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NEW NUMBERS FROM the boffins in the CSO again make a mockery of how we measure economic activity. Sure, on the face of it, last year’s 5.2% GDP growth sounds more reasonable than the make-believe 26.3% recorded in 2015. Remember that prompted Nobel prize-winner Paul Krugman to call out Ireland’s “Leprechaun economics”?
Over the years, many economists in Ireland have argued that GNP – which strips out the repatriated earnings of multinationals – is a better measure of our economic progress.
According to this measure, growth halved from 18.7% in 2015 to a still stellar 9% in 2016. But, even the most sunny-sided economists would struggle to claim with a straight face that this is a good indicator of Ireland’s true rate of economic growth.
Let’s take a closer look at the data for the last three months of 2016
According to the CSO, investment almost doubled from the previous three months to reach €29bn. At 43.5% of GDP for the fourth quarter, Ireland appears to have a similar investment rate to China. In reality, of course, it does not.
We see a clue as to what happened in the trade data. Imports also surged to a record quarterly high of nearly €78bn, a little less than exports, meaning Ireland’s trade balance fell from €18.6bn in the three months to September 2016 to only €1.2bn over the final three months of the year.
In the calculation of GDP, this meant the surge in investment was more than wiped out by a corresponding increase in imports. These freak figures have largely been explained by the redomiciliation of multinationals to Ireland.
How does that work?
What happens is a multinational decides to relocate to Ireland to benefit from our notoriously attractive corporate tax regime.
Through an accounting and statistical sleight of hand, this is recorded as an investment in Ireland, but often also as an import of intellectual property from the multinational’s previous home country.
Thus, little or no cash may change hands. Even if some jobs are created in the host country, these pale into insignificance compared to the amount of money in play. This is not productive investment as we conventionally understand it.
Neither is it a new phenomenon
We know well that big corporations like Apple Inc have long had big operations in Ireland, with huge benefits in terms of tax avoidance. The phenomenon has accelerated in recent years, particularly among US firms.
This explains in large part Ireland’s too-good-to-be-true growth rates for 2015 and, to a lesser extent, 2016. But, this could be the last sting of a dying wasp.
Global rules on corporate taxation are being tightened, while new US Treasury rules introduced in 2016 to scuttle Pfizer’s mega-move to Ireland have already made such tax inversions more difficult.
Spike in Irish investments and imports
What, then, explains the spike in Irish investment and imports during the latter part of 2016? Could it be that the election of Donald Trump on an explicitly protectionist platform caused a rush to the exits before the rules are tightened further?
Or, perhaps US-based multinationals take Trump and Congressional Republicans at their word when it comes to corporate tax reform.
It is expected that the corporation tax rate will be reduced significantly from its current level of 35%. There is also speculation that big US corporations hoarding cash overseas will be offered, essentially, a tax amnesty to repatriate past profits, in the hope that these funds will be used to fund investment domestically.
Late 2016 and early 2017 could be the last chance saloon for US firms wanting to switch their tax headquarters so that they can benefit from any such amnesty in the future.
Over the medium to long term, one would expect increased repatriation of US multinationals’ profits to show up in Ireland’s national accounts as big reductions in GNP. But, again, the negative impact on employment and productive investment in Ireland may be much less than these headline numbers would suggest.
If we can’t trust GDP or GNP to tell us how our economy is doing, what can we trust?
Some have suggested using a hybrid measure somewhere between these two. A simpler approach is to focus on domestic consumption.
If we ignore exports and imports, investment and multinationals’ repatriated profits, we are left with household and government consumption.
These tend to be less volatile, and are probably a better proxy than either GDP or GNP for the evolution of living standards in the country.
So what do these numbers say?
Even though the wider economy, measured by both GDP and GNP, started growing again in 2013, growth in public and private consumption only turned positive in 2014.
Domestic consumption increased by 2.6% in 2014, 3.7% in 2015 and, according to yesterday’s numbers, 3.4% in 2016. This is closer to the level of growth suggested by the labour market.
Even if GDP – or GNP for that matter – is hardly a reliable indicator of Irish standards of living, it still matters. Importantly, it matters for the calculation of the debt and deficit levels permitted under the EU fiscal framework.
In effect, Ireland’s inflated GDP makes it easier for the country to meet the 3% of GDP budget deficit target, and eases the path to the 60% debt-to-GDP target. This means less spending cuts and tax hikes are needed to meet the restrictions signed up to by governments across the Eurozone.
Victor Duggan is an economist and public policy expert, having worked in the OECD, World Bank, European Commission, European Investment Fund and the Irish Labour Party, as well as in the private sector.
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Even though one of them isn’t the birth parent but yi know lets just ignore facts in case anyone gets upset.
@Chris Martin: When a step-parent in a heterosexual marriage adopts a child their name is put on a newly issued birth certificate, so I don’t see the issue if it’s a same-sex marriage. Hope that doesn’t upset you! Great having the person who actually raised you on your birth cert, speaking from experience.
@Megan Ní Fhionnagáin An Bháird: Well then its not a birth cert is it and shouldn’t be called as such. A birth cert should contain the names of your birth parents ie mother and father.
@Chris Martin: Take it up with the relevant authorities then if it bothers you that much. I found it mad at the time that it was called a birth cert but it’s ID that lists the people who raised me and are legally my parents. Makes things less complicated when I need my parents involved in applying for anything.
@Megan Ní Fhionnagáin An Bháird: I agree with you, but I think it could be beneficial to the child to have a link to their birth parent, purely for being able to trace medical history. The birth certificate itself should allow for more than 2 parents. Why not just add in an extra box or boxes?
@Davis Payne: The record is still on file. I personally know who my birth parent is, if I didn’t, I’d be able to get the details if I really wanted them. He’s not on my birth certificate now, which is how I prefer it.
Obviously there are cases where the child does have contact with the birth parent and everyone is happy enough, in which case I’m sure the parents have no issue holding the original and new one in the house somewhere. My birth cert is essentially the same as my younger siblings and we all have the same rights when our parents pass.
@Chris Martin: It’s called a birth cert, because it records who you are, where and when you were born, and the people considered to be your legal parents at the time of your birth. That doesn’t always refer to a genetic relation. In the US, for example, there are many states where, if you are married to a woman, she cheats on you and gets pregnant with another man’s baby, you are still considered the legal father due to the marriage. Even with DNA testing, it can be very hard to get that changed.
Ignoring biological facts , no shock there
@miju irl: birth certificates are not for the purpose of identifying biological parents of a child
@J: yes they are….they identify the father and mother…not parents…the father and mother.
Will it contain a mans name and a woman’s name
Only the biological parents should be named on the birth certificate, ie, only those who created the child, a man and a woman. 2 men cannot create a child together nor can 2 women, suggesting otherwise is insanity.
@Cork Truck Driver: You might take the time to read the current legislation that states that once a woman is married, that man can be deemed the father by way of birthcert even if “no biological connection exists”.
@Cork Truck Driver: what about those families where one parent is infertile and they use an anonymous sperm donor? Should we not identify the dad who will raise the child as the father simply because it’s not his sperm? And then we should list the anonymous donor as the father even though he is not a parent to the child and his sole contribution was to masturbate into a cup for $50? No.
You have a very narrow experience of life and family, Cork Truck Driver.
@Cork Truck Driver: tell that to a number of US states.
In many places, if a woman cheats on her husband with another man, and gets pregnant, the husband is automatically considered the legal father. He can do a DNA test to prove he isn’t, but having the legal status removed is extremely arduous, even if the actual biological father steps forward.
Curious to see if the commenters mouthing off about ‘ignoring biological fact’ and one not being the birth parent have an issue with the fact that in a heterosexual marriage where one adopts their stepchild, a new birth cert is issued with the non-biological parent on it. Hoping for some consistency because if they only take issue with this article there might be some other element of the arrangement that they’re intolerant of, can’t quite put my finger on it though…
@Megan Ní Fhionnagáin An Bháird: Isn’t the original berth certificate is kept as a record of original birth parents, albeit in strict confidence?
@Peter: Being honest my original was old and in tatters, not a clue where it is at the moment and I don’t need nor want it. I’m sure the record is there somewhere, but I’ve nothing to do with it. I’ve had the new format one since (A4 one as opposed to smaller one from years ago), I use that whenever I need to present my birth cert for something.
Anyway my point is if people only take issue with it happening with same-sex couples and not what’s been going on years, their issue is fairly obvious.
@Megan Ní Fhionnagáin An Bháird: Using one piece of PC madness to justify another doesn’t make it right. The definition of a birth cert has been hijacked by th PC brigade and redefined as a parental cert (adopted or otherwise).
@Thomas Sheridan: Ah yeah, having a document with the two people who actually raised you and are legally your parents is just ‘PC madness’. You’re a bit of a snowflake, but at least you’re consistent
@Thomas Sheridan: Ah yeah, having a document with the two people who actually raised you and are legally your parents is just ‘PC madness’. You’re a bit of a snowflake, but at least you’re consistent
@Thomas Sheridan: Ah yeah, having a document with the two people who actually raised you and are legally your parents is just ‘PC madness’. You’re a bit of a snowflake, but at least you’re consistent
@Megan Ní Fhionnagáin An Bháird: This isn’t correct. The Birth Cert is replaced with an Adoption Cert. It isn’t pretending to be a whole new birth cert.
It isn’t about who is raising the child, it’s a biological record of your origins and that’s important info from a sociological pov. In small communities if you don’t know who you blood relatives are you could end up having a sexual relationship with a blood-relative.
Information is important and it isn’t automatically anything to do with reasons other than what is practical to know because of genetics.
@Niamh Kenneally: No Niamh, I was adopted by a stepparent and issued with a brand new birth cert in the new A4 style. Not an adoption cert. I know full well who my blood relations are. My birth cert functions as ID and lists the people that are legally my parents.
@Thomas Sheridan: And what about the Irish same sex couple who used the eggs of one and the womb of the other, where the actual egg donor and biologically linked parent is denied the right to have her name on her child’s birth certificate? Don’t spout generic comments about the problems with today’s pc society when 1. You don’t know the facts on every individual case and 2. It won’t affect YOUR life in any conceivable way except I assume to upset your sensibilities.
@Tracy Moore: Exactly. Certain organisations need you to produce your birth cert or a copy of it as ID to obtain documents/open accounts etc. Having it with my legal parents on it (and one is biological) creates less hassle for me and doesn’t affect anyone outside of our family in the slightest.
@Megan Ní Fhionnagáin An Bháird: You might personally know who your biological relatives are but that’s not the usual situation.
“The new birth certificate (adoption certificate) is normally available through the Registrar General’s Office within 4 weeks. Although it is not an actual birth certificate, it has the status of one and replaces the birth certificate for legal purposes. It gives the date of the adoption order and the names and addresses of the adoptive parents and is similar in all aspects to a birth certificate.” Not a birth cert.
@Niamh Kenneally: My new birth cert has no details of the adoption on it. It literally says ‘Birth Certificate’ at the top and replaced my original. I know my own documents, cheers.
@Megan Ní Fhionnagáin An Bháird: The legal information on the Registrar’s website must be wrong so.
@Niamh Kenneally: ‘ After the Adoption Order Hearing
A letter is given to the parents which confirms that the Adoption Order has been made and provides them with information about how to get a new certificate for the child.
The original birth certificate for the child is no longer a valid document for identification purposes.’
I’ve used my new birth cert for a couple of things and was never asked to produce a copy of the adoption order.
@Megan Ní Fhionnagáin An Bháird:
” Although it is not an actual birth certificate, it has the status of one and replaces the birth certificate for legal purposes.”
@Niamh Kenneally: And it has absolutely no details of the birth parent and doesn’t mention adoption. If it looks like a duck, and talks like a duck…
We’ve veered off from my original point that the people who take issue with this and have no issue with it when it’s a heterosexual couple are showing their prejudice.
@Niamh Kenneally: And funnily I actually agree that it’s not an *actual* birth cert in that it isn’t the document that was issued when I was born. Found it mad at the time that it was called a birth cert, but it’s the document I use and has no mention of adoption. If I needed to give a copy to the bank they wouldn’t have a clue of the background.
@Megan Ní Fhionnagáin An Bháird: The way it’s worded is ambigious for sure.
@Niamh Kenneally: Agree with you there
@Niamh Kenneally: Agree with you there
@Niamh Kenneally: The more pressing issue is the Journal posting half of a comment three times! Rest of my comment said the info is a bit all over the place, I can only confirm what I have. Might be the case where someone who has two adoptive parents might need to produce adoption certificate for things.
@Megan Ní Fhionnagáin An Bháird: I know, it’s all over the place. Anyway the point i was just trying to make before we got side-tracked it that basically I agree with you but just wanted to make the point that there are other reasons people might question this that have nothing to do with caring about anything religious or “family-values”. That’s all.
@Thomas Sheridan: ridiculous comment. It’s nothing to do with PC. If, for example, two women decide to have a family, with one woman carrying the child to birth using her partner’s egg (through IVF), then the woman who gives birth is considered the mother, while the other woman (whose egg was used) is not acknowledged at all and legally has no rights to the child if the other parent dies. I believe same-sex parents are also forced to sign a single-parent affidavit for travelling too. It’s the same for all same-sex parents. It leaves families in a terrible legal situation. It’s ridiculous and the law should be changed. It’s nothing to do with “politically correct”, it’s to do with “legally fair”. Educate yourself.
Hopefully progress will be made to allow for properly agreed surrogacy now. A sister or cousin or friend could help in cases of infertility and/or multiple losses, cancer/trauma involving loss of the womb or in cases of MRKH (born without a womb but may have ovaries).
Only the biologic
@Cork Truck Driver: So should a parent who adopts their stepchild not be recorded as a parent on the child’s updated birthcert? Mmm? Your archaic views belong in the 50′s, which is probably when you were born by the sounds of your contributions.
@Ian Breathnach: have a parent cert then. Birth cert is to identify biological father and mother.
Came here for fake accounts and Christian nuts. Disappointed.
@Niall Lonergan: give it time :-)
@Niall Lonergan: I’d be expecting biology teachers too
@Niall Lonergan: it’s a bit early yet for them
One of the child parents will be left out of birth cert in favor of another person. You can’t fight the nature with the fake laws like this.
@DTM: no it wont.
It’s about time but why does it take so long for new laws to come into effect? Does it also mean that the other same sex parent can now be added to the previous birth cert ?
So many salty folk getting bothered about something that won’t affect them in the slightest. You’d hate to see it : D
How is that different to registering adoptive parents as birth parents?
There’s no keeping the cts happy 2 comments removed
More PC nonsense. Well done Mr Harris. Maybe if u paid some attention to the portfolio u have it wouldn’t be such a mess
About time
“Birth certificate; an official document issued to record a person’s birth and identify them by name, place, date of birth, and parentage”
Not sure where people are getting the “biological parent” term from because the definition of birth cert says nothing about biology. Hmmmm
This law doesn’t include trans parents though
All the people arguing that it should be the biological mother and father – these are couples who most likely have used a sperm donor. They’re not kicking the father off the birth cert by adding the 2nd parent. The child isn’t losing access to medical history of the father because the biological father was never going to be on the cert regardless. The alternative to allowing this would be a birth cert with just the biological mother. Duuuuuuhhhhhhhhhhhhhh
Meanwhile there’s a nationwide drug problem, patients waiting on trolleys for hours, a shortage of ambulances as well as underpaid and overworked doctors and nurses in our hospitals, yet this is what the government invests its time and money into. Nothing but a PR campaign to mask their incompetence and failure to address real issues.
Id worry more about religious labelling of children
S H is an accident waiting to happen
You might take the time to read the current legislation that states that once a woman is married, that man can be deemed the father by way of birthcert even if “no biological connection exists”.
That’s the maddest law even on the planet when kids have to grow up in a situation like this it’s a going to be problem with this add same sex couples The country’s gone mad
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