A new system of measuring how the Irish economy is performing has been proposed by Labour leader Brendan Howlin.
As of now the standard method for measuring the performance of the economy is Gross Domestic Product (GDP), which adds up the value of all goods and services produced in the State.
But Mr Howlin has argued that this system does not take into account important other factors such as the environment, social and welfare factors, and the economic and social well-being of the population.
In addition, he said that GDP has the potential to be distortive. He referred to the massive increase of 26 per cent in GDP last year, which was the result of the “Double Irish” loopholed being closed.
He also said that Irish-based aviation leasing companies, which operate globally, also influenced GDP especially when they purchased new batches of aircraft. These multi-billion euro transactions made little difference to the economy but were significant in terms of the GDP returns.
Grounded on his five years experience as Minister for Public Expenditure and Reform, Mr Howlin has now published a draft Bill to containing his proposal.
Entitled the Genuine Progress Indicators and National Distributional Accounts Bill 2017, it proposes that both the Central Statistics Office and the National Economic and Social Council play roles in the compilation of the accounts. They could take into consideration such factors as livelihood, infrastructure, human capital, health and wellness, knowledge capital, social capital as well the “ecological footprint”.
“It has seemed to me that GDP, even when it was less discredited than it is now, was not a true indicator of true progress.
“I am determined to have a different set of indices. What we measure with this Bill would not be simply production and consumption but all the (statistics on) environmental impact, health, health status, economic inequality.
“It is not to replace GDP but to supplement it and add value to the statistics.”
Asked about Minister for Finance Paschal Donohoe’s plans to merge USC and PRSI, Mr Howlin said it was not a new idea. However, he said that PRSI funds went into the social insurance fund while USC went into the central Exchequer.
“The first question to be raised is will they be treated as a single contribution to the social insurance fund, which would be a good thing,” he said.
Mr Howlin said that the party has decided to share its private members time in the Dáil next week to facilitate a Green Party private members motion for a waste mitigation plan. He said the initiative - which, among other things, would require consumers to pay deposits for plastic bottles and would ban non-compostable paper cups - was self-evidently sensible.
When it was put to him that Minister for Communications and Climate Action Denis Naughten had ruled out such a measure on the basis of administrative costs, Mr Howlin responded that that was a standard ministerial response, but did not hold up to scrutiny.
