If you had landed down into Ireland from Mars, at the back end of last week, you’d have been forgiven for thinking that the country had just had brilliant financial results. The media coverage of the most recent exchequer returns was close to euphoric. Here’s the Journal:
THE STATE FINANCES were buttressed in 2021 by a record €68.4 billion tax take that exceeded expectations, driven by strong corporation and income tax returns as the economy rebounded.
The exchequer is expected to record a deficit of €7.4 billion for the full year with government expenditure of €87.5 billion exceeding the State’s tax receipts, according to exchequer returns for December published by the Department of Finance this afternoon.
“Butressed”. “Exceeded Expectations”. “Driven by strong returns”.
Great news, right?
Here’s the Irish Times:
Government tax receipts surged to a record €68.4 billion last year as consumer spending and employment rebounded from the pandemic at a sharper-than-expected rate.
Year-end exchequer returns, published by the Department of Finance, show tax receipts rose by almost 20 per cent or €11 billion last year despite the negative impact of restrictions to curb the coronavirus at the start of the year.
The latest numbers pointed to an exchequer deficit of €7.4 billion for 2021, an improvement of nearly €5 billion on 2020.
“Surged”. “Sharper than expected”. “improvement”.
Here’s the Irish Independent:
A record tax take last year is helping to plug the budget gap and slash Government borrowing needs despite a spike in Covid cases and a partial lockdown.
The Department of Finance took in €68.4bn in taxes last year, the largest yield ever recorded, Exchequer returns show. The figure was up €11.2bn on 2020 levels and more than €9bn ahead of a previous record in 2019.
Bumper corporate taxes of €15.3bn – 30pc up on 2020 levels – helped to bolster overall receipts thanks to buoyant IT and pharmaceutical exports by multinationals.
“Record”. “Bumper rates” “slash government borrowing needs”.
We won’t go on. The point, by now, should be clear: The media, in lockstep, cheered the announcement of a record tax take and presented it as uniformly great news.
Which contrasts, does it not, with their coverage of Covid 19, and lockdown? There, there are rarely any good news stories. There are only warning signs and danger and “officials worried” and “concern as schools return” and just about every signal imaginable to the reader that things might be about to take a turn for the worse.
The odd thing about that contrast is, of course, that the media is telling two stories that are almost in direct opposition to the reality.
The covid news, as we discussed on Friday, is broadly good. Record cases, yes, but hardly anybody in ICU. The disease is milder. Immunity is high, and growing. We are, or should be, firmly on the road to normal. You won’t hear that, generally, in the media.
Meanwhile, on the tax take, the news is actually very bad, and yet you wouldn’t figure that out, either, to read the takes.
Consider this: These are, indeed, record tax numbers. By themselves, that’s good news. What’s less encouraging is that even with the highest recorded tax take in Irish history, the state will still run a deficit this year – paid for by borrowing – of seven thousand, four hundred, million euros. The highest tax take in history, and it’s still not enough. Or close to enough.
And these two stories are connected. After all, what is driving the surge in spending, if not the Covid pandemic, and all the restrictions and associated and necessary supports that a conservative approach to covid has required?
In the last two years alone, the state will have spent twenty billion euros more than it took in, even with a record tax take. Where is that analysis, in a media that is busy cheering the tax returns and publishing doom-porn about covid?
The facts are these: When you’re having your best year ever, in tax return terms, and still spending billions more than you took in, then you have a big problem, and one that will have to be addressed. It can be addressed in only one of two ways: Billions of euros in tax increases, or billions of euros in spending cuts.
Neither possibility, you’ll note, features highly, or in fact, at all, in the media coverage, which focuses on one side of the ledger only. That is not fake news – the returns are, indeed, real – but it’s certainly misinformation. Which the media usually tells us comes from other people.
The Irish Media receives hundreds of millions in advertising, and direct subsidy, from the Irish taxpayer. When it comes to analysing the news on the issues of the day, the taxpayer is getting a very bad deal. We deserve better than cheerleaders.