Growing The Economy

Growing the economy A PROGRAMME FOR ECONOMIC STIMULUS

Growing the Economy _______________________________________________________________________________________________________________________________________________________

INTRODU CTION Almost every industrialised country in the world is doing it. Large and small countries, many with open economies just like ours. Governments are intervening with a range of stimulus measures – to increase employment, sustain economic activity and to repair markets that have broken down in the face of recession.

Except Ireland. Here, the Government is ignoring the damage being done to the economy and to people’s livelihoods by policies that are driving down the economy. They are cutting public expenditure and imposing taxes on ordinary people’s incomes. Other governments are not doing this. For a very good reason. It won’t work. In fact, it will only make the situation worse. The fiscal crisis is the result of the economic decline, not the cause. If we treat the symptoms, the disease will spread. We must address the root cause of the crisis – the appalling increase in unemployment, business closures, and the fear over the future which has cut consumer spending and investment. Only by addressing these issues as a priority can we restore growth to the economy, and reduce the fiscal deficit. UNITE is publishing an alternative programme – Growing the Economy, an ambitious strategy to create and save over 100,000 jobs which is key to addressing the economic and fiscal crisis. In the following pages we outline how we can work our way out of the recession. §

We show where we can invest in the economy to create jobs and growth.

§

We put forward policies to reform the banking system and get credit flowing.

§

And we show from where we can mobilise capital and resources to fund this programme.

What we are presenting here is not the last word on an alternative strategy. Rather it is a contribution to an emerging debate – a debate over how we can create growth. Hopefully, more will come forward with new ideas and perspectives. In this way we can wrest control of the agenda from an ort hodoxy which has nothing to offer people in the way of growth, expansion and, most of all, hope.

JIMMY KELLY Regional Sectary UNITE the Union

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Growing the Economy _______________________________________________________________________________________________________________________________________________________

SUMMARY OF ECONOMIC STIMULUS PACKAGE The fiscal crisis is the result of the economic decline, not the cause. If we treat the symptoms, the disease will spread. The Government has raised taxes, cut spending and slashed investment. This is driving down the economy and making recovery even more difficult. We must address the root cause of the crisis – the appalling increase in unemployment, business closures, and the fear over the future which has cut consumer spending and investment. Only by addressing these issues as a priority can we restore growth to the economy, and reduce the budget deficit. Mobilising the Resou rces An economic stimulus programme can be financed from four sources: Ø

Increased borrowing given our overall low debt levels and cash assets

Ø

Taxing our wealthy asset base

Ø

Reforming and cutting regressive tax expenditures

Ø

Economic Recovery Bonds and reform of the National Pension Reserve Fund

The income arising from job creation and retention, combined with maintaining wage incomes will enable domestic demand to halt and then reverse the recessionary spiral and reduce the fiscal deficit. The Four Programmes There are four broad areas i n which we outline stimulus initiatives Ø

Upgrading the physical and social infrastructure of the nation

Ø

Bringing Irish banks of systemic importance into public ownership

Ø

Maintaining incomes through pay agreements and social welfare increases, and so boosting consumer expenditure

Ø

Saving jobs and investing into our indigenous enterprise through a new Democratic Partnership

Political Stimulus Not only do we need an economic stimulus. We need a political stimulus. The trade union movement has no confidence in the Government’s ability to create and implement the policies necessary to restore economic growth. We need to create a new dialogue with those political parties and organisations that share our values and principles – a dialogue that will result in a fresh, dynamic left-led government.

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Growing the Economy _______________________________________________________________________________________________________________________________________________________

THE NECESSITY FOR A NEW RECOVERY STRATEGY An economic stimulus initiative requires a new budgeta ry arithmetic – one based on job creation and increasing economic activity. Governments throughout the world are stimulating their economies, creating jobs, maintaining economic activity – and accommodating their budgetary policy to this end. Only the Irish Government stands apart – pursuing deflationary, slash-n-burn policies.

The Government’s Failed Budget Strategy The Government’s budgetary strategy will not work. It will not put people back to work, it will increase economic activity, it will not boost consumer and

Stop Digging!

investor confidence.

In October the Government imposed levies and cut spending - to bring the deficit down to -6%.

What’s more, it won’t even achieve the Government’s primary goal as set down by the Government: bringing the fiscal deficit under

In February they cut more spending, including public sector wages – to bring the deficit down to -9.5%.

control.

In April, they imposed more levies and cut more spending – to bring deficit down to –12.75%.

There was only one reason the Government introduced the emergency April Budget: to stop the budget deficit from spiralling to 12.75 percent which they claimed was unsustainable. They introduced a

Now the EU Commission is projecting the deficit will reach – 15.5%.

series of deflationary measures in the budget – levy increases and public spending cuts. They did this in order to bring the deficit down to 10.75 percent.

Every time the Government raises taxes and cuts spending – the deficit worsens.

But guess what? They are doomed to fail:

You’d think they’d learn.

·

The ESRI projects the Government to fail – the deficit will stay at 12 percent1 .

·

The EU Commission claims the Government failure will be even worse – the deficit for next year is expected to spin out of control to over 15 percent 2.

The Government sl ashes and cuts and increases the tax burden on low and average income workers – and they are further away from their goal than ever. Why?

Because the policies they are implementing, supported by right wing commentators and ec onomists, are exactly the wrong policies to pursue during an economic decline. 1 2

ESRI 2009 Spring Quarterly Review EU Commission 2009 Spring projections

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Growing the Economy _______________________________________________________________________________________________________________________________________________________

Employment is the Key It is now projected that unemployment will rise to 17 percent by next year with a strong likelihood of it rising higher.3 Over 200,000 j obs will be lost this year, with another 100,000 next year. This is the biggest single drain on Exchequer finances. The Labour Party4 , citing the General tax increases / public spending cuts

Government’s own estimates, projects the cost of unemployment at approximately €20,000 per person – in lost income

Fiscal crisis persists

tax/PRSI revenue and social welfare costs. The cumulative cost over the next two years from new and continuing Less tax revenue / higher welfare costs

unemployment could reach a staggering €10 billion.

Less income / spending

This does not count the cost of the negative multiplier effects of rising unemployment (falling consumer spending and the impact on businesses reliant on domestic demand, resulting in further

Less economic activity

wage cuts and jobs losses).

More job losses / less profits / wage cuts

Cutting public expenditure or increasing general taxes not only cannot resolve this crisis – it actually fuels it: Ø

General tax increases → less disposable income → less spending → more job losses as those sectors reliant upon domestic demand are hit = less tax revenue and higher government expenditure

Ø

Reduced government expenditure (i.e. consumption) and investment (the only sector capable of generating new consumption and investment) → less economic activity → more job losses → less tax revenue, etc.

And down and down we go. The more we cut, the more we tax, the more we drive down tax revenue and drive up government costs. The fiscal crisis will get worse and economic growth will decline even further. We urgently need a new starting point and a new budgetary arithmetic.

3 4

ESRI 2009 Spring Quarterly Review Eamon Gilmore, TD: http://www.labour.ie/press/listing/1235307604273129.html

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Growing the Economy _______________________________________________________________________________________________________________________________________________________

Stimulus, Job Creation and Fiscal Benefit The object of a stimulus programme is to put and keep people in work. ·

Releasing more funds for

In the US, President Obama

Capital / social / enterprise investment

hopes to create and save 3.5 million jobs from this stimulus package. ·

In Canada, a €51.5 billion stimulus hopes to create 190,000

Reduced annual deficit

Job creation and retention

jobs. ·

In Finland, they hope to create 25,000 person-hours from a stimulus package of €2 billion.

Other government are calculating how

Higher tax revenue / less social welfare

Higher disposable income / spending

many jobs will result from their stimulus packages.5 How much could we expect to create here in Ireland (we will discuss where in the next section)?

Estimating this will be difficult. A general rule is that 15 to 20 percent of a total stimulus package will result in the wages of newly created average income jobs. Much will depend on the type of stimulus programme that is used. According to the IMF, Government expenditure and investment is more effective than tax cuts or rebates. Using a cautious estimate, a targeted stimulus package can realistically hope to create and save over 100,000 jobs over a medi um-term. This would have transformational effect on our fiscal deficit. We would be (a) ‘creating’ new taxpayers, (b) reducing social welfare costs, and (c) halting the slide in consumer spending. That is how you defeat a recession.

5

It should be noted that these responsible governments are aware of the future cost of the debt they are incurring. However, in the US, UK and other countries, the governments have announced that they will not start raising taxes or cutting spending to reduce the debt levels until after their economies are out of the recession. That is a responsible, intelligent way to proceed.

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Growing the Economy _______________________________________________________________________________________________________________________________________________________

A New Budgetary Strategy One of the main arguments against an investment stimulus package is that we can’t afford it. This is a curious argument. The implication is that we can afford to subsidise people on the dole, but we can’t afford to invest to bring those people back into work; we can afford to borrow to buy impaired assets from insolvent banks, but we can’t afford to invest in productive assets. This is an absurd argument. To replace this absurdity, we set out a new two-fold budget strategy to reduce the fiscal deficit: §

FISCAL MEASURES: (a) Increase taxation on unearn ed income, unproductive capital and high income groups with a propensity to save, and (b) Reduce expenditure through the reduction and reform of tax expenditures

§

STIMULUS MEASURES: (a) New tax revenue from job creation / income maintenance strategies, and (b) Reduced Government expenditure through lower social welfare costs as job creation / retention strategies come on-stream

STIMULUS

Increase Tax Revenue from job creation

REDUCE TAX EXPENDITURES

Reducing the Fiscal Deficit

STIMULUS

Reduced social welfare costs

TAXATION High incomes, unproductive capital

By getting people back to work (and, so, creating new taxpayers), reducing Government expenditure through lower social welfare costs and reversing the slide in consumption – the extra revenue and lower expenditure will reduce the deficit. As this virtuous circle gains momentum, extra resources for stimulus, in tandem with reducing the deficit, can be invested to sustai n the momentum. Only when the recession has ended should increases in general taxes and social insurance contributions be introduced – and, then, only consistent with growth in consumption and wages. In this way, we can achieve the long-term objective of bringing the deficit down to a sustainable level.

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Growing the Economy _______________________________________________________________________________________________________________________________________________________

MOBILISING THE RESOURCES FOR ECONOMIC RECOVERY Strategies based on public expenditure and wage cuts, combined with generalised tax increases are doomed. They will not resolve our fiscal crisis – they will only make it worse by driving down economic activity: more job losses, higher public spending (through social welfare costs), less tax revenue. We must mobilise the capital and resources necessary to generate economic activity. Only strategies for growth will break us free from this recession.

From the Government, employers and some commentators, all we get is accountancy dressed up as economics. They have not learned two simple lessons: ü

Our annual deficit is not the cause of our economic decline, it is the result.

ü

No country has ever dug itself out of a recession through deflationary policies.

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They prioritise the symptoms over the disease – the budget defi cit over the decline of economic activity and the mounting job losses. And their remedies are only making the patient worse. We must find a way to regenerate economi c activity. If we don’t, no amount of taxing or cutting will resolve the crisis – in fact, it will only accelerate it. So in putting together a stimulus package, what strengths do we have? What sources of capital can we bring together? We identify four.

Cash on Hand and our Capacity to Borrow There is an on-going fear-mongering campaign regarding Ireland’s level of debt. The facts suggest otherwise. Ireland’s current overall debt remains low by EU standards. Even by 2010, despite the acceleration of borrowing caused by massive job

Overall Debt as a % of GDP: 2010 Projections (Irish Government and EU Commission)

losses and declining economic activity,

83.8 79.4

Ireland will still lag considerably behind other countries. We could borrow €12

73

billion over and above the Government’s projections, and still be below the Eurozone average.

Ireland

EU

Eurozone

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But this doesn’t tell the full story. We currently have €27 billion cash on hand, thanks to the National Treasury Management Agenc y’s far-sighted policy of ‘pre-borrowing’. This is not reflected in

6 7

Indeed, the last time this was tried the world collapsed into the Great Depression. EU Commission, Economic Forecast, Spring 2009

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Growing the Economy _______________________________________________________________________________________________________________________________________________________

the above table. Therefore, our net debt level will be considerably lower – substantially below most other European countries. The Irish economy, therefore, has considerable scope, through cash on hand and our overall low debt levels, to finance an economic stimulus programme while still maintaining a cash surplus. ü

Between cash on hand and our borrowing capacity up to the Eurozone average, we have over €20 billion available to launch an economic stimulus programme from this source alone.

While we are not arguing that all the resources for an economic stimulus should come from this cash-on-hand 8

or higher borrowing – it shows our considerable

If we don’t invest now, we will find it increasingly difficult to pay off our debt. The Government’s policy will be a drag on our economy for years to come. Creating jobs, increasing economic activity and modernising our infrastructure will make it easier to cope with high debt levels. Only in this way, can we expand out tax revenue base and reduce the escalating costs associated with unemployment. That’s the key – creating and saving jobs.

manoeuvring room. We should use this to our advantage.

Wealthy Asset Base Our second strength is the wealth owned by a small group of people who accumulated an extraordinary amount during the Celtic Tiger days. In 2007 Bank of Ireland Private Banking estimated that the top 5% income group, or 75,000 households, own 40% of all wealth held by Irish households. That comes to over €320 billion, or an average of €4.2 million per household. As well, the bank estimates there were 33,000 millionaires in Ireland. Even accepting a write-down of asset values 9

over the last two years, this is a substantial amount. Therefore, we propose: Ø

A Once-off Levy on Capital Assets: an average 5% once-off levy on all wealth in excess of €1 million to be paid over five to seven years, exempting productive assets (businesses, farms, enterprise investments, etc.) and principal residences/homes. 10

This approach has already been accepted by the social partners. In the Framework Document it was agreed that: ‘ . . those who benefited most from the economi c boom should make a particular contribution to the adjustment required.’11 8

We would still want to maintain a healthy cash balance as part of prudent financing of the debt. Forbes estimates that the world’s wealthiest individuals have experienced a decline of 23% of their net worth. If this held true in Ireland, the top 5% would still own nearly €250 billion – a healthy asset base. (http://www.forbes.com/2009/03/11/worlds-richest-people-billionaires-2009-billionaires_land.html) 10 Such a tax would have to be constructed to prevent inequities: it would have to be income related with a sliding tax scale from the lower to the highest levels of wealth ownership. 9

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Growing the Economy _______________________________________________________________________________________________________________________________________________________

A once-off levy on all assets – the accumulation of wealth from the economic boom – is just such a particular contribution. There are a number of other taxation measures that could be implemented immediately to finance an economic stimulus package and stabilise the fiscal deficit Increased taxation on high incomes, unproductive capital and unearned income would have the added advantage of being less deflationary than taxes on low and average income groups (see Appendi x).

Public Expenditure Reform We need real public expenditure reform to maximise efficiencies – not the cutbacks the Government has been carrying out (the attack on children with special education needs was particularly vicious). For instance, tax expenditure makes up over 30 percent of current direct expenditure, over €15 billion. This expenditure covers everything from personal tax credits to capital allowances to property-tax relief and tax shelters.

Much of this is wasteful, economically inefficient and

The EU has launched an ‘excessive deficit procedure’ against Ireland. No memberstate has suffered sanctions for breaking the Maastricht Guidelines. The EU wants Governments to ‘make progress’ to end excessive deficits. However, the EU’s main complaint is that they don’t believe the Government’s projections or strategy to bring the deficit under control. The cuts and tax approach has no confidence. A strategy based on growing the economy, however, can win that confidence and make progress towards ending the deficit.

regressive, disproportionately benefitting ultra-high income groups. As a first step: Ø

Target a redu ction of 7-10 percent of regressive tax expenditures, ensuring that highincome groups bear the burden of this reduction.

This should be part of a reform programme that ensures all tax expenditure – for individuals and businesses – is equitable, efficient and contributes to economic and social wealth. We also support the most rigorous analysis of all expenditure – direct and indirect: stress-testing for economic efficiency and social equity. We must strive to the best European practice in the way we spend money. An example of this is to publish the cost of all capital expenditure projects together with a rigorous analysis of job content and economic return. We must ensure our investment programmes are cost-effective and job-intensive.

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Draft Framework for a Pact for Stabilisation, Social Solidarity and Economic Renewal, January 28th 2009

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Growing the Economy _______________________________________________________________________________________________________________________________________________________

Putting our Savings to Work We support ICTU’s proposed Economic Recovery Bonds. These bonds – which would be made available to all citizens and institutions - would help finance vital infrastructural and capital programmes. There could be different bonds with different levels of risk (e.g. infrastructural, Green New Deal, Enterprise Development, etc.). These bonds could be targeted to a range of savers. Pension funds have already indicated they would be willing to invest over €5 billion in government bonds. More importantly, these bonds would give people a stake in our recovery. Our savings ratio is set to increase substantially. In 2007, we saved 3 percent of our annual disposable income. This is estimated to treble - to 9 per cent this year. With people looking for secure savings at a high rate, the issuance of Economic Recovery Bonds – to regenerate the economy – could be well received and well subscribed. The Government has announced that it will finance bank capitalisation from, among other sources, the Pension Fund. W e agree with this, if only to prevent exploitative private equity funds from taking ownership of our banking system: Ø

The Pension Reserve Fu nd should, in the first instance, be a source of capital for rehabilitating our banking structure.

However, this will only succeed once banks of systemic importance are brought into public ownership (see below). Under public ownership, the Fund’s resources would be invested in ‘clean’ banks, which will drive new credit into our economy, while at the same time providing a commercial return to the Fund. Further, we are seeking a reform and expansion of the Pension Fund’s role to: Ø

Include a pension protection programme to protect pensions, contributions and savings; and, eventually, into a 2

nd

tier earnings-related pension for all workers in both

the private and public sector.

The Government i s charged with protecting occupational protections under the EU’s Insolvency Directive. It is imperative that the Government immediately introduce a pension protection plan so that existing pension payments and pension contributions are protected. In so doing, we would be removing a source of concern to hundreds of t housands of workers – thus enhancing consumer confidence.

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Growing the Economy _______________________________________________________________________________________________________________________________________________________

In the long-term, consideration should be given to allowing the Fund to invest in infrastructural and capital projects with commercial rates of return. The Fund already invests in such projects abroad. This could facilitate a steady stream of investment into upgrading our infrastructure. *** These are the f our sources for mobilising the capital and resources to stimulate the economy and provide sustainable fiscal stabilisation: (a) Cash on hand and borrowing capacity, (b) a wealthy asset base, (c) public expenditure reform and (d) accumulated and future savings. Therefore, Ø

Launch an economic stimulus programme worth up to 3% of GDP each year for up to three/four years.

We not only have the resources to mount such a programme, there is an economic imperative to do so. If we don’t, we will be facing mass unemployment, poverty and emigration that will scar Irish society for years to come.

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Growing the Economy _______________________________________________________________________________________________________________________________________________________

FIRST STIMULUS PROGRAMME Infrastructural Investment We must address our degraded infrastructure. Ireland has one of the worst physical infrastructures in the industrialised world. Our public services are impoverished by European standards. Not only can we increase employment, maintain living standards and stimulate economic activity – we will be in a stronger position to exploit the eventual global recovery.

Physical Infrastructure We must radically rewrite the National Development Plan and transform it into a National Recovery Plan. The NDP was prepared in a very different environment based on 12

assumptions no longer valid . We need to substanti ally increase our investment levels – not only to create jobs and increase economic activity but also to bring our infrastructure up to international standards. And as we pointed out above – such investment must go through accountable and transparent social-cost benefit analysis. This will ensure we are investing in both efficient and labourintensive projects.

The recession should not be an excuse to cutback on infrastructural development – rather, it should be the very reason to expand. The following are some of the key areas (see the Appendix for details): ·

Roads, Rail, Sea and Air Ports: Given our woeful rankings, we must accelerate ‘shovel ready’ projects while commencing new projects, accepting these will have a longer lead-in time before jobs and activity commences.

Ireland’s infrastructure ranks as one of the worst in the industrialised world. Out of the OECD-30 nation group, Ireland sits near the bottom: 26th. We must start now in upgrading our infrastructure to European norms. This can create jobs, raise economic activity and put us in a stronger position to exploit global recover. The last thing we must do is cut capital investment and, so, investment in our future.

OECD Country

Infrastructural Ranking

Switzerland Germany France Finland Austria Denmark UK IRELAND Slovakia Turkey Mexico Poland

1 2 3 4 5 6 12 26 27 28 29 30

Global Competitiveness Index 2008

·

Telecommunications / Broadband: Eircom must be returned to public ownership to facilitate investment in extending and upgrading broadband.

Population was expected to grow by 12% in the ten years from 2007. That is not likely to happen as many new communities workers are leaving and net emigration has resumed among Irish nationals. As for annual growth projections of 4 percent, little needs to be said. 12

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Growing the Economy _______________________________________________________________________________________________________________________________________________________

·

The National Spatial Strategy: Renewed focus on the National Spatial Strategy with accelerated development of Gateway regional economic centres where economies of scale can be availed of. This will provide much of the extra infrastructural capacity needed (e.g. expansion of public transport in major cities/towns and their satellite communities).

·

A New Green Deal: A new Green Deal will involve an epochal shift in energy generation led by public enterprise companies (e.g. ESB, Bord Gais and their subsidiaries). Therefore, all commercial restrictions should be immediately removed. Let’s give Irish companies the chance to develop our natural resources – not impede them as is being down now. This will be complemented by a national insulation drive to bring all our houses up to the highest conservation standards.

·

Urban Regeneration: Provide resources to local authorities so that they can get on with vital urban regeneration programmes. In many areas, these have been suspended due to c utbacks. This will provide badly needed investment local economic activity and direct job creation.

Resources, creativity and political will could begin to halt the recessionary slide and get us back on the growth-path; and just as importantly, provide people hope.

Investing into Productivity, Jobs and Competitiveness ICTU’s proposed State Holding Company should be established immediately to commence investment into our infrastructure. ICTU proposes that all state companies be combined into a holding company, which would combine their vast asset holdings, high profitability and enterprise expertise. Economic expansion could be effected through this new holding company. But just as importantly, new public enterprises could be established. The following are only a few examples: ·

A great advantage of channelling capital investment through a state holding company is that it would be strong enough to borrow on its own – through European loans and bond issues. This would relieve pressure on the Exchequer as such borrowings would be off-the-books.

Telecommunications: bring Eircom back into public ownership and immediately launch a Next Generation broad investment programme.

·

Energy: After lifting all commercial restrictions, empower the ESB, Bor d Gais and Bord na Mona – in conjunction with private sector companies – to launch a New Green Deal as outlined above.

·

Water and Waste: a new public enterprise company to take over responsibility for our water and waste treatment infrastructure, specifically to drive a new investment programme and upgrade our system to European best-practice standards.

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Growing the Economy _______________________________________________________________________________________________________________________________________________________

·

Insulation: A dedicated public enterprise to organise through procurement t he task of bringing all buildings up to the highest level of insulation – creating jobs, reducing fossil-fuel dependency and reducing costs to householders and businesses.

Existing and new public enterprise companies – coordinated through the state holding company – can begin the work of upgrading our infrastructure to European norms: improving productivity and competitiveness, reducing costs and creating jobs.

Social Infrastructure Investment in social infrastructure (public services) has a multi-fold benefit: it creates jobs, reduces enterprise costs, increases people’s disposable incomes through reduced costs for services (this can maintain demand), and improves people’s access to the jobs market. This investment must be prioritised on the principle of which services will underpin economic growth in the future. Here are just two examples. ·

No Child Left Behind: A national network integrating early education and childcare for all children under four years. This is key to future social prosperity and our knowledge infrastructure. This would provide a strong educational foundation for every child while creating thousands of jobs and reduce our

Dumbing Down our Knowledge Economy Forfas has found that our educational performance is poor and getting poorer. In 23 out of 26 categories – including expenditure, teacher ratio, R&D investment, life-long learning, etc. – they rate our performance as ‘poor’ or ‘causing concern’. * Forfas also found that less than 2 percent of Irish three year olds were in education compared to a European average of 82 percent. Our investment in pre-primary education is rock bottom of the EU league. Our system is almost entirely privately funded, unlike the typical OECD system which is 80 percent funded by public expenditure.

shockingly high childcare costs. ·

A primary health care network: providing all aspects of primary care in the community, free at the point of use. This is not just about free GP services. It would include home-helps, physio and occupational therapists, dental, dieticians, psychology, speech and language therapists, and social support workers. This could transform people’s health, create thousands of jobs and ultimately save money as demand is diverted away from costly hospital care.

When Finland was working to overcome its own recession in the 1990s, they invested heavily in their social infrastructure, in particular, education. This is the key to future successes: investing in people – their education, health, social protection and security.

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Growing the Economy _______________________________________________________________________________________________________________________________________________________

SECOND STIMULUS PLATFORM REPAIRING OUR BROKEN BANKS The second major source for economic stimulus is the rehabilitation of our banking sector. This requires a new banking architecture – one that is subordinated to the needs of the national interest. This cannot be done under the current discredited regime. We must take bold steps to repair this broken market

. Public Ownership and NAMA In line with ICTU and the Labour Party, UNITE supports bringing banks of systemic importance into public ownership. This is the most efficient, transparent and accountable means to cleaning out our banking system of impaired assets. It would simplify the work of NAMA – insofar as taking impaired assets off the balance sheets of the banks would only require transferring assets from one public agency to another, without having to price, buy and discount the assets as currently needs to be done. This simplification would allow the Government to focus on recapitalisation needs and is all the more important in light of recent remarks by Michael Somers, Chief Executive of the NTMA before the Dáil Committee on Public Accounts. He pointed to the danger of NAMA becoming mired in litigation and the potential ‘disaster’ of duplicating the work of thousands

The President of the European Investment Bank warned that states, which give blanket bank guarantees, will find it more expensive to borrow. Our high borrowing costs are the result of the 300% contingent liability on the state arising from our guarantee. While some commentators are claiming that investors are turning their back on Ireland, the NTMA is quietly proving them wrong. They have issued four bonds so far this year – all of them over-subscribed. Not only has the NTMA secured nearly half of our borrowing needs for 2009, they are turning bond investors away. With ‘clean’ banks under public ownership we can end the guarantee and make it easier for the NTMA to borrow - and at lower costs to the taxpayer.

of bank workers. ü

Bring banks of systemic importance into public ownership

However, a strategic question needs to be posed: namely, what is to do be done with the rehabilitated banks. Many economists and commentators call for nationalisation to be temporary or instrumental and that, once cleaned out, should be returned to t he private sector – to a similar cohort of shareholders and bondhol ders who got us in this mess in the first place. This would be an enormous opportunity squandered – the chance to create a new banking architecture which would serve the needs of the economy.

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Growing the Economy _______________________________________________________________________________________________________________________________________________________

A New Banking Architecture Public ownership allows a number of strategies to be considered and implemented – strategies that would aid the recovery effort and point the economy in a new and sustainable direction: ·

The immediate establishment of a dedicated enterprise development bank

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to begin the urgent

task of opening up new lines of credit to Irish businesses. Even when the banks are rehabilitated, their credit lines will be necessarily limited if they operate under commercial criteria. A new enterprise bank under public control would be charged with supporting businesses and, so, jobs and economic activity, not with maximising share value. ·

The establishment of a publ ic enterprise retail bank (modelled on US Community Development Banks or the proposed People’s Bank in the UK). This would be charged, within commercial criteria, with serving local and regional business and household needs, enfranchising the financially excluded,

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launching outreach programmes in financial education, etc. Such a

national retail network, with the participation of national and local stakeholders, and possibly linked with An Post banking, could restore trust and confidence to the banking sector. ·

The establishment of an infrastructural, long-term financing and venture-capital and bank, which can create a more organic relationship between finance and innovative, developmental enterprises and projects.

This would not exclude returning at least one bank to the private sector (to maintain competitiveness in the market). But it would allow a full-scale public debate and deter mination over what kind of banking system we should have and to whose benefit.

Sustaining Employment and Experience It is imperative that we sustain jobs in the banking sector – not only to limit the economic damage that banking executives have caused the economy, but also to staff the new banking architecture with experienced personnel. An expanded role for public enterprise in the banking system is not only the best way to revitalise the economy, but to maintain employment. Therefore: Ø

Reform of the banking sector mu st be achieved within social partnership – to maximise the number of sustainable jobs.

***

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Along the lines of the old Industrial Credit Corporation or the Labour party’s proposed National Development Bank. 14 20 percent, mostly from the lowest income groups, do not have bank accounts.

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Once banks of systemic importance are brought into public ownership, we can consider what structures best serve the economy.

The recapitalisation programme should remain with the NTMA.

This would be coupled with a thorough-going transparent, objective analysis of the balance sheets of the Irish Banks by a third party that satisfies the global financial markets. When the banks are returned to profitability, dividends can be paid into the NTMA – either into the Pension Reserve Fund, or in the purchase of Economic Recovery Bonds.

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Growing the Economy _______________________________________________________________________________________________________________________________________________________

THIRD STIMULUS P LATFORM WAGES, I NCOME SUPPORTS AND SPENDING It is urgent that we maintain incomes and spending power in the economy . Otherwise, those sectors of the economy reliant on domestic demand will go to the wall, resulting in further job losses and reduced spending which will spiral downwards – lengthening and deepening the recession. .

Maintaining Wages Workers’ wages and living standards are not an obstacle to recovery but part of the solution. Increasing after-tax income will assist in the recovery of consumer demand. In this respect, IBEC’s and CIF’s unilateral withdrawal from the pay agreement is not only an attack on workers living standards, but an act of fiscal sabotage. The only result of their withdrawal is that companies that can afford to pay the wage deal now won’t do so (those companies that can’t afford to pay were already exempted under the pay agreement). This will reduce tax / PRSI revenue, disposable income and consumer spending – all the factors that are widening the deficit. 15 Ø

Employers should immediately return to the pay agreement.

Going forward there is no better place the start than ICTU’s original pay proposals back in the summer. This focused on two key demands: Ø

Flat-rate Pay Increase: this would disproportionately benefit low and average income groups who are more likely to spend this money.

Ø

A Local Bargaining Clause: workers should be allowed to negotiate higher wage increases – over and above the basic pay rate – where the company can afford it. This would not only sustain demand in the economy, it would create greater tax revenue for the Exchequer.

We need a wage strategy appropriate to the recession. Unilaterally cutting wages and walking away from agreements as IBEC has done – is the wrong strategy.

Maintaining Income We must also maintain income levels of those recently made unemployed. Therefore: Ø

Re-introduce the pay-related element to the Jobseekers’ Benefit.

This will maintain disposable income in the economy, reduce other social welfare costs (housing supplements, etc.) and prevent people falling into debt and poverty. Further, it will provide income support to enter retraining 15

The benefit to the Exchequer if an average income worker is paid the first tranche of the wage agreement is €822 in income tax / PRSI revenue. The benefit to the Exchequer if the company keeps the wage increase is only €175 in corporate tax revenue. Ironically, a significant number of companies have already paid the wage agreement despite IBEC’s actions – including the President of IBEC’s own company.

19

Growing the Economy _______________________________________________________________________________________________________________________________________________________

schemes and re-enter education. Otherwise, people will be forced back into the labour market – often at reduced wages – without new skills.

16

Further, giving assistance families on low and average pay will also help stimulate the economy as these families have a higher propensity to spend. Therefore: Ø

Increase and extend the Family Income Supplement programme

Models created in the US show that providing support for low income families is one of the best ways to spend 17

money in order to stimulate the economy.

Boosting Spending Maintaining spending is vital to protecting jobs in those parts of the economy dependent on domestic demand (the retail sector, personal services, etc.). Temporary, across-the-board VAT reductions are extremely expensive and inefficient, with no guarantee that prices will be reduced. Other approaches should be considered. Ø

The state could issue consumer vouchers to be redeemed in key labour-intensive sectors (e.g. hospitality, personal service providers, etc.).

Creative strategies could be developed: issuing vouchers equivalent to the cost of VAT; offering free train seats to other European senior citizens (on lines where there is spare capacity), etc. Targeted strategies to provide a temporary stimulus could help sectors that employ hundreds of thousands of people and maintain jobs during a difficult period. Most of all, vouchers could only be used to spend, not save.

Targeted VAT Reductions While we are sceptical about across-the-board VAT reductions - the long-term goal should be to reduce our high, regressive VAT rates. This will require a strong monitoring programme to ensure such cuts are passed on to consumers. However: Ø

There is scope for selectively reducing invoiced VAT rates (where the VAT reduction is recorded) that will benefit economic activity.

One example of this is telephone and telecommunication costs – benefitting households and businesses. Another example is the print industry which is competing with substantially lower VAT rates in Northern Ireland. This could be the first step in a long-term strategy to reduce VAT rates.

FAS Training Allowances are lower than Jobseekers’ Benefit which is €210 per week. Most people cannot afford a lengthy spell on either theses rates. 17 Under President Obama’s stimulus programme, income support for the unemployed is estimated to create over 500,000 jobs – or 15 percent of the total job creation target. 16

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Growing the Economy _______________________________________________________________________________________________________________________________________________________

FOURTH STIMULUS PLATFORM Saving Jobs, Retraining for New Ones and a New Democratic Partnership An overriding priority is to save existing jobs. There are many enterprises that would be doing well were it not for the recession. It is also imperative to save key skill-sets and enterprise knowledge – especially in our export sectors. While repairing our broken banks will help release credit back into the real economy we must take further steps – to save existing jobs and retrain for new ones. This programme would constitute a new, far-reaching reform of current social partnership practices – into a new Solidarity Pact.

Redundancy Avoidance Measures We must invest considerable resources to limit the scale of the job losses. It is cheaper to save jobs then to let people fall into unemployment. This is even more so in high-skilled, high-valued added sectors. Ø Launch a wide-range of payroll subsidies and supports to maintain job levels and incomes. These could include financial support for: ·

Top up supplements for workers’ incomes who shorttime to avoid redundancies in a firm. (see box)

·

Career-break / leave schemes

·

Term-time only working and other family-friendly work

The German government provides subsidies to those workers who take up shorttiming, in order to avoid redundancies. They will pay up to nearly 70 percent of the reduced net pay. This is a winwin-win situation for all concerned: workers can avoid the dole and the state avoids unemployment costs while maintaining tax revenue. Companies can save experienced staff and, so, avoid recruitment and training costs they would have to undertake once growth returns to the economy. So far in Germany, over 300,000 jobs have been saved this way.

practices ·

Job sharing and home working

A number of enterpr ises are negotiating with workers and their trade union representatives to keep people in work. The state needs to step in and give this process every support and resource.

A Training and Education Guarantee Our programme will save and create over 100,000 jobs, raise economic activity and modernise our poor physical and social infrastructure. However, we accept that it will take considerable time to return to full sustainable employment and it will be necessary to transform and re-grade skills in society in order to compete in the new economy. During this period of transformation, it will be absolutely necessary we do not lose social contact with the thousands of people unemployed and

21

Growing the Economy _______________________________________________________________________________________________________________________________________________________

unable to find meaningful work. With the unemployment crisis upon us, we face the spectre of a ‘lost generation’ and long-term chronic joblessness. Thousands of people face unemployment for years, even decades, without the skills they need to get a job. People in their early twenties often don't have the experience or training to get into the job market and those over 50 can find it extremely difficult to retrain when they're made redunda nt. As the construction boom turns to bust, we will find thousands of workers, especially young workers, with few skills (not just work skills but also educational skills specifically for those who left school early to take up work). We must act urgently to prevent people from being frozen out of the job market for years to come. We must ensure no one ‘drops out of the system’ and that all people are kept in contact with a dense array of programmes whereby they can help themselves to face the new economic challenges. This is not just about commissioning more ‘schemes’ but rather a fundamental redefinition of the relationship between people and the state. Ø

A new Social Guarantee should be launched. 18

A new GI-bill type programme should be launched

- the Social Guarantee - which would provide all

workers with opportunities to (re)train, return to formal education, take up apprenticeship work, combine short-time working with retraining/educational opportunities, find work through job placement schemes, life-long learning programme, etc. This would be made available to all workers of all ages regardless of their work status. It is immediately obvious that will involve more than just diverting some funds from the Social Affairs budget to training schemes. It requires a fundamental transformation of the relationship between work, training and education. The goal of such a transformation is two-fold: ·

To ensure that everyone finds meaningful work

·

To ensure that no one who is unemployed is without resort to programmes and initiatives to help them back into the labour market

Among other things, it will require all employers to participate in this new programme, with new Labour Clauses in Pub lic Procurement, for example, to ensure an agreed number of employment, training and apprent ice opportunities are provided in contracts. Specific provisions should be targeted for people who have been unemployed for over 6 months.

19

It will further require opening

up all educational institutions to accommodate the needs of workers.

18

This has been proposed by Sinn Fein. A model for this type of programme has been the ESB who recently too 300 redundant apprentices from the construction sector to enable them to complete their training. 19

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During this period of training and education, it is imperative that people are not forced onto the breadline through poverty l evel social welfare rates. All participants should be paid a ‘living wage’. Otherwise, they will be forced out of the programmes to the detriment of themselves, the economy and society.

Enterprise Ireland and Creating Companies of Excellence Creating a strong indigenous enterprise base must become overriding priority under a new enterprise strategy. To this end: Ø

Enterprise Ireland must be enhanced and expanded into our première state enterpri se agency.

We should be under no illusions – governments since the 1930s have tried to create a strong 20

indigenous base and, w ith some notable exceptions, have failed.

How much more difficult will it be

during a recession. But we must begin immediately to put the foundations in place so that when the international economy recovers we will be in a strong position to participate in that upswing. To this end, Enterprise Ireland should be charged with creating Companies of Excellence in the various sectors of our economy t hough a pro-active policy of identifying companies on the basis of their capability of competing in the domestic traded economy, breaking into international markets, and their willingness to participate into Democratic Partnerships at the sectoral and firm level. Enterprise Ireland should be resourced to allow them to address the many deficiencies in our indigenous sector: ·

Fragmentation and lack of scale

·

Managerial deficiencies

·

Difficulties in accessing capital

·

High costs of accessing export markets

·

Poor labour relations strategies

Addressing these problems will require a new Democratic Partnership with the workforce and other stakeholders. We must go beyond social partnership at the top and embed new democratic relationships throughout all layers of the market economy. This has been ref erred to in various Government repor ts but it is now time to take these sentiments off the page.

20

Today, 90 percent of goods and services exports come from the foreign-owned section, a situation that the Enterprise Strategy Group called ‘unsustainable’.

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We must draw on the power of local workforces and their trade union representati ves in all strategies to create successful enterprises: employee-driven innovation, access to equal opportunity and autonomy, support for training and up-skilling, team-working and collaborative problem-solving, upgrading workplace environments and formal participation in decision-making (one small example would be to assist in sourcing materials/services from other indigenous businesses). This will require a revolution in the way we work, a new partnership to create high-road enterprises that can rise to the challenge of the new international environment.

Reviving Public Enterprise For decades, publ ic enterprise made an indispensable contribution to the modernisation of the Irish economy – electricity, telecommunications, air travel, insurance, agricultural and food sector, natural resources, banking. Where private capital failed or refused to invest, public enterprise stepped in and generated wealth and jobs throughout the c ountry. It is time that we revive this policy. We cannot allow the economy to suffer because private capital refuses, or is too short-sighted, to invest. In conjunction with Enterprise Ireland’s new role in creating economic champions: Ø

The state should maintain and sup port vital economic acti vities, in particular, the export sector with a high-skill base – whether this is through publicly-financed equity, public-private partnerships or establishing wholly owned public enterprises.

ICTU’s proposed State Holding Company would be an excellent vehicle to launch this extension of public enterprise, capable of raising equity from private sources and resourcing a range of companies and start-ups. We are witnessing two examples of the necessity for a concerted public intervention to protect vital export and high-skilled sectors: Waterford Crystal and SR Technics. There are many more – companies that would normally be doing well if it weren’t for the recession. It would be economically criminal to allow global brands and companies with high-skill and value-added base to collapse – especially as it will be difficult, if not impossible to create new ones following the recession. It would also be economically criminal to allow our natural resources to be out-sourced with minimal benefit to the economy. Bringing our natural resources under more direct public control through public enterprise could ensure that partnership arrangements are conducted to maximum economic, social and environmental benefit.

Extending public enterprise can preserve these vital sectors and generate new wealth and job creation in anticipation of the eventual international recovery. When pursuing the goal of a strong indigenous enterprise sector we must involve both the private and publ ic sectors in that goal.

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A New Democratic Partnership All of the above should be integrated into a new Democratic Partnership. This partnership would determine new rights and responsibilities for all partners involved: For enterprises, it would: ·

Enhance credit flow by underwriting loans and other credit (e.g. overdrafts, etc.),

·

Increase state sponsored venture and seed-capital for new and development companies, and provide greater ac cess to grant-aid and/or R&D tax credits,

·

Establish temporary sterling stabilisation fund for UK exporters,

Workers under this new partnership would, likewise, benefit from new rights and protection: ·

recognition of employees’ right to bargain collectively,

·

stakeholder participation programmes (e .g. profit-sharing, equity stakes, participation in decision-making, etc.)

·

the right to information such as transparent financial/profit statements,

·

introduction of family-friendly work practices

A Democratic Partnership will place rights and responsibilities upon all participating parties – Government, employers and employees – in a democratic, transparent and accountable manner.

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THE NEED FOR A POLITICAL STIMULUS The programme we have just outlined will need to be forensically targeted and strategically rolled out. It will need to balance infrastructural investment (which will have a longer-term lead in time) with immediate measures to get job creation off the ground. These will need to run in tandem with job retention initiatives and policies that maintain income and, so domestic demand. Finally, all this will have to be combined with fiscal consolidation measures that have the least deflationary effect.

The trade union movement has no confidence in the Government’s ability to implement this type of recovery economics, any more than it has confidence in its current economic policies. It has no confidence in deflationary strategies – slash and burn policies – that is driving unemployment to ever higher levels while economic activity is driven to ever lower ones. There is no future for working men and women with these policies. We need an alternative. We need alternative economic policies – policies founded on growth. But to achieve that we need a political alternative to drive those policies. In short, the trade union movement needs to change ‘partners’ because there is no future in the current partnership. UNITE is a proud affiliate member of the Labour Party, with good working relationships with a range of progressive political and social organisations. It is time to create a new alliance in Irish politics – one that is rooted in the values and principles shared by the trade union movement and progressives throughout this island. UNITE is committed to this new politics, one that can provide people with a real alternative to the Government’s failed policies. We are committed to creating a new partnership in Irish society. And we are committed to working for a Left-led government that can emerge out of this partnership. Only a Left-led government can bring the dynamism, vision and courage we desperately need to confront this great economic challenge. The Irish economy needs an economic stimulus. And, just as importantly, Irish society needs a new political stimulus. The two go hand-in-hand.

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APPENDIX 1 Budgetary Consolidation Measures Here is only a sample of taxation and expenditure measures to begin fiscal consolidation in tandem with stimulus measures:

Once-Off Levy on Capital Assets

The top 5 percent of households owned, in 2007, €320 billion in assets. We have proposed the levy be applied to assets over a €1 million threshold (which would include thousands more than just the top 5 percent). Allowing for property write-downs since 2007 and the exempt productive capital / investments, this one measure could, on a conservative estimate, net the Exchequer approximately €1.5 billion over the next seven years.

Reduce Tax Expenditures

A modest target of saving 7 to 10 percent on regressive tax expenditures would earn an additional €1 billion a year. One small example is the Labour Party’s proposal to end interest relief for landlords. This would earn over €800 million. Ending the remaining propertybased tax reliefs would earn hundreds of millions Euros more. Were ICTU’s proposal to abolish all tax shelters without a proven economic gain included, this figure could increase again.

A Property Tax on all NonPrincipal Private Residence:

ICTU’s proposal, on a conservative estimate based on the revenue arising from the Government’s minimal charge of €200, would net the Exchequer €400 million.

A New Rate of 48 percent for High Income Earners

If applied to incomes over €150,000 in the form of a levy, ICTU’s proposal could earn over €400 million per year.

Taxing all Income– from Capital and Labour – the Same

One example of ICTU’s suggestion would be to double inheritance and gifts tax (raising them to their previous level of 40 percent). This would earn approximately €320 million per year.

There are a host of other measures that could be enacted. One small example is to prevent companies from deducting salaries over €500,000 per year from corporate tax. This would send a clear signal that the taxpayer will no longer subsidise excessive executive salaries.

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APPENDIX 2 Sample Macro-Economic Effect When Governments invest in their economies during a recession, they hope to raise economic activity – create jobs, increase consumer spending and investment, etc. This will raise GDP, increase tax revenue (more people employed, more spending, higher profits) while reducing government expenditure (less unemployment benefit). In this way can the recessionary slide be, first, halted and, then, reversed. This effect can be measured through what are called multiplier effects. It measures the increase in GDP for every €1 invested by the Government. The following are the measurements used b y President Obama’s administration. Investment / Spending

GDP growth for every $1 invested by the Government

Increase Infrastructure Spending

$1.59

Extend Unemployment Benefits

1.64

Temporarily Increase Food Stamps

1.73

General Aid to State Governments

1.36

As can be seen, the i ncrease in GDP is higher than the actual investment. Generally speaking, government expenditure has a higher multiplier effect than tax cuts (especially as there is no guarantee that tax cuts will be spent by peopl e; if they save it there is little benefit to an economy in decline). Of course, no economy is the same and they will react to different programmes in different ways. For instance, there is a danger that stimulus investment could ‘leak’ out of Ireland’s open economy, owing to our small domestic market and high levels of import (see next Appendix). Therefore, in constructing stimulus programmes, we must be careful that the benefit of the investment programmes stay within the economy to the best extent possible. A Sample Macro-economic Calculation GDP Projections: Government and New Investment Strategy 2010-2013 (€ billion) Government Projections

New Inves tment Strategy 212 197

182 167

171

2010

28

196

Let’s assume an investment of up to 3 percent of GDP annually over the next four years - between €5 billion and €6 billion each year. Using an extremely conservative multiplier effect (0.75), we could expect the GDP to be

185

approximately €16 billion higher than

176

under the Government’s current 2011

2012

2013

projections.

Growing the Economy _______________________________________________________________________________________________________________________________________________________

While gross borrowing will rise by €21.5 billion, net borrowing will be much less, because the investment programme is designed to put peopl e back to work. In effect, a stimulus programme widens the tax base by creating new taxpayers. Compare this to the Government’s deflationary strategy, which narrows the tax base by letting people fall into unemployment.

Again, using the Government’s tax

Projected Debt and Interest Costs as a % of GDP: 2013

projections (they project tax revenue will be 21.2 percent of GDP next

Government Projections

year, rising to 22.3 percent by 2013) we find that tax revenue under a

77

New Investment Strategy

79.2

new investment strategy increases by €8.7 billion over the four-year period. That would reduce the fiscal 4.2

deficit in each year, leading to an overall net debt increase of €13

Overall Debt

4.3

Interest Payments

billion. Where would this leave us by 2013?

Much the same place as where we might be under the Government’s strategy.

21

That’s because

while the debt will rise, so will the GDP – so the proportion remains the same. Moreover, this doesn’t count the savings on social welfare expenditure. But there is one crucial difference – under a new investment strategy, the economy will be in a stronger position to pay off its debt: ·

More people employed

·

More people retrained for the new economy

·

Stronger physical and social infrastructure – making the economy more competitive

·

More enterpri ses in place

·

Higher incomes, more taxpayers, fewer people on unemployment benefits

·

Less poverty and the damagi ng social effects of long-term unemployment

We need to modernise our economic base during this recessionary period in order to be ready to face the competitive challenge on the other side of the recession. If we don’t, we may be facing into years of flat-line growth even when we are no longer in technical recession. This is a recipe for continuing mass unemployment and continuing fiscal deficits.

21

We would point out, however, that the Government’s projections have already been thrown off course. Therefore, on current trends, the overall debt will be higher under current policy and, so, higher under a new investment strategy.

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APPENDIX 3 A Note on ‘Leakage’ One of the objections to a stimulus programme in a small open economy is that it would ‘leak out’ out of the economy through imports. Any stimulus would, therefore, end up assisting other economies. There is no doubt that framing a stimulus programme for a small open economy is more difficult than an economy with a large home market. That is why such a package would need to be carefully crafted and forensically targeted. The following should be considered: §

Investment in infrastructural job creation – in both the physical and social sectors – will have less of a leakage than, say, general tax cuts (e.g. income, VAT) or similar fiscal measures.

Even so, such investment must be carefully considered to measure thei r import density. For instance, while we need to invest in our rail network, it might be best to first prioritise roads as more of the products are produced in the home market. Another example is ICTU’s No Child Left Behind. A programme of rolling out universal early education / childcare for all children below the age of four would rely on two sectors: education and construction. Both of these sectors have a low level of import density. §

22

The creation and retaining of jobs will create higher disposable income. This will, of course, involve leakage if people spend that money. However, it should be noted that a substantial amount of increased personal consumption since 2000 has occurred in personal, recreational and educational service sectors – over 1/3 of the increase in non-housing private expenditure went here. And these are labour-intensive sectors.

§

In addition, even imports provide a series of domestic jobs – from the port and transport, to the warehousing and wholesaling, to the retail outlet: all these involve domestic labour. So when people buy an imported item (e.g. a pair of shoes) part of the price goes outside the country but a large part of the price is paying for domestic activity.

Therefore, in constructing a ‘targeted’ stimulus package appropriate for a small open economy, it will be necessary to be sensitive to these and other aspects of our economy – in order to maximise the gain to our domestic sectors and minimise the loss in ‘leakage’.

So we shouldn’t be seduced by the argument that we can’t have a stimulus programme because we are a small open economy. Instead we just have to work harder and smarter.

22

The import density in the education sector is only eight percent, reflecting its labour-intensive character; while in the construction sector import density is 26 percent – still relatively low.

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Unite Published by UNITE the union Irish Regional Secretary Jimmy Kelly 26-34 Antrim Road, Belfast BT15 2AA Tel: 02890 232381 55-56 Middle Abbey Street, Dublin 1 Tel: 01 8734577 15 Merrion Square, Dublin 2 Tel: 01 6611063 This document is downloadable in PDF Format from www.unitetheunion.com

FC/2069/06.09