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The education cuts… And as ever we are told there is no alternative… October 31, 2008

Posted by WorldbyStorm in Irish Politics.
15 comments

As reported on the Oireachtas website, Minister of Education Batt O’Keefe responded to the debate last Wednesday night as follows:

Before I comment on some of the outlandish claims made this evening, and the scaremongering that has gone on in the past two weeks about the claimed impact on schools and children, I want to first go back to one basic premise as the starting point for any reasonable or rational discussion on this issue. We must accept that the dramatic changes in world economic circumstances, changes that are challenging Governments the world over, require decisive action. Or are we to pretend, as some seem intent on doing, that somehow here in Ireland we can carry on regardless?
The budget was about striking a balance between setting an appropriate level of public expenditure, making measured changes to taxation and setting an appropriate level of borrowing. It is simplistic and dangerous to pretend that expenditure on public services could be allowed to grow as though domestic and international economic conditions were as healthy as they were in recent years. Those on the benches opposite are being outrageous with the people when they offer—–solutions that enable them to avoid putting forward difficult options for keeping expenditure under control.

I find this a most interesting line. “Simplistic and dangerous”… eh? Why so? Let me refer once more to our financial sector which is currently underpinned by state guarantee (although a vague one at that) and may well, if Vincent Browne is correct, have to be part nationalised as has been done in other states. I think the comparison is instructive. We are told about the centrality of financial market and institutional stability to the well-being of our economy. This is true, however much one might wish that we lived in a different economic context. And so when said financial market and insitutions encounter near-catastrophic difficulties every sinew of the state is stretched to support them. To the point where guarantees that might potentially bankrupt the state are given – and for an example of how eventual bankruptcy might operate in future look at the plight of plucky little Iceland, learning the hard way that rhetoric about independence only goes so far in this world, particularly when allied with a peculiarly smug self-satisfaction centred on financial acumen – and hey, does that attitude sound familiar…

But in the Dáil yesterday there were some interesting straws in the wind from Fianna Fáil that speak of a particularly hard-nosed approach. Consider the following from Cork Fianna Fail TD Michael McGrath who said that

…conventional political analysis suggests that the departments of social welfare, health and education should be protected from cutbacks.

But he claimed this analysis ignores the fact that these three departments account for 78 per cent of current gross Government expenditure. “The reality is that it is impossible to bring the Government finances under control without addressing these three departments,” he said.

And so it begins. Having had their brush with political destruction the FF Deputies are newly enervated. The inevitable attacks on basic provision appear.

Now throughout my childhood I was repeatedly told that education was the bedrock of our future prosperity. That was true, and remains so today. Yet somehow the idea that we can continue to fund expenditure on it in a context of a growing population is ‘simplistic and dangerous’.

Let’s also remember that the situation on the day prior to the Budget wasn’t one of an education system basking in the fruits of the boom. If anything quite the opposite. Funding was parsimonious and intermittent across all sectors from primary to third level. Large scale projects did reasonably well, day to day spending much worse. My direct experience of the latter attests to constrained or shrinking budgets since the turn of the decade, and my not entirely indirect experience of the former and indeed secondary education supports the points being made by those working in those areas.

It is difficult to point to the most retrogressive elements of the Budget as regards education… would it be the cuts in the free book scheme and library funding? How about class size increases? The – now admitted – loss of at least 1,000 primary school teaching posts in a system which was already significantly underfunded across decades and at a point in the education cycle of a child when such losses will have the greatest negative outcomes. One of the more painful sights of this week was seeing John Gormley, a man whom I have considerable time for, wilt under the questioning of Brian Dobson on RTÉ News when asked how he could stand over cuts that would see a cohort of school children suffer significant impacts on their education, whatever about the future educational situation.

What is the answer to that question? How is it somehow correct to sacrifice the potential and prospects of a child today for supposed educational jam tomorrow? And the reality is, that for all the talk about protecting the most vulnerable in our society, there is no answer.

But then, how can Batt O’Keefe seriously defend the idea that any cut in education is not worthy of serious critique, and that his rhetoric of ‘outlandish claims’ and ‘scaremongering’ does not reflect well upon him? Cuts mean that someone, somewhere, and in these instances we are talking about school children, will find some service or provision missing or time that previously existed to assist them no longer available. In societal terms the implications of that truth deserves a response a little bit more nuanced and considered than furious hand-waving… particularly a hand-waving which on the one hand summons up the spectre of global financial crisis to keep us in line and on the other seeks to minimise the effect of those cuts.

Let’s look at one of those implications. The Irish Times gives a useful overview of one area, that of language support teaching. In a context where there has been a significant, and welcome, influx of newcomer students the necessity to ensure that they attain a good standard of English is obvious. The Irish Times noted how the present situation where a school can have one language support teacher for every 14 newcomer students up to a total of 6 teachers. The Budget imposes a ceiling of 2 support teachers.

The impact of that on all students is predictable.This makes something of a mockery of the idea that the Minister puts about that these cuts merely indicate a return to a pre-existing status quo. These are challenges that have developed across the decade, there is no way to return to the pre-existing situation.

But remember the Minister of Education tells us that it is ‘simplistic and dangerous’ to argue that there are other ways to deal with the financial crisis.

He went on last Wednesday night to argue that:

We have heard suggestions that there are easy alternative taxation measures that can somehow solve all these difficulties. This is populist nonsense. Let us remind ourselves that in the mid-1980s we followed the route of high taxation and significant borrowing, and we had difficulty recovering from that folly. We also should remind ourselves that it was by pitching the burden of taxation at an appropriate level that we made Ireland attractive for foreign direct investment and enabled private enterprise to flourish.

And this morning, what do I read but reports that the Taoiseach has made similar statements to business ‘leaders’.

Speaking at a business round table organised by the Economist magazine in the Conrad Hotel in Dublin, Mr Cowen said: “Our day-to-day spending exceeds our revenue coming in by over €1,000 for every man, woman and child in the State. Ten per cent of the cost of every teacher, doctor and nurse is paid for from borrowing.

“This will have to be paid back by future generations of Irish people. We cannot simply borrow our way out of trouble or return to the days of punitive tax rates . . .,” he said.

So – for example – reinstating the extra percentage point on the higher rate of tax although it would immediately net us somewhere around €400 plus million (when cut that resulted in €480 million in lost revenue, but I’m a reasonable man and I accept economic activity may have diminished in the interim, although how much remains to be seen) is somehow beyond the beyond, is somehow ‘punitive’. A strange definition of punitive…

But then this is in the context of a government, and commentariat that simply cannot accept that taxes should go up as well as down – dependent upon circumstance.

And the Minister is – of course – the man who thought that…

“If I was to withdraw State funding from fee-paying schools, that would have a catastrophic effect. The issue is not under examination.”

Crazy talk, to even examine dealing with state support for the private sector – eh? Whereas cutting services to the most vulnerable in our flagging state system… Well, here’s some more crazy talk…

The Teachers Union of Ireland (TUI) has some thoughts on what the impacts of this are going to be on families. They make for sobering reading, not least because they contextualise the cuts in terms of their impacts on school children and their families.

At the march we heard:

The ASTI’s vice president Joe Moran [call] the Budget mean-spirited and misguided and that that it would affect every young person in second-level education. Mr Moran said Ireland comes 27th out of 29 OECD countries when it comes to spending on education relative to the country’s wealth.

And in yesterday’s Irish Times a piece by Sheelagh Drudy, professor of Education at UCD, which while comparing Finland and Ireland pointed up a staggering disconnect between political rhetoric and actuality in the context of education:

OECD education figures show that Finland consistently spent a higher proportion of its gross domestic product (GDP) on education than Ireland from the early 1990s to the mid-2000s – even as it was just emerging from its very serious economic crisis.

In 1990, Finland spent 5.96 per cent of GDP on education, compared to Ireland’s 5.2 per cent; in 1995, it spent 6.3 per cent, compared to Ireland’s 5.2 per cent; in 2000, it spent 5.6 per cent, compared to Ireland’s 4.5 per cent; and, in 2005, it spent 6 per cent, compared to Ireland’s 4.6 per cent.

And the contention that we sit at 27 out of 29 OECD countries in relation to expenditure on education relative to GDP would appear to be true. Because if you go to the OECD site you will be able to download some irritatingly macro-laden Excel files which indicate that – for example – in 2004 (for which the latest figures are available) expenditure on educational institutions as a percentage of GDP was 4.6% , as against an OECD average of 5.7%. And this in a context where the number of students enrolled in all areas of education as a percentage of the total population at 24.4% was higher than the OECD average of 23%. And here’s the funny thing, this was during the so-called ‘boom’.

Indeed the OECD in its 2006 Report on Ireland [The policy brief with main findings can be downloaded here, note that it is in PDF format] stated:

Ireland has continued its exemplary economic performance, attaining some of the highest growth rates in the OECD. After a remarkable decade, per-capita income has caught up with and overtaken the EU average.

Yet spending on education remained mired at the bottom of the OECD tables.

So what we have, essentially, is a Government which seeks to defend cuts in a system already in a poor state by contrast with other states, despite our relative prosperity.

And let us note some of the OECD’s thoughts as regards an answer to “What needs to be done in the education sector?”:

Maintaining high rates of productivity growth will also entail continued efforts to upgrade skills. Reforms at all levels of the education system are needed. At the earliest stages, pre-school attendance is low while classes are large and of short duration. International experience shows that integrated systems, which combine pre-primary education and crèche-based day-care, have higher quality for children and provide greater parent satisfaction. Priority should therefore be given to reducing class sizes, extending sessions and creating seamless pre-school and day-care facilities at the same location.

In secondary schools, too many youngsters are leaving without upper-secondary qualifications. They are doing so not because of a hot job market – their employment performance is worse than their counterparts in other OECD countries – but because of inadequate help for students who are struggling. There is a shortage of remedial or catch-up classes and the special programmes that are available focus on children from disadvantaged backgrounds rather than those who are having learning difficulties. Overall, Irish 15 year-olds are good at reading but only average in maths and science. Recent changes to primary school curricula should help in this respect.

I refer to all this because it provides a reasonably objective and dispassionate view of matters. And moreover, if one reads further down one will find suggestions as to funding of third level which I would very much disagree with. So this is hardly an analysis coming from an unvarnished left of centre perspective, but is no less worthy of consideration for all that.

And the thoughts of those on the ground are instructive. As the IT noted on Wednesday:

At post-primary level, the student-teacher ratio has been raised from 18 to one to 19 to one. The Department of Education believes that this will result in 200 fewer teachers in the system. The TUI says 1,200 teaching posts will go.

Is that ‘scare-mongering’? it would appear not.

Principal of Castleknock Community College John Cronin agrees that the department has miscalculated and says the impact of the increase will be huge.

“The naivety of them to think that this increase is a simple matter of an extra student in each class is unbelievable,” he says. “They simply do not understand how a secondary school works.”

Which would appear to be the situation. And as also noted in the IT report:

Cronin is set to lose four teachers.

“It will impact on class size, of course. We have an open enrolment policy so we have students with special needs such as Down syndrome and Asperger’s syndrome. This will certainly affect the quality of their teaching and learning. We will try to minimise the effects, of course, but there is only so much we can do.”

And there’s an iron logic to this. Because with teacher numbers going down the capacity within a school to teach a broader range of subjects diminishes. Bad news for those, apparently, central to our future economic progress such as science.

Worth remembering too that this is from a Fianna Fáil that time and again said that it would reduce the pupil teacher ratio.

One of O’Keefe’s favourite lines, when he’s not talking up the apocalypse, is that the cuts will merely bring us back a year or so… and the follow-on of this is the priceless ‘one step back to take two steps forward…’. But we didn’t start at a position where cuts in education can be absorbed in the way he suggests.

Look, I can go on, but what’s the point? This shabby Budget introduced by a curiously inept government has exposed a void at the centre of our polity where the nostrums of the centre right, hidden somewhat by years of economic growth, are coming into sharp focus once more. If you don’t know about these issues or want further detail look here…

As ever the problem is that for far too many in our political class the belief is that we run an economy first and last and always and that the society which that economy is meant to serve is near irrelevant, to be bought off with the continual reiteration of low taxation. Note what O’Keefe said on Wednesday night… In order to maintain existing jobs and create replacement jobs for any that are lost, we cannot discourage private investment by taxing it out of existence…

Again, is he really suggesting that one or two per cent on the higher rate of tax would result in such an outcome, or that a properly graded progressive tax o higher incomes would do likewise? It is widely accepted that at the time the government introduced the one per cent cut there was a strong lobby against the proposal both inside and outside government. So his words ring very hollow indeed.

I hate overblown rhetoric, I really do. Ten years of listening to talk about the last two governments being paragons of neo-liberalism does that to a person. But I think it fair to say that we’re seeing the transition to one of the most unapologetically functionally right-wing governments this state has seen – well, certainly in my lifetime. One which unashamedly proscribes ‘toughness’ for the weakest while protecting the strong. When we read comments that seem to place economic platitudes above all else and push social and economic justice to the margins then we’re not in Kansas anymore, and certainly not Berlin.

Welcome to Boston, circa 1980.

Some further thoughts about the current Budget woes… October 28, 2008

Posted by WorldbyStorm in Irish Politics.
6 comments

Some points made over the weekend in the Sunday Business Post are worth considering. But perhaps not for the reasons the author of those points might think.

Cliff Taylor, writing about the current Budget debacle, has an interesting analysis of the situation. He argues that:

The government’s decision to back down on the over-70s medical cards and the 1 per cent income levy may have been politically essential, but the brouhaha has distracted from what should have been the key message from Budget 2009. Put simply, if economic conditions continue to deteriorate, we will be facing a full-scale public finances crisis.

First he makes a point that is central to his later argument…

Even if the relatively optimistic assumptions underlying the budget are broadly met, the government still faces a huge job in trying to keep borrowing from spiralling higher. Either way, many more groups will be following the over70s, the students and the farmers onto the streets over the months ahead. Taxpayers may be among them.

To which one can only ask, which ones… for therein lies a tale.

He comprehensively outlines the various problems:

Next year, according to Brian Lenihan’s budget sums, we will have to borrow €4.7 billion to fund current spending – in other words the day-to-day costs of running the country.

When you add in further borrowing to fund state capital investment spending, total borrowing (using the EU general government measure) will be over €12 billion, or around 6.5 per cent of gross domestic product (GDP). Borrowing to fund investment projects is justifiable. Borrowing to pay for day-to-day costs is another matter.

The reason for the rapid turnaround is the extraordinary collapse in property-related tax revenues. Here the real problem for the exchequer is not so much the drop in prices as the lack of activity. Without second-hand houses being sold, stamp duty is not paid; without new homes being build and sold, Vat receipts are hit.

Which leads to the following deplorable situation…

The difficulty for the government is that its authority in addressing this situation is now questionable. But if we have marches on the street every time there is a cutback – and row backs here, there and everywhere -we will never get to grips with it and we risk entering a very damaging downward spiral of higher taxes and slow growth.

…

There is no magic bullet. Opposition noise suggesting that somehow the money can be found by taxing the ‘‘rich’’ is nonsense. There is no easy way out. But the first job for the government is to communicate the gravity of what we are now facing into.

Interesting, isn’t it? The idea that ‘taking the “rich”‘ is ‘nonsense’. And note that the word ‘rich’ is in inverted comma’s. Of course, that raises another question. Just why is it ‘nonsense’? To dismiss the idea out of hand is inadequate as a response, particularly since he earlier notes that:

And then there are taxes. Further hikes are inevitable. Any hope that the carbon tax would be a revenue-neutral levy – with money raised through taxing polluting fuels redistributed through other tax or welfare measures – will be quietly forgotten. Next year’s carbon tax will have to raise a whack of money.

Other significant tax increases will also be necessary, unless the knife is really taken to spending. The risk is that higher taxes further depress growth and spending, prolonging the recession and hitting employment.

So, let’s get this straight. Tax increases are ‘inevitable’, but taxing the ‘rich’ is not a solution, or not even part of the solution. And note that he suggests initially that ‘taxpayers’, as if some sort of breed apart, may well be next out on the streets – presumably, though, he regards ‘taxpayers’ as defining those on certain incomes… but which, if not inclusive of ‘the rich’? We can only surmise that for him the taxes must be soaked from the broad mass of taxpayers and those with the wherewithal or the cunning to evade such measures will continue to do so.

Odd that. Michael Taft has been parsing the outcomes from the tentative notion of raising revenues from taxes on the… er…rich and super-rich and arriving at some very compelling conclusions. Moreover his approach would be at least partially detached from productivity in the economy and therefore essentially neutral in its impacts on economic activity.

I like that solution. A lot. But this is a Fianna Fáil/Green Party/rump PD Coalition, so calculating the odds of that being implemented – or at least a serious tax taking that format, since there were some noises about such a measure over the weekend perhaps from an FF desperate to grab back its ‘populist’ garb – I come up with a figure close to zero (and curiously I seem to get the same figure for any Fine Gael/Combination of others Coalition). So for something a little less heady, consider Finfacts which notes that in 2006 some 31.9% of PAYE taxpayers were on the higher rate, or some 620,900 in total. Now if we were to add even a minimal increase of a percentage point to that rate that would make an addition to the public finances. Not huge, admittedly, but something. But seeing as I’m all for progressive taxation being… progressive, and not restricted to PAYE earners either, I would hope that we might see a sliding scale for those on greater and greater gross incomes. Indeed Finfacts has an interesting quote from Revenue on the costs the reduction of tax rates incurred during the past decade. Hard too to see those on the higher rate who were brought into such a regimen – if it were pitched at that rather low introductory rate – finding too much to complain about, and although granted in a time of reducing economic activity the tax base might dry up, well, we still have the suggestions of Michael Taft. So both those on, what shall I call them, ‘higher’ incomes (and check out the CSO figures on employment, most interesting) and those who are actually rich and very very rich indeed would be given the opportunity to do their ‘patriotic’ duty. Still, I note that Taylor doesn’t recommend the government going out and impressing upon those the need to face tough times.

Returning to Taylor again there is a certain unreality to his thoughts, as when he argues:

Somehow, amid all the post-budget noise, the gravity of the situation facing the public finances has got lost. Unless we get a grip we will be heading back to borrowing figures of 8 to 10 per cent of GDP and a rapidly rising debt burden. This would have a disastrous impact on confidence and business investment of all kinds.

Except that there already is a disastrous impact on the confidence of business investment of all kinds through the melt-down in financial institutions (something, by the by, that Vincent Browne also convincingly points up some major issues with the current government bail-out, which as he notes has not stemmed the precipitous dip one bit since its announcement).

And then let us note that far from there being ‘no magic bullet’ Taylor actually does propose something that will help… except it’s the usual solution that the centre-right is now entranced by.

One way to progress might be a much accelerated early retirement scheme [in the public sector]. Time will tell how the government addresses this one. Cutting non-pay elements of day-to-day spending is equally difficult, as it tends to hit services to the public directly. Yet there is surely room here for a cull of a whole range of programmes and initiatives. Again, the key issue is how this will be achieved.

But a better question might be how this is meant to assist the economy, an economy which has grown with, broadly speaking a low growth rate in the public sector during the last decade.

I find this concentration on the public sector, and aversion to the very idea of progressive taxation (which is implicit to Taylor’s argument) fascinating. Yet again we see the state portrayed as an entity whose function is (with reluctance) to prop up a financial sector which has comprehensively failed – and is continuing to do so (those stats of Browne’s are pretty scary), and which is otherwise there almost as an inconvenience whose assets (the public sector) are to be looted by the ‘productive’ sectors of the economy. That such an approach is entirely self-serving (in a sectoral sense) appears to utterly escape its cheerleaders in the media. But it would be worthy of further scrutiny and publicising in the broader political arena by a left which has been given a stunning opportunity to makes its case.

Meanwhile, from yesterday’s Irish Times…

A spokesman for the Green Party said they recognised it was a difficult poll finding for the Government, coming at a time of unprecedented international calamity in financial markets.

“But for the Green Party, it is a solid result in keeping with opinion poll trends since entering government 16 months ago. People recognise we are there to do a specific job on environmental and other issues,” he said.

Yes, but which ‘other issues’?