Thursday, July 31, 2008

Lisbon-parties' hypocrisy on funding

Even before the Irish people's democratic decision to reject the fatally-flawed Lisbon Treaty, (which would have deepened the democratic-deficit in Europe still further), the source of Libertas funding was a bane of "yes" campaigners. To the elite, the possibility of the 'mainstream' parties being so decisively outspent by this upstart pro-business group with financial interests abroad (like many FF/FG benefactors) with no elected representatives was tantamount to heresy. Note the observations of the 'Paper of Record' on the matter today: "Of the €11.8 million spent during the last general election campaign, less than €2 million could be publicly traced. This gap in legislation can encourage external meddling in our domestic affairs. Spending by the "No" campaign in the Lisbon referendum, and particularly by Libertas, exceeded that of all the major parties. But we will never know the source of the money." To be lectured on outside interference by a newspaper whose support for the Treaty, if realised, would have led to unprecedented outside interference in our internal affairs by Europe and by the European Court of Justice in particular (through the Charter of Fundamental Rights), is very ironic. But the gift of irony is not lost on the other mouthpieces of the European federalist project either. The eternal Dick Roche, Minister for European Affairs and arguably the face of Fianna Fáil's "yes" campaign, charges that statements by Libertas' about it's funding are "simply not truthful". According to figures compiled by the Institute of Advertising Practitioners in Ireland (IAPI), which monitors advertising spend in the outdoor and print media, on the internet, on TV and in cinemas, the anti-Lisbon Treaty group spent €912,753 on advertisements in places such as newspapers, billboards and on buses. Throughout the campaign, the organisation, responding to different media, gave differing figures about its budget, before finally settling on a €1.3 million figure, insisting that the money had come in small donations." It is clear that if you add up the figures that the budget must have been above €2 million," Mr Roche claimed. "It comes back to the question, where did they get their money from?". Labour spokesman Joe Costello likewise slates the organisation as: "It is unacceptable that a single wealthy individual whose business interests are largely based outside this country should be able to use his wealth to influence the outcome of a constitutional referendum and at the same time not have to disclose the source of the funding.".

The "yes" side are the last people with a right to lecture others on fundraising. The report of the Standards in Public Office Commission (SIPO) for 2007 is instructive. They found that the State’s 14 registered Dáil political parties disclosed just 13 per cent of what they claimed they spent in their General Election campaigns. Sipo said political parties disclosed donations worth €266,485. Sinn Féin and the Greens received €187,223 and €29,750 respectively from their elected representatives. Fianna Fáil and Labour each disclosed three donations totalling €19,044 and €18,648 respectively. Both Fine Gael and the Progressive Democrats furnished no donation statements. Fine Gael has filed no disclosures since 2001. Political-parties are only required to disclose political donations over €5,079. The report indicates that Fianna Fáil, Fine Gael, Labour, Sinn Féin, the Greens and the PDs spent €10.2 million in last year's General Election - te vast majority of which is undeclared. Fine Gael’s representatives and unsuccessful candidates disclosed in donations just 7% (€191,095) of what was actually spent, compared to 18% for Fianna Fáil (€648,000) and 1.6% (€8,079) for the Progressive Democrats. People in glass-houses shouldn't throw stones. The right to fundraise should not be the preserve of elected officials, who all too often in world history have been shown to be prone to inducements to act and advocate against the public good, as the Act of Union and the French parliament's 1940 vote to establish the Vichy Regime show. We must never return to the dark says preceding the McKenna judgement which removed the ability of yes campaigns in referenda to crowd out dissenting voices by monopolising both fundraising and airtime to peddle propaganda for their causes.

Friday, July 25, 2008

European Court rewards sham marriages

In yet another encroachment by European bureaucrats on internal Irish affairs, the European Court of Justice has ruled that Ireland must grant residency to the spouses of EU citizens. The case concerned four couples living in Ireland who appealed a decision by the Irish government to deport them because their spouses - the husband in each case - was not an EU citizen and had never lived lawfully in another EU member state.Under EU law, EU citizens can work, study and live in any of the 27 member states. Under Irish law a spouse from outside the European Union must have lived in another member state first in order to get residency rights. However the court ruled that this is in breach of EU law on the free movement of citizens. "The right of a national of a non-member country who is a family member of a Union citizen to accompany or join that citizen cannot be made conditional on prior lawful residence in another member state," said the court ruling. "The [EU law] applies to all Union citizens who move to or reside in a member state other than that of which they are a national, and to their family members who accompany them or join them in that member state." The court also said that a non-EU citizen can benefit from the law on rights of spouses "irrespective of when and where their marriage took place and of how that spouse entered the host member state." European law states that all EU citizens and their family members can work, study and live in any of the 27 member states, provided they have a residency permit in the member state.

The case was taken by four African men - who had been denied residency here - against the Department of Justice. One of the plaintfiffs was Cameroon national Blaise Metock, who came to Ireland in 2006 and married fellow Cameroonian Ngo Ikeng, who had residency in Ireland and UK citizenship. Another case concerned Roland Chinedu from Nigeria. In 2006, he married German national Marlene Babucke, who was living in Ireland but was refused residency rights. But the ruling is set to make the rights of member states on their immigration policies clearer.It states that the host member state "is, however, entitled to impose penalties, in compliance with the directive, for entry into and residence in its territory in breach of the national rules on immigration." In the light of persistent reports that the residency-rule is being abused for people-trafficking - such as reported by Jim Cusack in the Irish Independent - this ruling will be a cause of great concern for an Irish public already concerned by the stormclouds of recession and the huge rise in unemployment, which has already risen to 5.7% and which economists believe will spiral to 7% in 2009. Cusack reported on a scam involving the payment of thousands of euro to Latvian women by Pakistani nationals to attain residency in Ireland. After today's ruling, the word has gone out across the developing-world that the institution of marriage can be used to circumvent the immigration-controls of Western Europe. In this context, it becomes all the more essential that Justice Minister Dermot Ahern stand firm against pressure from leftwing elites to back down on his Immigration, Residence and Protection Bill which will tighten controls on marriage by non-EU nationals. Today's ruling evokes echoes of the Chen case, whereby a Chinese woman attained residency rights arising from her child being an EU citizen by virtue of being born on the island of Ireland. As in 2004, a loophole has emerged that must be closed, not merely to fulfill our responsibility to our own citizens, but also to fulfill it to our European partners not to allow Ireland to become a backdoor to circumvent their immigration and residency-controls. Cases like these also demonstrate the federalist agenda of the ECJ, and strengthen the case for impeding passage of the Lisbon Treaty which enshrines the Charter of Fundamental Rights into European law. This situation cannot be allowed to stand.

Monday, July 21, 2008

Robinson's rants against homosexuality

In what has become routine from the DUP politician, Iris Robinson, wife of the Northern First Minister Peter Robinson, has - according to the House of Commons log Hansard - launched another tirade against the gay community. According to Hansard, the House of Commons record of debates, she stated "Hansard reported her as saying that "there can be no viler act, apart from homosexuality, than sexually abusing innocent children." Naturally the gay community are outraged at their adult relationships being demonised in this way. But it is hardly surprising considering the long legacy of bigotry emanating from that party over the last 36 years of its existence. The Catholic community in the North know only too well that this is the case. Iris Robinson, who just happens to be chairwoman of Northern Ireland’s health committee, caused uproar recently when she told a BBC Northern Ireland radio programme that homosexuality was an “abomination” and that she felt “nauseous” just thinking about it. Needless to say, the gay community did not take kindly to her remarks. Indeed, a complaint was made to the police on the grounds that Mrs Robinson’s comments constituted a crime in that she was fanning the flames of homophobic hatred in a part of the UK that is already a lot more homophobic than most. The province’s first lady was unrepentant and produced the following reply: “I am defending the word of God. I think at the moment there is a “witch-hunt” to curb or actually stop or prevent Christians speaking out and I make no apology for what I said because it is the word of God. But at the same time, I was very careful in saying I have nothing against any homosexual. I love them; that is what the Lord tells me – to love the sinner and not the sin. And, just as a murderer can be redeemed by the blood of Christ, so can a homosexual.”

Some will argue we need to make allowances for such a bigoted party that played such a huge role in keeping the Troubles going through wrecking the Sunningdale Agreement and nearly wrecking the Good Friday Agreement aswell, but I beg to differ. In September 2004 the British government decided to postpone a vote in the House of Commons on the Civil Partnerships Bill to avoid a clash with talks aimed aimed restoring devolved rule in Northern Ireland. In November 2006 in the NI Assembly, the DUP voted in favour of a motion condemning British government plans for equality legislation for homosexuals, which resulted in a 39-39 tie and the consequent failure of the motion. Speaking against the Equality Act (Sexual Orientation) Regulations, Jeffrey Donaldson claimed the regulations would punish people with deeply held religious convictions, saying "All six of the world`s major religions are opposed to homosexual practice. Judaism, Islam and Christianity all teach that homosexual practice is sinful..Not all Honourable Members may agree with that, but it is a sincerely held view by Christians and people of other faiths. The regulations will interfere with the freedom to manifest to one`s religion because these are new restrictions." In 2007 in a magazine interview, Ian Paisley Jnr. MP commented about homosexuality:"I am pretty repulsed by gay and lesbianism. I think it is wrong... I think that those people harm themselves and - without caring about it - harm society. That doesn't mean to say that I hate them. I mean, I hate what they do". As persons constantly in the public eye and responsible for the well being of those they govern, the law-abiding people of Northern Ireland are entitled to be respected by their political leaders. Robinson's, Paisley's and sentiments, like the "Save Ulster from Sodomy" campaign of her former party leader Dr.Paisley, would not look astray in the Ireland of the 1950's - nor indeed of the Ireland of the early 1990's when such prejudices were not uncommon down here in the South. It is surely ironic that the party that once taunted the Republic as "priest-ridden" should now find itself in the position of being priest-ridden in its attitude to moral issues and more so than the South, which has transformed socially and in its attitudes to religion in the last 16 years in particular.

Wednesday, July 16, 2008

Health ruling a victory for consumers

Wednesday's Supreme Court ruling, striking down Mary Harney's decision to impose Risk Equalisation as a breach of existing legislation, is a long overdue victory that should warm the hearts of all health insurance consumers. The Government argues Risk Equalisation - effectively a subsidy from commercial rivals in the insurance industry to VHI - is necessary to maintain "community rating" i.e. to ensure the absence of discrimination on the basis of age regarding the pricing of health insurance premia. But international evidence simply does not support this contention. Indeed there is strong evidence that risk-equalisation keeps premia high for all subscribers regardless of age, and that the form of Risk Equalisation the Government is trying to embark on raises moral problems such as the lac of age-disparity in terms of VHI and Quinn health/BUPA Ireland's subscriber-base, as well asbeing regressive in terms of transfer of resources from poorer subscribers to wealthier ones. A number of sources confirm that the Government's case for Risk Equalisation is wrongheaded. In particular I would like to highlight TCD Professor Seán Barrett's reply to the Report of the York Health Economics Consortium (YHEC) for the Health Insurance Authority (HIA) dated November 2003 titled Risk Equalisation and Competition in the Irish Health Insurance Market; and to the Letter to BUPA Ireland from the Chief Executive/Registrar of the HIA dated 15 March 2005 containing a determination for the period 1 July 2004 to 31 December 2004, a market positive equalisation adjustment (MPEA) from BUPA Ireland to VHI of €16,715,770.

Section 2 of the report of the Advisory Group on the Risk Equalisation Scheme(1998), examined the health expenditure patterns of persons aged 38, the average age of BUPA Ireland members, and 44, the average age of VHI members. The age difference between members of VHI and BUPA Ireland can be expected to fall further over time. The impact of VHI’s forty year earlier entry to the market in 1957 compared to the BUPA Ireland market entry in 1997 will diminish even in a market characterised by a small rate of switching. Already, for example, there was no disparity in the age group 45-54. Both VHI and BUPA had 18% of their membership in that age group. As this cohort ages the average age differential will fall further between VHI and BUPA Ireland. The biggest increase in the proportion of an age cohort who have made a health insurance claim is in the age group 35 to 44 years. Before entering this cohort 39% of respondents had made a health insurance claim, on leaving it 63% had made a claim, an increase of 24 points in the age cohort which contains the average age of both VHI and BUPA members. The rate of additional claimants slows to 2% of the age group aged 45 to 54 and 5% in the age group aged 55 to 64. Both VHI and BUPA have average membership ages in the range 35 to 44 years that is in the age group with the highest rate of new claimants. So the age-argument for forcing Quinn healthcare to subsidise the VHI falls flat. In fact for female subscribers, the data would seem to call into question whether it should be the VHI subsidising Quinn.

The report of the York Health Economics Consortium (2003) (YHEC) revealed that the average VHI premium at €435 was 33% more than the average BUPA Ireland premium of €327 (p.41), and that “the cost of private health insurance is an important determinant of whether to purchase cover” and that” lack of affordability is one of the main reasons for not having insurance cover.” The high income elasticity of demand for health insurance suggests that the incomes of BUPA members are lower than for VHI members thus questioning why the proposed transfers are supported on community rating or equity grounds. A further serious equity problem for the proposed transfers from BUPA Ireland to VHI is the subsidisation of the most expensive VHI plans by the lower premiums paid by BUPA Ireland members is another serious example of the regressiveness of risk-equalisation. According to Appendix 5 of the Report of the Advisory Group on the Risk Equalisation Scheme (1997), the lower cost VHI Plans A and B with an average premium of £160.33 and £229.29 respectively had surpluses of £4.8m and £7.0m. On the other hand, the higher cost VHI Plans, C, D and E had losses of £3.4m, £4.1m and £2,6m on average premiums of £354.43, £433.61, and £648.14. The true or economic cost premium for Plan A was £114.70, a reduction of 28% on the price charged while the true premium for Plan E was £731.30, an increase of 13% on the price charged. The Advisory Group found in its examination of the VHI low and high cost plans that “the claims frequency in each age band increases as the plans become more expensive.” (p.86). The unweighted average price of the plans receiving cross subsidisation, €479, is 2.5 times the unweighted price of the plans generating the funds for cross subsidisation implies that price and affordability are important factors in the decision on how much to spend on health insurance the transfers within VHI are likely to be substantially regressive. The further funding of these regressive transfers by levying BUPA Ireland members on lower premiums increases the regressivity involved in these transfers. Under the proposed transfer of €34m a year from BUPA Ireland to VHI a low cost BUPA essential health insurance cover with a premium of €272.39 would be levied to cross subsidise VHI Plan E costing €1,316.33 per adult. The price of the most expensive subsidised product under the HIA proposal is 4.8 times the price of the product to be levied in order to finance the cross subsidisation. The average BUPA premium was €327 while the average VHI premium was €435. Therefore, the price of the plan was 33% greater than the price of the average product to be levied to finance the cross subsidisation. CSO data shows that expenditure on health insurance rises over all ten income deciles. In the top decile, incomes are 10.1 times those in the bottom decile but health insurance expenditure is 22.9 times greater. Section C of this report deals with the HIA letter to BUPA Ireland requiring the equalisation payment of €34m annually from BUPA Ireland for transfer to VHI which had operating profits of €73.3m (before unexpired risk reserve) in their accounts to February 2004.

The Government needs to go back to the drawing-board and take a more hands-off approach to the health-insurance market. VHI needs to be privatised, given more commercial freedom, as well as being required to abide by the same open-enrollment rules as its competitors. The present system serves to entrench an inefficient monopoly through barriers-to-entry that penalise new entrants to the market. Risk Equalisation as proposed is premised on foundations that do not exist. Competition deserves to be encouraged not pilloried.

Friday, July 11, 2008

Government must block ESB price hikes

The news that the ESB is to seek a 20pc price hike will if granted, drive the average annual bill up to a staggering €1,100. It is up to the Commission for Energy Regulation to sanction all such rises. Before it does so, it had better think hard about the hardship they could bring and factor in the human as well as the financial cost. If granted -- and it could be in early autumn -- it would add about €45 to the average two-monthly bill and push the average bill for a year to more than €1,100. And this from a semi-state that made profits of €440 million last year. Sustainable Energy Ireland (SEI) has estimated that 10% (144,171 homes) were experiencing fuel poverty -- meaning they spend more than 10% of their disposable income on heating costs. In Ireland, electricity prices have increased 61% over the past five years- this is the highest energy price inflation anywhere in Europe. The cost of electricity has also recorded the highest rate of increase since 2000- up 41% in a move that could threaten the competitiveness of Irish businesses. A study of European gas and electricity markets shows the cost of electricity in Ireland since 2000 has soared to almost nine times the average EU inflation levels. A major and immediate concern facing the Irish enterprise sector is the need to have an energy supply that is secure and also competitively priced. The price of electricity in Ireland has risen from below the EU-15 average in 1996 to 13% above in 2006. The SEI report focuses on key energy trends in the residential sector since 1990 and found that while energy used by the sector grew by one-third, the residential sector’s share of overall energy usage dropped. This is because energy use in other sectors such as transport is rising even faster. Irish households spend €2.5 billion a year on energy, and this figure is likely to rise sharply as fuel prices continue to increase. The report notes that electricity prices have doubled since 2000, and natural gas prices have risen by 87 per cent.

Of course, this once more highlights the gross inefficiency of the ESB in particular and the public-sector in general in this country - a cause of growing annoyance to the public. There exists a litany of damning evidence for this - in 2006 a consultants report found that high labour-costs and inefficiencies were adding €100 million on bills, compared to other European homes. These inefficiencies are certainly not unconnected with the position of the ESB as a state-owned monopoly that lacks incentive to lower prices and therefore - as the profit-motive would dictate - costs. In that context, the failure of former and current Energy ministers Noel Dempsey and Eamon Ryan to implement the Government White Paper on Energy Regulation is to be lamented. It stands to reason that were the transmission-grid to remain in the hands of the ESB, a conflict of interest would exist between allowing competitors in the electricity-market to utilise it on the one hand, and maintaining such ownership on the other. A preview of what I am talking about can already be seen in the telecoms market where the mistake was made of maintaining Eircom's ownership of the local-loop at the time of privatisation. As a partial consequence of that decision, Ireland has remained in the slow-lane in the growth of broadband in this country - even behind some Eastern European EU members. A Government-commissioned 2006 Deloitte Report calculated that the average wage of an ESB worker was more than double the average industrial wage at €92,000 - rising to €142,000 at the Poolbeg power plant. As an economic liberal, I firmly believe the solutions to rip-off Ireland can be found primarily in the opening up of the electricity, gas, public transport, legal-profession and other sectors to greater competition, in a context where barriers-to-entry and the dead hand of the State are removed. This seems as good an example as any of why this is needed. In the context of a continuing semi-state monopoly, price hikes like these constitute a tax-increase to all intents and purposes, and experience from the 1980's shows the folly of such an approach during a recession. The public and the private-sector can no longer afford to be sacrificed on the altar of public-sector extravagance.

Wednesday, July 9, 2008

Former Minister Seamus Brennan dies

It is with sadness that I learn that the veteran former Fianna Fáil minister Seamus Brennan, TD for Dublin South, has died. Leaders from across the political divide have been paying tributes to the former cabinet minister, Séamus Brennan, who died this morning. Mr Brennan, 60, had been unwell for some time and died in the early hours of this morning at his home in Churchtown in Dublin. Tributes have poured in from across the political-spectrum. In a statement, President Mary McAleese expressed her sadness at the passing of the former Fianna Fáil minister and paid tribute to his contribution to the country.'Séamus played a major role in the building of the modern Ireland,' she said. 'His many talents were such that he could have been successful in several fields, yet it was a mark of the man that he chose to devote those gifts to public service and the public good. His achievements and contribution will leave a lasting mark on our country.' The Dáil held a minute's silence in his memory after deputies expressed their sympathy to Mr Brennan's wife, Ann, and their six children. Taoiseach Brian Cowen described Brennana as astute and capable minister, while Fine Gael leader Enda Kenny said he brought "a deep human understanding to all aspects of politics and could always be relied upon to respond in a calm and measured way to any crisis". Health Minister Mary Harney praised him for having "one of the most professional constituency organisations in the country and won the confidence of Dublin South time and time again, without dail". Michael O'Leary, chief executive of Ryanair, credited Mr.Brennan with introducing competition in the aviation sector.

He was first elected to the Dáil in 1981. A Galwegian by birth, he moved to Dublin in the 1970s, representing Dublin South from the time the constituency was created. A prominent member of the "gang of 22" that opposed Charlie Haughey's leadershop in the early 1980s, his reservations about the former leader were vindicated by the revelations of the McCracken Tribunal a generation later. He served in the Cabinets of Charles J Haughey (Tourism and Transport, Tourism, Transport and Communications), Albert Reynolds (Education) and Bertie Ahern (Transport, Social and Family Affairs and Arts, Sport and Tourism) but asked not to be appointed to the Cabinet due to illness. He had been on the Fianna Fáil front bench continuously since 1987. As a long-time admirer of Seamus Brennan's career and policies, I think the nation is the worse for his passing. His plans for the opening up of the Dublin bus market to competition in particular would have benefited the travelling public there. And the selflessness with which he declined to run for the FF leadership in a 30 year career in spite of serving at some of the highest levels of government only serve to emphasise his selfless devotion to serving the public rather than himself. Irish politics and society is the pooring for his passing. The removal of the remains of the late Séamus Brennan will take place to Holy Cross church in Dundrum at 7am tomorrow evening. Burial will take place after 12pm Mass on Friday.