Wealth of the Nation’ report

Ireland boasted 30,000 millionaires in 2006 and the number of millionaires was predicted to exceed 100,000!  The average wealth per person in Ireland, €148,130 per person that year was greater than the average wealth per person in the United Kingdom, United States, Italy, France, Germany and Canada. 

That is how Bank of Ireland viewed Ireland on 10 July 2006, a year in which the members of the Court were paid remuneration of over €5 million but increased to €10.23 million the following year because we were all so invincibly wealthy.  The report was published 10 days prior to the shareholders annual general meeting

'A key defining characteristic of Ireland’s wealth is that it is first generational by nature (peasants were, in other word, wearing shoes for the first time and could afford a toothbrush). with the vast bulk of our wealth having been created in the past ten years. The report highlights that much of this wealth has been created through gains in property investment and through a willingness to borrow to invest further. It has been entrepreneurial and more risk orientated than many other developed countries where inheritance features more prominently

The current allocation of Irish wealth to equities and cash, by contrast, is less than any of the other countries in the report. 'However, we (Bank of Ireland 10 days before the 2006 AGM) predict that this will change as property price increases move back to more realistic levels and an ageing population may act as catalysts to create growing interest in diversification into other assets, primarily investment and pension funds. As wealth grows and matures, the benefits of diversification become compelling and an increasing amount of this wealth will be allocated to other assets’.  This is a natural evolution as Ireland's wealth matures and individuals seek to protect their gains and transfer wealth to the next generation'

'The growth in wealth in the Irish economy has been astounding, (oh shucks!) with net wealth growing by 350% in 10 years. This is after taking into account the level of household debt in the economy and this highlights the rude health of Irish household's finances. We expect that net assets will grow to over €1.2 trillion by 2015, an increase of 80% in the coming decade.'

'Much has been made of the level of indebtedness in the Irish economy, with the pace of growth in debt much higher than in many other countries. However, liabilities as a percentage of total assets have only now reached international averages. While debt as a % of disposable income has increased from 89% to 140% in the last five years, the level of wealth provides an enormous cushion to borrowers (and our borrowers continue to be breast fed until their mothers reach 75 years of ages). Neither the absolute level of borrowing nor the level of borrowing relative to overall wealth are ahead of international norms indeed, we have come from significantly behind other developed countries. What is really interesting is that Irish investors have used much of this borrowing to leverage their positions in property, which, in turn, has been the engine for growth.'

Fears about rising debt levels are overstated as Irish investors leverage assets to secure further growth

This report was based on a survey of the top 8 leading OECD nations, Ireland is ranked the second wealthiest, behind Japan and ahead of the UK, US, Italy, France, Germany and Canada, showing an average wealth per head of nearly €150,000.

The report spells out precisely how rich Ireland has become over the past decade and the direction that this wealth is likely to take in the next decade. The report, covering household savings and investment patterns in an international context, paints an upbeat picture about the sustainability of recently created wealth and suggests that fears about the rising levels of debt are overstated.

According to Mark Cunningham, Managing Director, Bank of Ireland Private Banking:'A key defining characteristic of our wealth is that it is first generational by nature, with the vast bulk of our wealth having been created in the past ten years. The report highlights that much of this wealth has been created through gains in property investment and through a willingness to borrow to invest further. It has been entrepreneurial and more risk orientated than many other developed countries where inheritance features more prominently. The current allocation of Irish wealth to equities and cash, by contrast, is less than any of the other countries in the report.

'However, we predict that this will change as property price increases move back to more realistic levels and an ageing population may act as catalysts to create growing interest in diversification into other assets, primarily investment and pension funds. As wealth grows and matures, the benefits of diversification become compelling and an increasing amount of this wealth will be allocated to other assets. This is a natural evolution as Ireland's wealth matures and individuals seek to protect their gains and transfer wealth to the next generation,'added Mark Cunningham.

The Report states that while property will continue to be dominant, it will no longer be the pre-eminent asset of choice other assets, more particularly equity markets, bonds and cash will come to the fore. In 2005, Irish asset allocation stood at cash 10%, bonds 3%, equities 16% and property at 71%. By 2015, Bank of Ireland predicts that asset allocation will change to cash 12%, bonds 5%, equities at 22% and property at 61%.

Commenting at the launch of the report, the first of its kind in the Irish market, Pat O'Sullivan, Senior Economist and author of the report said:'The growth in wealth in the Irish economy has been astounding, with net wealth growing by 350% in 10 years. This is after taking into account the level of household debt in the economy and this highlights the rude health of Irish household's finances. We expect that net assets will grow to over €1.2 trillion by 2015, an increase of 80% in the coming decade.'

The report outlines that personal disposal income in Ireland has doubled over the past ten years, and it is forecast to double again over the next ten years.

The annual level of personal savings stood at €10 billion at the end of 2005 and this is forecast to increase to €13.5 billion by 2010 and to €24 billion by 2015. The latter figure equates to 14% of disposable income, which contrasts sharply with the recent averages of 1% in the US and 5% in the UK. We have to look to Germany to find a similar attitude to savings, where it approaches 10%.

Average Irish Household Assets and Net Worth 2005 – 2015

€000 per household	2005	2010	2015
Residential Property	542	684	891
Deposits	80	112	177
Pension Funds	64	90	160
Business equity	43	64	96
Investment funds	28	57	106
Direct equity	19	30	56
Commercial property	20	27	36
Gross Assets	796	1,064	1,522
Household Debt	115	200	300
NET ASSETS	681	864	1,222
Financial Assets	191	289	499

The Uduras party continues to swing as public expenditure cuts bite everywhere else

There is clearly no shortage of resources at Údurás na Gaeltachta judging by the 2009 Annual Report which was published on their web site just as our new sovereign leadership (IMF and ECB) arrived in Dublin. Perhaps their reticence is understandable because this report certainly prompts some critical and penetrating questions.

• 10% of the total income (€6,532,902 out of €63,615,000) was paid to board members in fees, grants and other transactions in 2009 – a year when full-time grant supported employment dropped by 720 jobs to 7,473. Taxpayers deserve a detailed explanation of these transactions and an insight into how much of their own cash recipients contributed to grant-supported projects and what sustainable value the State obtained for the taxpayers money.
  Reference http://www.udaras.ie/index.php/corporate_menu/publications/annual_reports_and_statements/1124 Notes 9 and 21 – 2009 Annual Report
  
• Board members obtained €12,813,823 in members fees, expenses, grants and in respect of anonymous transactions since 2005.


• Between 2005 and 2009 a total of €94.28 million was paid in grants while the total underlying employment dropped by 185 jobs from 7,473 to 7,658. These grants included €34.3 million on fixed assets to presumably increase production capacity to create new employment; €3.4 million on property rental subsidies; €11.8 million on employment grants; €29.3 million on training; €13 million on research and development and €2.2 million on grants for no attributable objectives. The scale of this is mind boggling.  What enduring benefit has been achieved for this expenditure?
  
• Travel and Motor Expenses for the staff whose total number declined from 113 to 100 from 2005 to 2009 amounted to €4.26 million. How come it was necessary to spend the equivalent cost of ten business class round-the-world airline tickets for each staff member when nothing demonstrable was accomplished?
  
• Cumulative expenditure in 2007, 2008 and 2009 on building projects that did not go ahead in the last five years €1.86 million. What were the circumstances of this spending? Who obtained this money and why?
  
• Expenditure on buildings since 2005 was €51.5 million, including €16 million since the property market crashed in 2008. How much was spent on the provision of high-speed internet connectivity?
  
• In the light of the foregoing, is there any reason to believe that this agency is actually a State resourced property development company whose capacity to foster enterprise is as dynamic as the capacity of the soil of Bellyferriter to grow grapes to make vintage champagne?
  

Tax yield from Irish agriculture collapses, as EU keep the sector on life support

EU subsidies are the life support mechanism of Irish agriculture.

The tax yield from Irish agriculture collapsed by 90% between 2007 and 2009 – from €817 million to €78 million. This compares to an overall contraction in tax revenue of 26%.

Last year Ireland contributed €1.5 billion to the EU Budget and received €1.8 million from the EU. The Irish contribution is determined by a formula and rules based on certain customs duties, a proportion of VAT and a proportion of Gross National Income.

Ireland’s receipts from and payments to the EU Budget from 2005 to 2009 are as follows:

Year	Annual Receipts - €BN	Annual Payments - €BN	Surplus to IE - €BN
2005	2.4	1.5	0.9
2006	2.2	1.5	0.7
2007	2.1	1.6	0.5
2008	2.1	1.6	0.5
2009	1.8	1.5	0.3

The lion’s share (€1.64 billion) of the money received goes to agriculture and rural development, the largest component being the €1.3 billion for the Single Farm Payment while the balance (€161.8 million) is paid from Structural Funds.

Total public expenditure on Irish agriculture in 2009 was €3.38 billion – for an economic sector whose output is €4.76 billion. The gross added value of Irish agriculture at basic prices was €983 million.

Employment in agriculture has dropped from 114,800 in June 2008 to 84,900 last September. The number of farms in the country has dropped from 128,200 in 2007 to under 115,000 units. The demographic profile of agriculture is similar to the demographic profile of Irish politics – 51% of the farmers are over 55 years of age and only 7% are under 35 years of age.

The land area of Ireland is 6.9 million hectares of which 4.2 million hectares is used for agriculture and a further 737,000 hectares is used for forestry. Over 80% of farm land is deployed for pasture, hay and silage production; 11% is dedicated to rough grazing and the balance, 10% to crop production.

The 2010 budget of the Department of Agriculture, Fisheries and Food to keep this show on the farm amounts to €1.37 billion and it takes 5,232 employees to sustain it a 4% drop in employee numbers since 2009. Their travel and subsistence allowances alone are €9.7 million. The associated postal and telephone charges exceed €9.7 million but they spend €126,000 on value-for-money reviews. That, by the way, is a 59% reduction on the €310,000 spent on value-for-money reviews in 2009. Research and training for the 84,900 remaining employees is €35.7 million.

How will the social partners (i.e. the IMF and ECB) react to this?

EU, ECB and IMF set to put the jackboot into maudlin Cowen

Ireland endured the consequences of an impaired reputation in the global financial markets since September 2008 but this has now morphed into serious doubts about its credibility and the credibility of its Central Bank Commission.  The market will not trust its numbers.

Financial markets are spooked by the losses in Irish banks.  These had been estimated at €11.2 billion but have risen to €45.55 billion, mainly as a consequence of the toxic cess pit – Anglo Irish Bank.

Will the Central Bank Commission survive the scrutiny of the IMF and the EU? Its principal role is to oversee standards of corporate governance in Irish banks and to vet incumbents appointed to senior roles in the banks.  Will an umbilical link between the disgraced board of FÁS, the State training agency, which has been stood down for grievous failure of corporate governance enhance the credibility of this Commission as an umpire of corporate governance standards? 

National Irish Bank, a wholly-owned subsidiary of National Australia Bank engaged in a decade long episode of untrustworthy behaviour which not just undermined the Central Bank from 1988 to 1998 but also undermined the integrity of the national tax system which led to 9 senior managers of National Irish Bank being disqualified to act as an officer of any company.  How can this Commission demonstrate credibility in overseeing the calibre of senior appointments in Irish banks against this background?

Foreign borrowing as a percentage of the Irish net national debt has increased from 28.5% in 2001 to 80.6%. The underlying foreign debt has increased from €10.3 billion to €72 billion. The Irish State deficit from January 2001 to October 2010 has risen to €51.92 billion. This reflects Government expenditure in the decade of €376.85 billion while corresponding tax revenue was €324.9 billion. Retail savings in State institutions account for 13% of the national debt.

The sooner this jaded, depraved, incompetent, lame-duck government of no standards and no class and their administrative peasants and toadies are out of existence the better.

Údarás na Gaeltachta at the Public Accounts Committee

When the Secretary-General of the Department of Community, Equality and Gaeltacht Affairs was recently examined at the Public Accounts Committee he responded to charges that the travel expenses regime at Údarás na Gaeltachta  read like ‘a mini FÁS’ by indicating  that the agency has provided him with assurances that ‘all spending was within rules’.

It is noteworthy that the board of the Údarás did not facilitate public understanding of this important examination by publishing their 2009 annual report on the web months beforehand.  However, a review of the annual reports from 2002 to 2008 suggests that there is ample scope for the Public Accounts Committee to ask some penetrating and insightful questions.

The Údarás has a staff of 107 persons, whose travel expenses between 2002 and 2008 were €7.17 million, an average of over €67,000 per employee – sufficient to cover the cost of 19 round-the-world business class airline tickets for each and every employee.

The Gaeltacht has a population of approximately 90,000 persons – about the same as the population of Co. Wexford.  This represents 5.4% of the 1.66 million people in the country, aged 3 and over, who can speak Irish.  There are 775,000 persons in the national workforce who can speak Irish.

The primary function of Údarás na Gaeltachta is enterprise development.  Total employment in grant-supported firms increased by 622 to 8,193 between 2002 and 2008.  But the total amount of grants approved during this period was €201.47 million and the total amount of grants paid was €122.8 million.  If tax credits rather than grants had been approved the recipient businesses would have been required to generate a profit in the region of €1.6 billion and sales perhaps ten times greater than this sum to qualify for this scale of incentive.

Total expenditure by Údarás na Gaeltachta in this 8-year period was €429.3 million, €19.1 million more than its income.  Expenditure between 2002 and 2006 exceeded income by €30.2 million, attributable mainly to a more aggressive depreciation policy of buildings from 2002.  Why does the Gaeltacht not enjoy the economic vitality of Qatar with such a massive investment inflow to a relatively small population? 

Údarás na Gaeltachta spent over €80.6 million on buildings in that 8-year period.  That expenditure presumably made some vendors very rich.  A total of 1.5 million was spent on ‘building projects that did not go ahead’. But if there was no growth in overall employment why was it necessary for the State to spend so much on construction, especially a time when the construction industry was expanding at breakneck speed and on auto-pilot, heading eventually to its own self-destruction and obliteration?  What proportion of this construction expenditure has yielded an economic return?  Who now bears the risk in respect of that part of the buildings portfolio which is fallow or redundant? 

If the provision of infrastructure was the primary argument for the provision of these buildings, how much was spent on broadband infrastructure given that enterprise is much more dependent on adequate broadband connectivity.  Fast broadband, Facebook, Twitter and Skype removes the disadvantage between the Gaeltacht and the rest of the universe, not empty buildings.

The Údarás is governed by a 20-member board of directors elected by plebiscite.  The cost of members’ fees and expenses of that board during these 7 years was €2.13 million but the PAC might like to examine the context and circumstances of how €8.2 million was paid in grants, or other transactions, to enterprises which employed board members or in which they were otherwise personally interested.  Annual Reports indicate that board members complied with Department of Finance guidelines covering situations of personal interest and did not receive documentation or participate in the board discussion relating to such matters.  But the nature of the these payments remains as watertight as the Third Secret of Fatima while there is some detail provided of grant payments to the general public.  The PAC might enquire with respect to grants, the extent to which recipients invested their personal resources, particularly their own cash, in grant supported projects and what sustainable value the State obtained for the peoples’ money and the peoples debt.   

The Committee might also consider how a 20-person board can possibly govern a 107 person organisation and function as coherent, focused and inspiring thought leaders to an 11-member management.  Should politicians be directly involved in disbursing public money?

85% of Ireland’s sovereign debt is held by foreigners.  The ‘men-in-red-braces’ reflect their verdict on Ireland’s economic leadership at all levels – including the A-team at the Department of Finance and its agencies, through level of credit available and the interest charged on sovereign debt.  Has the time arrived for a review of the State’s efforts to develop the Gaeltacht and is there an opportunity to try a fresh approach that is much less complex in organisational structure, fosters a more enlightened culture of accountability, is considerably less expensive; operates with simpler, but realistic, goals and where those who incur risk also bear the burden of delivery?

How does one discern political reform in Ireland?

The self-serving, ‘cute-hoor’ response of the Government to the High Court decision in relation to the Donegal by-election is the latest twist in the epic tale of Ireland’s spiralling democratic deficit and outrageous contempt for the electorate by a rudderless government that is incapable of reform.

Ireland has now reached the stage where two Independent T.D.’s define our short-term political destiny. Michael Lowry is de facto Taoiseach and Jackie Healy-Rae is de facto Tánaiste. The credibility of social partnership has also imploded because this undemocratic process has been dysfunctional for at least a decade, despite the hundreds of millions of euro spent directly, and without due accountability, propping it up.

It has been seamlessly replaced by a plethora of consultants who believe the can charge the State what they want for services rendered because they control the market for these services. But these people, like the social partners, carry no risk and bear no burden. Why has the Government never reformed these markets? Is it a case that there are simply too many vested interests to appease?

Most believe the cost of the bank bailout at €45 billion to be utterly obscene but when citizens realise that is cost no less than €6.43 billion to actually acquire the next-to-worthless shares in these wretched banks they will be aghast – and not a single person is held accountable for this appalling debacle. This is what happens in a State with no bargaining power and no backbone.

This state of affairs is further compounded by an implosion of leadership, sound judgement and moral authority on the part of a number of key top-level civil servants and supine advisors whose own decisions, or tolerance of the decisions of others, are having a devastating impact on the wellbeing and reputation of our country – not just in relation to public spending but also in relation to the low calibre and doubtful qualifications of certain public sector appointments

It is impossible for the electorate to discern what game the Government are playing with respect to the decision to appeal the High Court decision concerning the Donegal South West by-election. But is certainly is not motivated by their consideration of the people and they are about to face very scorned voters.

Those who intend to be in government speak loquaciously about reform. They would need to extend their horizons in this regard beyond the trivia of 27 ministerial cars to removing the deadbeats whose incumbency of top-level positions in the civil service and connected advisors has this country in a state of paralyzing ambivalence and economic decay.

If a general election is to take place sooner, rather than later, those aspiring to power will need to have explicit, credible and compelling explanation of what exactly reform means in their universe - if they too are not to be greeted with scorn and derision. No more generic waffling please!