| |
Patronage
Hannah Kiely, CEO, HC Financial Advisers
Patronage is the support, encouragement, privilege, or financial aid that an organization or individual bestows to another. While speaking recently at a Chamber Business after Hours event hosted by COPE Galway, one of the suggestions I made to the business attending is to align themselves to a charity of choice. The reason being manifold but includes the identity business can have with their chosen charity, the opportunity to make a meaningful input to a particular charity in a way that can have real benefits, and of course the greater good of society, to name but a few.Patronage is well known in the history of the arts, and historically it referred to the support that kings or popes provided to musicians, painters and sculptors. It also referred to the right of bestowing offices and the guardianship of saints. The word “patron” actually derives from the Latin word patronus or one who give benefits to clients. The term may refer to a type of corruption or favoritism in which a political party in power rewards groups, families, ethnicities for their electoral support using illegal gifts or fraudulently-awarded appointments or government contracts. For the purpose of this article, I will not focus on this but instead focus on the opportunities and instances of patronage for business in Ireland today.Charitable and other non-profit making organizations often seek an influential figurehead to act as patron. The relationship often does not involve money. As well as conferring credibility, these people can use their contacts and charisma to assist the organisation to raise funds or to affect government policy. A really good example in the UK is the British Royal Family who is especially prolific in this respect, devoting a large proportion of their time to a wide range of causes.The great opportunities for business to become patrons of charities can be where the patron is often reasonably well known and is willing to become a figurehead for a particular charity or cause. This is usually an ongoing relationship and the figurehead and the organisation build up a working relationship. The patron is not a trustee or should not become on, and they do not have responsibility for the management of the organisation or the legal responsibilities. But their purpose is to lend their credibility and high profile support to the organisation. This should be of help in the area of fundraising, campaigning and public relations. Some of the “demands” if you want to call it that could be time, time in helping in publicity, media, attending fundraising, sponsorship and generally contributing to the public image of the organisation. And also of great importance is attracting new supporters. So, align your business, get the airbrush working and choose your charity.
HC Financial Advisers …………inspirational advice.
Back to Index
An App a day, helps you work rest and play
!By Hannah Kiely, CEO HC Financial Advisers
I love my iPhone and the apps on it. I have apps that trace my cycling, apps that tell me I haven’t won the lottery, apps that track my flights, and apps that help my golf swing, apps giving share prices, apps everywhere and for everything.There are many Irish companies that have taken and are taking advantage of the immense opportunities to create and market mobile software. The advent of the Apple iPhone and the App Store has seen the Irish developer community responding to the challenges by producing their own bespoke products and services. Mobile development is now in the heart of our major educational establishments creating a substantial body of skilled and creative developers and designers ready to take on any project from new sources.
According to both designers and professional users, Mobile apps can be real assets to a business g to those that use them professionally and those who design them. But it is important to have a clear picture of what your expectations are. Knowing the true value of an app to a business can be difficult due to the fact that there is so much hype around them.
Because of the speed of movement in the marketplace in relation to apps, it can be difficult for companies to know where to start, from the point of both view of consumption and creation. If you are in the business of creating an app, there is a very good chance that someone else has already done this, so it is worth checking the app store thoroughly or you could be entering the arena of replicating and what that entails.
So if you have a good idea, and you want to have an app to support it, there are many considerations, such as the platform used, and an awareness of the increasing use of Android. It is believed however, that up to 80% of new designs of apps are for the iPhone market. Then there is the whole issue of pricing the app or should it be free and try to generate income by other means. There can often be no option as the Irish market is of course quite small.
Remember of course that the app market is very crowded and charging for apps may not be an option especially if you want to get your product or service promoted.
Then of course there are the apps we use every day. They have become such an important part of our business and how we conduct our business. Some of the top free apps in both the android and iPhone market have become such a part of our lives, that we cannot become parted from our phone or mobile device for long periods, Facebook, Google Maps, You Tube, Skype, Viber, Scan it.
And of course there is the Angry Birds, the app which has sold over 12 million copies, where the player launches birds at pigs with a view to destruction of same pigs!!! Did you know this was designed around the time of the Swine Flu epidemic?
My favourite new one is Words with Friends; I just need some new friends!
HC Financial Advisers, we advise…………………
Back to Index
Forgive me, for I know not what I spend
Hannah Kiely, CEO, HC Financial Advisers
We are hearing a lot these days about debt forgiveness and if it can be done and what is the impact of it. But what does “debt forgiveness” really mean? This term has become part of our everyday parlance and without really debating the impact of it and what it would mean in reality.
“Designing a Debt Relief Programme without Moral Hazard” published in August 2011 by Karl Deeter of The Irish Mortgage Brokers, provides a view about the justice of “debt forgiveness” and points out that the discussion should be aimed at the Department of Justice not the Department of Finance. He argues that this term needs to be defined clearly.
Debt forgiveness conjures up ideas that many of us deem to be inherently unfair. What about all those people who went on two or three holidays a year, had the best cars updated every year and had grass trimmed to a couple of centimetres? We all know how much everybody else spent and now we shouldn’t have to bail them out with our taxes! Yes we all agree on that don’t we?
But perhaps it IS in fact about the justice of the situation, and perhaps it IS inherently unfair on the remaining tax payers to be dropping the idea of debt forgiveness before them, because it conjures up reckless spending and decadent lifestyles.
So what should be done? In the UK and US systems there is mediation by third parties in the application of debt-forgiveness. Organisations like MABS here act in some way like a third party organisation negotiating the tricky road of finding agreements which all parties can enter into and exploring the options for restructure, repayment and write-off. The development or expansion of such a system which allows people to look at their own situation and restructure their debt in an honest and tested manner whilst keeping judgements at bay must be explored. The options of repossession by the lenders could remain but the time frame can be extended into the long term once commitments agreed by all parties overseen by an independent body such as MABS are met.
We would need to ensure that the system is able to differentiate between those seeking to avoid facing their debts and those genuinely in need. How would tax payers feel about bailing out their neighbours who perhaps “spent like there was no tomorrow”? This raises all sorts of issues around social justice and moral hazard.
Debt relief has been practiced from Antiquity. In the 19th century, it referred to agricultural debt and the freeing of slaves. In the late 20th century it referred primarily to Third World debt and now it relates largely to credit bubbles and housing bubbles. In fact, if you go back much earlier to the Book of Leviticus, God councils Moses to forgive debts in certain cases. In Ancient Athens in the 6th Century, the lawmaker Solon instituted a set of laws called seisachtheia which cancelled all debts and retroactively cancelled previous debts that had caused slavery and serfdom, freeing both the slaves and serfs.
So the more things change, the more they stay the same, or do they?
HC Financial Advisers, we advise………..
Back to Index
I do like to be beside the Seaside
Hannah Kiely, CEO, HC Financial Advisers Limited
“I do like to be beside the Seaside” is a popular British Music Hall song written in 1907 by John A Glover-Kind and made famous by music hall singer Mark Sheridan who first recorded it in 1909. It speaks of the singer love for the seaside and their wish to return there again and again. And after the wonderful spell of sunshine over the last week or so, the lyrics of that song come to mind as I sit in my office and admire the blue sky and think what if the working week were to change and the four day week become the norm and we could spend the three days off at the seaside?
Sometimes at this time of year where Easter can run into Bank holiday weekends a number of consecutive weeks can become the regular four day week with minimum use of additional holidays, so what would we do with a four day week and what would be the benefits of it? In a survey in the UK by Premier Inn, of 4000 workers it was found that on average most workers don’t unwind until 12.38 on Saturday night and by 3.55 on Sunday afternoon, many are beginning to think about work again and 53% are too tired to enjoy the weekend fully. Nearly half check work emails over the weekend. Many are welded to their Blackberries, iPhones all weekend becoming totally alert as each message arrives. Arguably requiring people to “work” 5 days a week is meaningless anyway.
Partly as a result of technology, we have stripped ourselves of our offices as we knew them, the hierarchy, the PA, the corner office and so on and have instead conflated activity so that how busy we are has become an indicator of our importance. Enabled with technology we can be global, with 6am conference calls from Tokyo, ending with a 10.pm call from the US, and emails from Dubai on Sunday which is part of their working week. It is as if owning one of these devices brings on compulsive behaviour. We can ‘sync’ our phones with our iPad, with our dashboard panels on our car.
So we may be very far from a four day week due to technology at present, it is work looking at some of the history of the shorter working week; around 898AD, King Alfred the Great proclaimed “Eight hours work, eight hours sleep, eight hours play, make a just and healthy day”. In 1496 Henry VII ordered a 14 hour working day for field labourers from March to September. In 1815, the Foundation of the Ten Hour Movement was established, which aimed to restrict hours for industrial workers. In 1847 Women and Children were granted a shorter working day on Saturday with a max of 60 hours a week. Around 1900 the concept of a two-day weekend began in the US as labour movement aimed particularly at Jewish workers. In 1926 Henry Ford shuts factories on both Saturdays and Sundays stating “The country is ready for a five-day week”. In 1953 Winston Churchill foresees the end of the Cold War and increased production and more leisure time and predicts “A four-day week, the three days’ fun”. In the UK in 1974 the Government introduced a three-day week to conserve electricity due to the miners’ strikes. With the onset of the credit crunch many companies’ restricted workers to a four-day week. And finally, the New Economic Foundation claims a 21 hour week would reduce power consumption and increase productivity. If there is a requirement for a 7 day job, then two people could share this and reduce the live register.
Some of the benefits of a four day week could include;, New energy pumped into your business; Such a perk could be seen as a major hook to attract the best; employee retention rates would soar as commuting a four day week and three days at home, how good is that; staff realising they have something unique; socialising can begin on a Thursday night.
So, where is the sun cream and towel?
HC Financial Advisers…………………we advise.
Back to Index
The Rich are Different
By Hannah Kiely, CEO HC Financial Advisers
The book The Rich are Different by Susan Howatch begins in the benign period of 1922 and ends in the turbulent 1940's covering both the stock market crash in America and how it affected not just England but America as well and the way it also affects the people in the story.
The recent Merrill Lynch and Capgimini World 2011 Wealth Report states that the global wealth of high net worth (HNW) individuals grew by 9.7% in 2010 to reach $42.7 trillion and that the percentage of HNW individuals grew by 8.3% to 10.9 million people. These are staggering numbers. So how is a HNW defined? According to the same report it is “those having investible assets of US$1 million or more, excluding primary residence, collectable, consumables and consumer durables”.
The report also showed that North America had the largest gain of wealth in 2010 with a gain of $3.6 trillion giving a total of $38.2 trillion. This figure in Europe was $37.1 trillion. This report and another one by the Boston Consulting Group show that alongside the 3.1 million HNW’s in America, there are 46.2 million people living in poverty in 2010, an increase from 43.6 million in 2009.
What about the situation in Ireland, regarding both poverty and wealth? Well, it is believed that over 14% of the population in Ireland was at risk of poverty in 2009 – this would be people with disposable incomes of €12,064 per annum, and that the poorest 10% of the population had disposable incomes of €10,952 or €211 per week. This is in contrast to the richest 10% had disposable incomes of over €881 per week.
The same study highlighted the inequality of wealth distribution in Ireland, where 1% of the Irish Population holds 20% of the assets, the top 2% holds 30% and the top 5% holds 40% of private assets. When you leave out housing, in effect it means that 1% controls 34% of all wealth.
Prior to the recession, 30,000 Irish were cash millionaires, 100,000 were millionaires if their houses were included. 330 people had net worth over €30m, and 6 Irish billionaires were recorded. This has obviously changed since the recession hit, and while there are no up to date numbers, it would be generally accepted that these numbers have fallen considerably.
There is of course the opposite side of the coin (pun). The percentage of people in consistent poverty in Ireland in 2009 was 5.5%, 17% of those living in lone parent households were in consistent poverty in 2009, and almost 25% of households were in arrears of some form of utility, rent or mortgage. Now we all know what has happened since then, and that these statistics have no doubt risen exponentially.
The current economic crisis has had a major impact on much of Ireland’s wealth but it would be a mistake to think that the income of Ireland’s wealthy has been eliminated.
In recent times, both the Unions and Sinn Fein have called for the introduction of some form of Wealth Tax in Ireland, in their pre-budget submissions. Some have also called for a levy on Wealth above €2 million. It is believed that this could generate up to €500 million on taxable wealth of €50 billion.
F. Scott Fitzgerald in "The Rich Boy" (1926) says "Let me tell you about the very rich. They are different from you and me. They possess and enjoy early, and it does something to them, makes them soft, where we are hard, cynical where we are trustful, in a way that, unless you were born rich, it is very difficult to understand." I saw a further version of this on a board recently which said “the rich are different from you and me; they get taken seriously even when they are whining”.
Perhaps it time for the poor to whine very loudly!
Back to Index
Madame Lagarde and testosterone!
By Hannah Kiely, CEO HC Financial Advisers Limited
It is widely expected that Madame Christine Lagarde will take the helm at the IMF following the resignation of the previous head DSK. When she launched her bid for the top IMF job two weeks ago, she stated that she would bring “experience as a lawyer, a minister, a manager and a woman” to the job.
But what does she mean about her experience as a woman in one of the most powerful financial jobs in the world? In an article publish on a blog last October titled, Women Approach Business Differently than Men – Insight from Christine Lagarde, the authors; Shipman and Kay refer to a number of studies about the way in which women impact the business environment. They state that a study by Michel Ferray, Professor of Management at the CREAM Business school in France, found that companies with more women in management positions did better during 2008, and had higher profits that those with fewer women. The study goes on to state that in conditions of high uncertainty, financial markets value those companies that take fewer risks and are more stable. A further study, the Davis Study from the University of California found that Companies with women in top leadership positions have “stronger relationships with customers and shareholders and a more diverse and profitable business”.
In an excerpt from an interview with Madame Lagarde by Christiane Amanpour in October, French Finance Minister Christine Lagarde was asked ““You were a former CEO, do you think women have a different way of approaching business or approaching the public sphere?” “Yes,” said Lagarde, who is the only female finance minister in the Group of Seven, industrialized countries. “I think we inject less libido, less testosterone …” “Less libido?” Amanpour asked. “Yes. And less testosterone into the equation,” Lagarde replied. “It helps in the sense that we don’t necessarily project our own egos into cutting a deal, making our point across, convincing people, and I’m sure that there are women that operate exactly like men,” she said.
We have seen this week a proposal for a quota in the Political Systems and this has met with varying degrees of support and opposition. But quotas do exist in many political systems in Europe. Also in the past week or so, a survey which was conducted by Behaviour & Attitudes on behalf of the Institute of Directors in Ireland (IoD) among its members, has found that two-thirds (66%) of directors surveyed are not in favour of the introduction of a formal quota system to increase the number of women on boards in Ireland. However, 6 in 10 (60%) female directors are in favour of a formal gender quota system, with 1 in 3 (36%) of them favouring it as a temporary requirement and 1 in 4 (24%) women favouring it as a permanent requirement. Almost 3 in 4 (72%) men are against the introduction of formal gender quotas.
Personally I am not convinced that quotas are the right way to go, however, there is an urgent need to kick start a greater balance in the corporate world and in Politics and maybe that there is a need in the shorter term . The world really is different when there is genuine diversity in the decision-making process. And when women are in on those decisions, the impact is obvious. My vote is for Madame Lagarde……
HC Financial Advisers……..we advise
Back to Index
Reports of our demise are greatly exaggerated!
By Hannah Kiely, CEO, HC Financial Advisers
In 1879 a certain Mr James Ross Clemens took ill, but thankfully recovered. Unfortunately communication wasn’t as ubiquitous as it is now and a US newspaper feared that a Mr Samuel Langhorne Clemens was the ill individual and indeed that he had passed away. This man, a relation of the ill man was better known to us as Mark Twain and he is said to have commented that “this report of my illness grew from his illness – the report of my death was an exaggeration”.
He could have been talking about our current economic situation however. Since January of this year in new figures released by vision-net.ie, 8,890 new companies have been incorporated in the Companies Registration Office in Dublin. A further 16,935 “business names” have been registered.Ireland’s economy is recovering very slowly from its own near death experience – but in many cases the illness has been exaggerated through invalid comparisons with our “relations-in-bailout” – Greece and Portugal. We have problems but we are steadily improving our position and we will exit this recession. Ireland is one of the world’s largest recipients of Foreign Direct Investment - 8 of the top 10 Information and Communications Technology, 15 of the top 25 Medical Device companies, 8 of the top 10 Pharmaceutical companies and 50% of the top Financial Services companies all have offices in Ireland. Despite the economic collapse we still have a highly educated workforce, low tax rates and an improving competitive environment for business. Whilst many companies have unfortunately been forced out of business, there have been significant levels of company formation. According to vision-net.ie, a breakdown of these new companies showed that Business and Management Consultancy in the lead. However in the top ten sectors, Medical Practices, IT Services, Restaurants and the Construction Industry all feature.Minister for Jobs, Enterprise and Innovation Richard Bruton TD recently announced that 445 jobs will be created in 24 new Irish 'high potential start-up companies' which have been supported by Enterprise Ireland in the second quarter of 2011. The jobs will be created over the next 3 years. Bruton said the announcement follows on the 310 new jobs announced earlier this year as part of the Q1 results of Enterprise Ireland’s High Potential Start Ups programme, and compares to 284 jobs in 20 companies during Q2 last year.In the recently published GEM (Global Entrepreneurship Monitor) Report for Ireland, EI confirms that Ireland is highly entrepreneurial and continues to be one of the highest in Europe. The rate of established entrepreneurs among the adult population (8.6%) is also high, on a par with Australia (8.5%) and slightly ahead of the US (7.7%). The report also indicates that the majority of the entrepreneurs expect to have customers in export markets (64%). This is well above the EU (45.5%) and OECD (43%) averages. Moreover, the report finds that Irish entrepreneurs are the most innovative of advanced economies, offering inventive and novel products and services to global consumers.
Companies such as Hewlett Packard, General Electric, MTV, CNN, Microsoft, and Burger King were all formed during a recession – reasons to be confident that whilst we are emerging from a terrible time, we’re not dead yet !
HC Financial Advisers…………………..we advise.
Back to Index
To Tax or not to Tax, that is the question?
By Hannah Kiely, CEO, HC Financial Advisers
To be, or not to be: that is the question: Whether 'tis nobler in the mind to suffer the slings and arrows of outrageous fortune, Or to take arms against a sea of troubles,
..Is the opening line of a soliloquy from William Shakespeare’s play Hamlet (written about 1600), act three, scene one. It is the best-known quotation from this particular play and one of the most famous. To tax or not to tax, to cut spending or not to cut spending, is our current dilemma regarding whether to raise taxes or cut spending both in Ireland and across the water in the US. Following on from a deal reached in the US regarding the budget deficit and their decision to cut spending and not raise taxes, our own Government is facing the same dilemma here after the summer recess.
Enda Kenny’s early days in government have been very successful and he is riding high in the opinion polls and is extraordinarily popular. But he will have to address the issue of whether to increase taxes or continue to cut spending. Already those of us that pay taxes are carrying a huge burden and any further increase in tax I believe would certainly cause further pain and resentment.
If you ask the question, how many people pay tax? The simple answer is not enough!
With €3.6bn required in savings again this year in the next budget and the government having got a star for its performance to date from the IMF/EU, the talk is now of a “primary balance” for government finances. What this means is the balance between spending and revenue, before counting in national debt interest payments. At the end of this year, this primary balance is expected to be €15 billion in the red - in other words, we are spending €15 billion more than we take in through taxes to run the country. Or put simply, for every €5, we are spending on running the country; we are only getting around €3.50 in taxes and other revenues. This huge hole in our finances has to be addressed
So despite our good performance to date, it is highly unlikely that the EU/IMF will agree to any let-up in the cuts and tax rises. It is more probable that they will insist on stabilizing our position and we should expect to hear a lot more about the primary balance being achieved between tax and increased revenue on the one hand and reduced spending on the other. Ministers may only decide on their approach when they get back from holidays and see the final outcome of a spending review now under way.
The collection of taxes on behalf of governments dates as far back as earliest recorded history. The Egyptians even had a tax on cooking oil. The Athenians of Greece had a tax to fund their military campaign and the Roman emperor Caesar Augustus was considered a brilliant tax strategist in that he imposed taxes on Imports, exports and inheritances over 2000 years ago. Over the course of history, governments have expanded and modified our system of taxation and will no doubt continue to do so. Benjamin Franklin once declared that “the only certainties in life are death and taxes”. Perhaps there is now an opportunity to have another certainty, that of prudent spending and “primary balance”. My own view is that there is a need to bring more people into the tax net and not continue the pressure on those of us that pay very hefty tax whilst at the same time continue to cut the incredible wastage that the present government inherited and meanwhile maintain essential services.
What a task!
HC Financial Advisers, we advise………………
Back to Index
Two Wheels, good
By Hannah Kiely, CEO, HC Financial Advisers Limited
Albert Einstein once said “Life is like riding a bicycle – in order to keep your balance, you must keep moving”. And moving is what is happening in Ireland and elsewhere, that is movement on the bicycle. What with the Tour DE France in full swing, and Enda Kenny partaking in the Killarney cycle at the weekend, everybody seems to be at it these days, and why not?
In one of the great initiatives introduced in recent times, the Bike to Work Scheme has been a huge success. By taking advantage of the tax breaks available to those who cycle to work and their employers, many new recruits have taken to the bike. This scheme covers a bike and accessories to a maximum of €1,000. Your employer buys it and you pay for it, tax free over 12 months with the effect of a 40% reduction for you. Let’s hope its lasts.
There are very few reports on the value of cycling to the Irish Economy, but one such report produced in Australia, called “The Real Value of Cycling; Evidence-Based Report” published in June 2010, shows that an Inner City network of bike paths would deliver economic benefits more than triple the cost of building it, according to the report commissioned by the City of Sydney. The expected benefits would be quicker trips, health benefits, and decongestion benefits. Whilst it is hard to quantify any benefits to biking, the improved quality of travelling experience is much more obvious.
We have had a very successful Bike Week here recently and this would be an opportune time to continue to promote the benefits of this wonderful means of transport. This week was the initiative of the smarter travel – A Sustainable Transport Future – a New Transport Policy for Ireland 2009 – 2020. Within this framework, the government is committed to continuing to invest in the National Cycle Policy as Ireland moves towards a sustainable transport future.
In May this year, Journalist from the Netherlands and Belgium spent time in May exploring the Great Western Greenway cycling and walking trail which runs between Newport and Mulranny. This is a wonderful facility and will help promote cycling in Ireland. According to Failte Ireland, approximately 114,000 overseas visitors engaged in cycling in Ireland in 2009 and accounted for €97 million of overseas visitor spend. Failte Ireland report that cycling represents a growing and valuable market segment in particular for rural Ireland. According to their strategy, a recommendation for a network of routes around the country should be put in place. Many overseas visitors who cycle do not see this as a safe activity and there is not an easy facilitation by transport companies to carry bicycles.
So there is a need for the implementation of both the Transport Policy and the Tourism Strategy to bring about a real infrastructure to support this valuable activity here in Ireland. For those of us who cycle on a regular basis we know the state of the roads, potholes, traffic, poor margins, each time it is risky. Any while we might wax lyrically about the joys of cycling, there is also the risk of theft, but in the words of Flann O’Brien, “Why should anyone steal a watch when he could steal a bicycle?
HC Financial Advisers, we advise………….
Back to Index
When Elizabeth comes to tea! (18th May 2011)
By Hannah Kiely, CEO, HC Financial Advisers
This week marks a major event in Irish history, with the visit of HRH Queen Elizabeth the second. While there will no doubt be lots of disruption and a great deal of divided opinion about the visit, it is worth just casting any prejudices aside and look at the value to the Irish economy and our connections with our nearest neighbors. We have been exporting goods and talent to the UK many years, and many of these people never return. But a great number do return with new skills and experiences. It is important to remember that we benefit greatly from our close relationship with the UK in a number of ways. The Queen is said to love facts and figures, and she will no doubt be aware that our bilateral trade is vital to both the Irish and UK economies. The value of UK exports to Ireland is greater than the value of exports to the BRIC (Brazil, Russia, India and China) countries combined and a figure of £24 billion is put on this. It is equally important to note that the UK is Ireland’s biggest trading partner. Another interesting point regarding Northern Ireland is that total sales to the Republic of Ireland (ROI) in 2009/10 were £1.5 billion, down £99 million (6.3%) over the year (2008/09 – 2009/10). This compares to growth of 2.3% in the previous year. There are 6m people with Irish links in the UK. The current numbers of UK visitors to Ireland is down to 1998 levels, but there are hopes this will increase by 4% this year.The visit will also demonstrate the close relationship that exists between us and how much has changed in the last decade due mainly to the successful peace process in Northern Ireland. While many people from both sides of the divide have suffered greatly, the new maturity that exists in the political arena will ensure that their memories will not be forgotten. There are so things to celebrate about this visit such as our long standing ties in the economic area, the cultural area, and more recently our political developments which are now closer than ever before.Many of us worked in the UK and retuned with new experiences and the Irish Diaspora abroad continue to contribute to the Irish economy in many ways and this visit can be seen as creating greater links with this Diaspora. Of course the cost of this visit is of great concern, given our economic woes at present, but perhaps new opportunities for tourism, the arts, etc. will come about as a result of this visit. It is particularly hoped that the visit will boost greatly Ireland as a destination for UK visitors and thus the economy as a whole. Tourism Ireland is hoping that this will be seen as a promotional exercise targeted at the sort of British person Ireland hopes to attract, those in search of culture, and sightseers. It is believed that more than 500 journalists will accompany the Queen, and they will each receive a pack of information about the wide appeal of Ireland as a holiday destination. The message will be very clear ‘‘Ireland’s open for business, it is a fun and engaging place to go, it’s good value, and there’s never been a better time to come here," according to Tourism Ireland. In Britain, royal watchers who follow the queen’s progress on ITV and Channel 4 will also see Tourism Ireland’s TV ads, which have been timed to air with news coverage. So let’s take out the china, oil the horse’s hoofs, stiffen the upper lip and let the tills roll!
Back to Index
NEDs
By Hannah Kiely, CEO, HC Financial Advisers
NED or Non-Executive Director is a non-working director of a firm who is not an executive director and, therefore, does not participate in the day-to-day management of the company. He or she is usually involved in planning and policy making, and is sometimes included to lend prestige to the firm due to his or her standing in the community. Non-executive directors are expected to monitor and challenge the performance of the executive directors and the management, and to take a determined stand in the interests of the firm and its stakeholders. They are generally held equally liable as the executive directors under certain statutory requirements.
In today’s business environment the need for the objectivity provided by an NED is paramount. The role of the NED covers four main areas, Strategy, Performance, Risk and People. These essential people to an organisation should under their remit of Strategy contribute to the strategic development of the company and also challenge this strategy in a constructive manner. It is under their role of Performance that they can really bring benefit to a company by scrutinising the performance of management in their role of meeting goals and objectives and also to monitor the reporting of performance, not just take it as a given. The responsibility of Risk in an organisation rests with all directors, and the NED’s should ensure that the information they are given of a financial nature is accurate and that the controls in place both of a financial nature and of the systems of risk are both robust and can be defended. Finally their role in the appointment of and remuneration of executive directors and the appropriate level applying is of critical importance. NED’s should have a prime role in the appointment of and where necessary, the removal of senior management and in succession planning.
So, what should one look for when appointing an effective NED? This is both a complex role itself and a demanding one. It is necessary to have the right skills for the role, to have experience, integrity and certain behaviours and attributes. I would also add, proper training, such as that provided by the Institute of Directors in Ireland. These attributes can include sound judgement and an inquiring mind with the ability to ask intelligent questions, to debate constructively, challenge rigorously and decide dispassionately. And they should have the ability to listen.
They should also be well informed about the business they are in, the environment in which it operates and the issues facing the business. It is really important to ensure that the gap between executive and non-executive directors in terms of knowledge about the business is quite narrow.
Finally, and of equal importance is that NED’s should have the ability to recognise when it is time to go, and to be aware of when what they contribute is no longer fresh, and they should then ensure that there is managed way to bring new people onto the board.
So do these people exist? Yes, they do. There are amazing people sitting on boards in this country providing all the above and who are not in the media spotlight. I do however; believe that in light of the decision by the new Government, to be more transparent in the appointment to state boards, that qualifications in Corporate Governance should be included in this list of attributes. If the new government takes the approach of appointment on merit not friendship, then, and only then will the future of state boards alongside other boards, be very bright.
Unmasking the ghouls! (Oct 10)
By Hannah Kiely, CEO, HC Financial Services
A mask is an article usually worn on the face. It can be worn for a number of reasons, including protection, concealment, performance or amusement. There were masks aplenty in the week just gone by, but all the ghouls should now be unmasked. But, how about unmasking some of the disguises the government is wearing for their own reasons, be it protection, concealment, performance or amusement!The etymology of mask comes from the French ‘masque’ or the Italian ‘maschera’ or the Spanish ‘mascara’. Throughout the world, they are used for their expressive power, both ritually and traditionally. There are many masks used for medical, protection, occupational, sports, disguise, punitive, fashion and horror, to name but a few.In the past week or so, we have finally seen the unmasking of the true depth of our budgetary crisis, which went from €7.5 billion to the whopping €15 billion now required. The mask that was hiding these figures remained very stubborn and difficult to remove. Of even greater difficulty was the unmasking of the banking debacle. For example, one of the two main banks stated in November 2009 that there was nothing to indicate that their loans would transfer at a discount significantly outside the indicated 30 per cent discount. Tranche one transferred at a 42 per cent discount and tranche two at a 48 per cent discount.The unmasking of the regime that operated in FAS and other elements of the public sector is not yet complete, and last week the Tánaiste suggested a new and rebranded training agency with a fresh new mandate. She said the eyes of many will be on Ireland over the next few weeks, as Ireland sets a new course to rectify the national finances. Someone pass me a mask! We have had so many cases of unmasking in Ireland in recent times, included the reality of unmasking the lack of child protection, the unmasking of double charging of legal fees under the redress tribunal, the unmasking of Garda corruption in the Donegal case, the previous unmasking of the DIRT tribunal, the unmasking of the planning tribunal, the other tribunals… It goes on and on.The unmasking of the poor performance and management of the Government in its handling of the economy and the need for greater performance improvement, the unmasking of the impact of the planning on overdevelopment has led to so many so-called ‘ghost’ estates. In 2005, there was enough zoned land to accommodate 460,000 new homes.It is time to remove all the masks and deal with that fact that there is a chronic lack of cash in the enterprise sector. Lending has gone from a 30 per cent annual increase to a three per cent decrease. State spending at central and local levels have contracted.
Back to Index
Free Education, yeah right!
By Hannah Kiely, CEO, HC Financial Services
We live in a country where our education is free. That is until one adds up the cost of educating a child over a 20-year period. Education is compulsory in Ireland for all children between the ages of 6 and 16 years and children up to 18 years must complete three years of post-primary education. During the course of those years, there is the cost of school books, transport, uniforms, supplies, lunches, trips to name but a few of the associated costs of our free education system. In the UK, state-run schools and colleges are financed through national taxation and take pupils free of charge between the ages of 3 and 18. Additional charges may be levied for field trips etc. In the USA, education is mainly provided by the public sector with control and funding coming from three levels: federal, state and local. However, it is very well known that the cost of third level education in the US can be exorbitant. In many European countries, annual fees of approx €200 per year are paid up front on the basis of return of books etc. But what is the real cost of our free education in Ireland?Finding out the cost of books, uniforms and education in general is difficult for Ireland and much of the evidence is anecdotal to say the least. However, according the a report produced by Bank of Ireland Life in August this year, parents are feeling the financial pressures of the education system. The company estimates that the current costs associated with educating a child to third level is €70,000. This being after tax income! Another highlight from the research is that parents spend on average €696 in August alone. Bank of Ireland Life believes there are numerous ways of reducing costs and some suggestions cited include: 90 per cent advocate the use of a school crest or badges on a standard make of uniforms; 42 per cent of parents will use recycling facilities for books, bags and uniforms; 97 per cent believe that the curriculum should only be changed every five years at a minimum; 64 per cent believe uniforms should be worn on communion and confirmation days; 97 per cent believe that transition year should be optional.The same report produced a summary of typical costs of educating a child through primary, secondary and third level education – giving a broad summary as primary being €13,528, secondary being €14,112 and third level €41,851. (Source - Bank of Ireland Life August 2010)
Back to Index
Expenses and the long road!
By Hannah Kiely, CEO HC Financial Services
In a week that saw the whip being removed from no less than two TD’s over interpretation of expenses, I thought I would give a little insight into Expenses and their idiosyncrasies.
The definition of expenses for the purpose of this article are from the Revenue and are generally regarded as expenses that are incurred in the performance of the duties of the employment and are directly related to the ‘nature of the employee’s employment.
Some interesting examples include Airline Crew with a flat rate of €64 per annum, or Cardiac Technicians for which Females receive €212 pa and males €107 – interesting. Also if you work as Cosmetologist and you are obliged to supply and launder your own white uniforms you can claim a flat rate of €160pa. If you work as part of one of the RTE Orchestra’s, you have a flat rate of €2,476 to give another example. (Source; www.revenue.ie)
If you go back a bit in history, the salaries of ministers were fixed at £1,500 per year in the late 1920’s or the equivalent of €100,000 per year today. After the civil war, all ministers travelled by public transport to and from their office. It was not until after the murder of Minister for Justice, Kevin O’Higgins in 1927, as he made his way to mass in Dublin that Ministerial cars as we know them, were introduced. Today ministers “must have” a Mercedes Benz together with a garda driver on call at all times.
Expenses such as these have only begun to be scrutinised and there still exists the most amazing of all expenses “un vouched tax-free expenses ranging from €12,000 per annum for Dublin based TD’s and €37,850 for those living 360km from Leinster House – its really great if your holiday home falls within this distance also! Furthermore there is a un vouched tax-free amount of €15,000 per annum for public representative allowance for constituency expenses, although quite often this goes towards a salary for office administration.
There has been a number of expenses scandals here and in the UK in recent years, here one of the most shocking was the lavish style enjoyed by a minister forced to resign last year, of which Louis the XIV would be envious, which included horse racing, Michelin starred restaurants, first class flights, Melbourne Cup, Aintree, limousines and gifts to name but a few. And, ultimately with much public media focus, came an apology.
We should be grateful for the Freedom of Information Act and the transparency it brings to issues such as expenses. But more than that, surely it is time to radically overhaul the system that allows this to occur and the time spent in trying to get those who are supposed to be the leading lights in our country to toe the line!
Back to Index
Minding the Piglets in their hour of need!
By Hannah Kiely, CEO, HC Financial Services
It struck me recently that the AA Milne story, Winnie the Pooh (Milne, 1926) contains many of the characters, and indeed some of the lessons that we have learned in Ireland over recent years.
For the uninitiated, Pooh bear lives with his friends Tigger the Tiger, Piglet, Eyeore the donkey, 2 kangaroos called Kanga & Roo and a wise owl called Owl. Pooh Bear is a rotund little creature who lives in a world dominated by honey – once he has his honey all else will be ok. Arguably the entire country lived in a similar world of “Pooh” (in more ways than one) convincing ourselves that once we had our honey – our increasing property prices, our lower taxes, our higher salaries – we wouldn’t have to worry about anything else. Social justice, equality, fairness, fiscal control, and balancing the budget were all immaterial once we had our honey. Of course our honey is gone now and we are left with the realisation that our Celtic Tigger was all bounce and no substance – “bouncing is what Tigger does best”.
Owl represents the wise character to which the more apparently foolish ones go when they need advice. We have had many wise Owls – in most cases they have been full of advice and judgement after the event – like the Owl in Milne’s’ stories, on close inspection the advice and knowledge of the Owl doesn’t actually stand up to scrutiny.
And that brings us nicely to piglet – PIGS and PIIGS have been in the news lately as they and their excessive deficits have driven the markets into bear mode and forced the ECB to provide a 750bn honey pot to keep the show on the road. Piglet is smaller than the other characters and often exemplifies the Taoist concept “the virtue of the small”. This concept will soon be followed by the British and Irish banks who are likely to find that the public don’t really like the idea of banks being “too big to fail” any more and maybe a bit of downsizing is required. The introduction of a Lib Dem Cabinet minister Vince Cable has already sent a slight shiver down the spines of the big bankers.
In Milne’s world piglet was sometimes ignored and often caused concern and worry but at the end of the day the little piglet was a good friend of the bigger guys and they made sure he was kept safe – not unlike the Germans and the French “minding” the little piglets in their hour of need at the moment.
Eyeore the donkey epitomises the negative – living in Eyeore Gloomy Place in a house made of sticks he spends his time focussing interminably on the negative. Nothing ever goes right for Eyeore and there is no point looking ahead because all that is going to happen will be bad.
Luckily pooh bear, Tigger and the other characters ignore Eyeore and his constant moaning and groaning – they get through the bad times, push forward with hope and adventure. Let’s just hope that Tigger is going to come back – in a less bouncy manner this time. And maybe this time Christopher Robin, one of Pooh Bears friends, can make sure that we don’t just eat all the honey – that we put a bit aside for the next time that our Tigger runs out of bounce.
Back to Index
Reasons to be Cheerful
By Hannah Kiely, CEO, HC Financial Services ( September 2009)
There are many reasons to be cheerful at present and this week I dedicate this column to a very special man M.D., who always has the capacity to be cheerful. After I talk to him I think that there are many reasons to be happy and optimistic, this can be supported by some of the recent headlines and articles in the papers;- Prospects for economy improve amid
signs of growth in Europe
- UK recession at an end
- Euro Factory orders jumped in June
- Lower Prices lure Shoppers
- Retail Sales increase for first time in
four months
- 35 New high skilled jobs for Galway
- Canadian Bank make surprise
approach for stake in AIB
- BoI seeing signs of improving liquidity
- North’s recession easing
- Ireland Inc. still near the top of the
league – better than 174 other
countries
- Stocks lifted by Fed’s reassuring
comments
- Better than expected purchasing
managers indices
- Interest rates not expected to increase
in the medium term.Of course the expression “Reasons to be Cheerful” came after the publication of a book of that name by Barney Bubbles aka Colin Fulcher, the influential British visual artist (1942-1983) and included early posters for the Rolling Stones, Sir Terence Conran and Ian Drury. Bubbles’ is linked with the colourful optimism of the 1960’s. Perhaps it is time for some of this optimism to reappear and start to anticipate the best possible outcome from the situation we are now in.
Traders in the London markets continue to bet that the prospects for a sustained global economic rebound are improving, and the Asian markets rallied again this week, following strong corporate results and higher than expected US home sales in July. This type of news continues to boost investor confidence in a global recovery.There is a general relief that the global economy is on course to escape recession, this is following a return to growth by Germany, France and Japan in the second quarter and this has replaced the anxiety that existed for some time over the sustainability of any recovery.On Friday last, the US Federal Reserve Chairman, Ben Bernanke, raised hopes that the global recession was over. He said that economic activity appeared to be “levelling out both in the US and abroad”. He did however stop short of saying that the crisis is over. But there is certainly some of the overused expression “green shoots” and no doubt many reasons to be cheerful!
Back to Index
The Winner Takes it all
By Hannah Kiely, CEO, HC Financial Services (Wednesday 3rd September 2009)
I don’t want to talk about all the things we’ve gone through, though it’s hurting me, now its history. I’ve played all my cards, that what you’ve done to me, nothing more to say, no more ace to play. The winner takes it all; the loser’s standing small, beside the victory, that’s her destiny.The opening words of one of ABBA’s greatest hits, I feel is rather appropriate for the week we have had in Galway with the races and the various reports issued by the government, including NAMA legislation. Whilst attending the races during the week, it did cross my mind to think who are the winners with NAMA? Given the absence of various tents at the races this week, will it be the developers, the banks or it is simply a temporary face saving exercise?In a week which saw Permanent TSB introduce a mortgage rate hike by 0.5% which saw unions and the opposition up in arms over it claiming the Minister for Finance had washed his hand of the decision. Mr Lenihan said that Permanent TSB was paying the State for the benefits of the guarantee and that it “reflects commercial market realities”. The increase will however pile further pressure on householders, many who are now in negative equity. AIB and Bank of Ireland announced last week that they would not be following on. This is good news of course!But most importantly of all, will the Banks lend again, and soon? One of the aims of establishing NAMA is to provide the banks with a clean bill of health to strengthen their balance sheets and to reduce the uncertainty over bad debts and as a consequence to ensure the flow of credit on a commercial basis to individuals and businesses in the real economy. On the 10th July ISME published a report prepared by Mazars for Government which confirmed a major discrepancy between what the banks state their credit refusal is and the actual refusals experience by SME’s showing a difference of over 71%. The report confirms that the bank have adopted a “more cautious” approach to lending and a reduction in approvals. The report continued that “lending to small business remains a major problem and that many companies continue to suffer due to lack of credit”.In the meanwhile SME’s have to continue to implement pay cuts and staff reductions in a fight for survival. Since the start of this year 45% of SME’s have introduced on average 13% in pay cuts. So, who will the winners be who takes it all and leave the loser’s standing small? Going back to the ABBA song, perhaps ‘the judges will decide, the likes of me abide......... the game is on again!
Back to Index
The Road to Oxygen and its source!
By Hannah Kiely, CEO, HC Financial Services (July 2009)
Having dropped my son at the bus at 7.30am to make the trip to Oxegen loaded with gear, food etc for the 2009 Oxegen weekend, I am reminded of how important oxygen is in our lives, and the need to come up for air in these crazy times!Oxygen is from the Greek roots ‘vital air’– acid/sharp and literally is the element with the atomic number 8 and represented by the symbol O. It is a member of the chalcogen group on the periodic table and a highly reactive non-metallic period 2 element that readily forms compounds with almost all other elements.The name oxygen was coined in 1777 by Antoine Lavoisier a French nobleman prominent in the histories of chemistry and biology. He was also an investor and administrator of the “Ferme Générale” a private Tax Farming Company, where he attempted to introduce reforms in the French monetary and taxation system to help the peasants. The term Ferme Générale was essentially a franchised customs and excise operation which collected duties on behalf of the king under 6 year contracts. The major tax collectors in that tax farming systems were known as fermiers généraux or farmers-general in English. The organization itself consisted of 40 partners and had its headquarters in Paris, employing up to 700 people with 42,000 agents. Tax farming was originally a Roman practice whereby the burden of tax collection was reassigned by the Roman State to private individuals or groups. They paid the taxes for a certain area for a certain period of time and then attempted to cover their outlay by collecting money or saleable goods from the people within that area. They were known as publicani of whom St Matthew is the best known. The system was widely abused and it is believe that these practices would have contributed to the fall of the Roman Empire. Tax Farming is not outdated as yet and in countries such as India and Bangladesh, such collection still takes place.But back to oxygen and Lavoisier, who was also Chairman of the board of the Discount Bank (later Bank de France). While working in government, he helped to develop the metric system to secure uniformity of weights and measures throughout France. He was later beheaded at the height of the French Revolution. And back to the other Oxegen, 320 years after the French Revolution, people are still loosing their heads, if not literally, spending a weekend of monsoon rain, muck diving and deluges and a great music line up – it was truly a marvel of organisation of partners, people, agents and participants! What would Lavoisier have made of this? Where is the washing machine!
Back to Index
Edwin Coppock and his curve!
By Hannah Kiely, CEO, HC Financial Services (June 2009)
Edwin Coppock was an economist and was asked by the American Episcopal Church to identify buying opportunities for long-term investors. He believed that market downturns were somewhat like bereavements that required a period of mourning. He asked the church bishops how long that normally took for people and their answer was 11 to 14 months and so he used those periods for his calculations. Coppock developed a series of calculations – based on 11 and 14 month rates of price change – designed to signal when stock market mourning could be over. The indicator’s signal does not emerge at the bottom, but comes as a rally is established. Supporter’s of the indicator claim that is has signalled rallies to the benefit of investors.The indicator is designed for use on a monthly time scale. It is the sum of a 14 month rate of change (roc) and 11 month rate of change (roc) smothered by a 10 period weighted moving average (wma)Coppock = WMA (10) of (ROC(14) + ROC (11))
Coppock designed the indicator for the S& P 500 index and it has also been applied to the Dow Jones. Although it is designed for monthly use, it can be used daily also. If you log onto YouTube for 4th October 2008 – the Coppock Indicator from 1950 to 2008 has correctly picked 12 long term turning points but also made two mistakes in that time!How do you use the Coppock Curve or Indicator? We are creatures of habit! We always judge the world and events relatively to what it is that we have experienced. For example if we are say shopping for a mortgage and rates say were in the teens as they were in the 1980’s, and say they drop to 10%, we are elated are we not! However if the have been at say 8% and rise to 10% we are disappointed, yes! It all depends on your perspective. The principle of adaptation-level applies to how we judge our income levels, stock prices, and virtually every other variable in our lives. Psychologically, relativity prevails!!So what can we learn from Edwin Coppock? It is generally agreed that the Curve peaked in October 2007, coincidentally with the top of the S&P 500 Index. Given that the S&P Index held around 900 approximately to the end of May and if it is able to hold at current levels and no further deterioration for a 60 day period, then a convergence of indicators would indicate positive signals that it will be “all right to get back into the pond”. One however needs to be clear about the indicators. The most traditional interpretation is to recognise a buy signal when the Coppock Curve “curls” up while it is still below the zero line. In its history, only 4 false signals have occurred. That’s an 83% accuracy rate. Proceed with caution!
Back to Index
The Tragedy of Cassandra
By Hannah Kiely, CEO, HC Financial Services (Wednesday 20th May 2009)
Cassandra ('she who entangles men') was the daughter of Priam and Hecuba of Troy. She was an incredible beauty. In fact, her beauty caused Apollo to grant her the gift of prophecy. However, she did not return his love, so he placed a curse on her, so that no one would ever believe her predictions. This in modern day parlance has become known as The Cassandra Effect, which is when a person believes he or she knows the future happening of a catastrophic event, having already seen it in some way, or experienced it first hand, and knowing little can be done or that no one will believe you even when you try to tell others. For example, in finance, the more you warn your colleagues about the tail risks - the rare but devastating events that can bring a bank down - the more they roll their eyes, give a yawn and change the subject. The Cassandra Syndrome is considered a fictional condition, used to describe someone who believes that he or she can see the future but cannot do anything about it. It is also used to describe people who get either good advice on a matter or a warning but fail to heed or acknowledge it because of its source or prejudices. The Economist magazine wrote in January 2009 about the American economist Irving Fisher who just before the 1929 crash remarked that share prices had reached what seemed a permanently high plateau. In August 2007 the then head of Citigroup, Chuck Prince, said, "You've got to get up and dance, and we are still dancing," just weeks before the credit markets seized up. Recent Cassandras, whose true words are ignored, have come to haunt us in the reality of the truth of the economy, the markets, and the property boom and so on. Financier, Peter Peterson, considered a modern day Cassandra, has been warning for decades about an impending fiscal calamity from unchecked entitlement spending. Even here in Ireland, we have had our own George Lee. The modern day Irish Cassandra did warn us but we did not listen! Today we look at oil bubbles, nanotechnology and green energy, predictive markets, spread betting and so on. Where is Cassandra when we need her?
Back to Index
Is the worst over?"
By Hannah Kiely, CEO, HC Financial Services (Wednesday 22nd April 2009)
Do I detect a note of optimism in the air, or is the fact that for the past number of days the sun has been shining and the world is looking like a slightly better place?“Optimism is an inclination to put the most favourable construction upon actions and events or to anticipate the best possible outcome”. Optimists generally believe that most situations work out in the end for the best. Some optimists believe that regardless of whatever is happening in the world around us, that one should choose to and make the best of any situation. We often hear of the glass being half full or half empty with optimist taking the view that it is always half full!Well, I consider myself to be an optimist and see the glass as always half full, and over the past few days and even weeks there is an increasing viewpoint that perhaps, just perhaps, the worst may be over!Let us look at some of the indicators that make the world seem a more benevolent place;Barack Omaba’s almost completed his first 100 days in office and his initiatives on new presidential orders, policies on the economy, alternative energy and foreign affairs and a new use of the media, all demonstrate a refreshing break from the previous approach.According to the UK’s confederation of British Industry, the worst (not it all) of the recession is regarded as being over
Garrett Fitzgerald over the last week said that when the global recovery comes, Ireland will improve at a faster rate than most other export led economiesESB announced 3700 new jobs in energy efficienciesRetailers see a stabilization on footfall numbersPension funds are likely to be used to fund government led infrastructural projects here in Ireland to the tune of 1bnA glimmer of summer is appearingSusan Boyle sings up a storm in Britain’s Got Talent and makes us all feel really good about the fact that there are still some wonderful surprises left. The Stock Markets in the US are having their best run since the 1930’s Waterford beat Cork in hurling at the weekend.
These are some of the reasons to be cheerful, and to have a hope that there are positive outcomes to the circumstances currently taking place. I will leave you with a quote from Charlotte Bronte; “I try to avoid looking forward or backwards, and try to keep looking upward”.
Back to Index
Should the European Central Bank regulate more in Ireland
By Hannah Kiely, CEO, HC Financial Services (Wednesday 25th February 2009)
On Monday of this week, Jean-Claude Trichet told a conference in Paris that regulation of our financial institutions and markets should be extended, and that this approach needs to be more holistic in its approach and that the current crisis was a “loud and clear call” to extend regulation to all important markets that pose risk to financial stability.These comments follow on from details that are emerging about a possible role for the European Central Bank in overseeing the system and it follows many such calls from European leaders for major and sweeping changes in the way supervision of the financial system is done.Other regulators are also looking for a major overhaul and this growing chorus of support for such change comes just 48 hours before a high level group headed by the former French central banker, Jacques de Larosiere is due to unveil a new blueprint for the financial system.What has not yet emerged is what this change will entail and the possible political opposition that could emerge in spite of the lip service we now hear emanating from political leaders, our own included.This change could result in a greater role for the ECB in Ireland’s financial regulation, which could include monitoring and analysis of stability, early warning systems for risk and more stress testing exercises.The emergence of such leadership among the European leaders can only be seen as good as it marks the beginning of an effort on their parts to bring about some financial stability at this crucial time.Each day now brings with it a deepening crisis and there is a great need for such change and quickly. Will we therefore see a change in the role of the European Central Bank in the affairs of Ireland? They would have the technical capacity and strength for such changeAs it currently stands, one of the main tasks of the ECB is to conduct monetary policy for the Euro area with the primary objective of ensuring price stability and (although not as clearly stated) non-inflationary economic growth. Would it be therefore reasonable to expect the role to extend to regulation in the areas of clear procedures and centralised supervisory arrangements in banking, insurance and securities? Our own system certainly appears to have failed, so perhaps this is the time!
Back to Index
“Scientia est potential” Knowledge is Power
By Hannah Kiely, CEO HC Financial Services (Wednesday 28th January 2009)
Latin forms the building blocks of many modern languages, so taking a somewhat Latin theme to this article to look at what knowledge can do for us. 2008 is over, and we know all about how terrible it was, 66% drop in the Irish Stock Market, 91% drop in Irish Financial Stocks, US Recession, Banks, Automobiles, etc etc. The big question is has it hit the floor, and is there any future shocks around the corner?It is worth having a look at some of the not so common areas for investment and arming oneself with knowledge, because as I said Knowledge is Power! Oil – has oil been oversold? The issues of demand and supply are still very much live issues, and consensus views would probably put the price of oil at around $75-80 by the year end.Soft Commodities – these include coffee, sugar, cocoa, corn, wheat, soybean and fruit. This sector has fallen sharply after a bubble, but there is a belief that the reasons for the previous increase have not gone away.Healthcare/Pharmaceuticals – this sector has been hurt by overall falls in the markets in 2008 but has strong cash flows even in recessionary times, and traditionally this sector can perform well in such times.Technology – here the recession might slow discretionary spending but companies will be looking to technology to deliver cost savings over time and this should feed into this sector.Cash – For many people cash will be the vehicle of choice for a few more months to come. But with interest rates still falling and with the potential for gains in the markets – holding cash long term might be worth reviewing.And to conclude in our Latin theme perhaps – “Abundans cautela non nocet” – which means Abundant Caution does no harm – or you simply cannot be too careful. However, we should also remember “sedit qui timuit ne non succederet” or he who feared he would not succeed sat still.
Back to Index
The Piggy Bank
By Hannah Kiely, CEO, HC Financial Services (Wednesday 30h December 2008)
What is the history of the piggy bank? Why isn't it a doggy bank or cat bank?
Well if you are prepared to work with me I can take you through the bumpy ride that is etymology or the study of words and we can see the unbroken chain from pigs to lumber.
One of the first things to look at is what is known as the Great Vowel Shift which happened around the time between Chaucer (1343-1400) and Shakespeare (1564-1616) when and how words were formed began to change! For example sounds began moving forward in the mouth such as “Meat” used to be pronounced “mate” – Try it! Further back we know that “y” was the Greek for “u” and pronounced accordingly.
Even much further back again, way way back; there was a word in English “pygg” which referred to certain clay, which was generally used for household items, such as pots etc used for storing things including money. At the time the barbaric Saxons learned to write, "pygg" was probably pronounced to rhyme with "pug," but as the pronunciation of "y" changed, "pygg" came to be pronounced about like "pig," and the holders were shaped like pigs as a joke, or because of confusion of the meaning.
The physicist, scientist and author, Dr Charles Panati, in his book The Extraordinary Origins of Everyday Things, and considered to be the world authority on the origin of things, claims that people were saving money in pots and jars made of pygg called “pygg jars” and that by the 18th Century, these jars had become pig banks, being cast in the shape of its common everyday name.
Pygg survived in its original pronunciation as "pug," a clay slip; and "pug mill," a mixing machine used originally for clay. Here, again, the spelling was changed to fit new ideas about spelling.
So what about the Bank! Well seemingly Bank originally meant "bench". Most believe that it is derived from the Italian work ‘Banco” or ‘Banca’ or the French word ‘beque’ meaning bench. So now you can probably see the connection between the words. It is interesting to note that Money lenders in Northern Italy once did business in open areas, or big open rooms, with each lender working from his own bench or table. If he went "broke," the piece of furniture was literally broken to signify that he wasn't in business anymore.
Now where is the lumber coming from? Other lenders did something closer to pawn brokering; the Lombardy people, a Germanic tribe living in Northern Italy, were famous for lending against collateral, and would have a storeroom full of exchanged or forfeited goods and goods not yet redeemed. This lead to storage rooms being called "Lombard rooms," since they looked a little like a pawnshop. Over time, this slurred into ""lumber room."
Ah, yes, lumbering through words about money
Back to Index
Diamond Skulls, The Golden Calf and Formaldehyde!
By Hannah Kiely, CEO, HC Financial Services (Wednesday 22nd October 2008)
Damien Hirst may have some unsold pieces sitting in a gallery and some may think his work is ‘tacky’, but there are still plenty of rich collectors willing to bet their millions on the British Artist. At the first night of the recent and much acclaimed Damien Hirst auction, Beautiful inside my Head Forever, made about Stg£70m which was about £8m above the estimate made by Sotheby’s. Very few living artists could pull off something as grand as Damien Hirst, with pieces such as The Kingdom a tiger shark in glass, steel, silicone and formaldehyde with a steel plinth sold at €9m+ and The Golden Calf, 18 carat gold, glass, gold plated steel, silicone and formaldehyde solution with marble plinth reaching over £10m.
What does this all mean for the watercolour landscape hanging on your wall in terms of enjoyment or investment in art?Over the last several years, two professors at New York University Stern Scholl of Business, Michael Moses and Jiangping Mei, have been compiling data that allows them to track the long-term performance of fine art. They take the original sale price and subtract it from the most recent sales price at either Christie’s or Sotheby’s in New York and then calculate an annual return on a single painting.For example, a J.M.W. Turner view of Venice sold at auction in London in 1897 for $35,000 and sold in April this year for $35.8m – a yield of about 6% per annum for 109 years – not bad! Stocks in the S&P 500 returned an average of 10.9% per annum in the last 50 years, compared to 10.5% per annum in the art index known as the Mei Moses Fine Art Index.
There are some obvious differences between a Picasso canvas and shares, in that you simply cannot sell Picasso that easily, and is a lot less liquid (that word again!) than stocks. Current Revenue regulations outlaw investment in ‘Pride in Possession’ Articles, and this definition includes ‘chattels, such as wine, fine art etc.Data shows that Art performs well as an asset over time, but of course to invest in buying in the first place, surely much of the satisfaction must be in being able to hang a piece on your wall and to show it off. It is important to get an emotional dividend from the piece and that you can live with it for years. One of the great ironies of the art world is that the artists rarely benefit to the maximum, as the value of their work increases more when it is sold on!
Back to Index
All that glitters is not Gold
By Hannah Kiely, CEO, HC Financial Services (Wednesday October 2008)
Shakespeare is the best-known writer to have expressed this idea. The original Shakespeare editions of The Merchant of Venice, 1596, have the line as 'all that glisters is not gold'. 'Glister' is usually replaced by 'glitter' in renditions of the play:MOROCCO:
O hell! what have we here?
A carrion Death, within whose empty eye
There is a written scroll!
I'll read the writing. All that glitters is not gold;
Often have you heard that told:
Many a man his life hath sold
But my outside to behold:
Gilded tombs do worms enfold.
Had you been as wise as bold,
Young in limbs, in judgment old,
Your answer had not been inscroll'd:
Fare you well; your suit is cold.
The meaning of this of course is that a showy article may not necessarily be of value. Commodity prices, including base metals and soft commodities, are surging and the dollar continues to depreciate and this is causing real inflationary pressures. Inflation will dramatically affect the value of bonds and cash and prudent wealth managers need to look to assets which perform well in such a macroeconomic environment. Gold thrives in such conditions as was seen in the 1970s when it rose from $35 to $850 for a return of nearly 2500 per cent in just nine years.
As all good portfolio managers know, the most important factor affecting long-term investment performance is asset allocation.
In order to achieve a diversified portfolio, the manager is looking for non-correlation of assets.
Gold is an extremely effective portfolio diversifier and it has been rising in all major currencies including sterling and has performed extremely well for UK investors. The last time we had similar conditions to today – slowing growth and rising inflation in western economies – gold rallied very sharply in all international currencies.
Gold rose from below £20 an ounce in 1971 to £300 an ounce in 1980 or a rise of some 1500 per cent. Were gold to replicate its performance of the 1970s again, gold would soar to multiples of the multi-year low in sterling below £200 an ounce in 1999, when Gordon Brown very short-sightedly and imprudently sold much of Britain’s gold reserves. Many analysts expect gold, at the very least, to reach its inflation-adjusted high of more than some £900 an ounce and $2000 an ounce in the coming years.
Back to Index
Time for a history lesson on tulips!
By Hannah Kiely, CEO, HC Financial Services (Wednesday 24th September 2008)
Tulip mania was a period in the Dutch Golden Age during which contract prices for bulbs of the newly introduced tulip reached extraordinarily high levels and then suddenly collapsed. At the peak of tulip mania in February 1637, tulip contracts sold for more than 20 times the annual income of a skilled craftsman. This is generally considered to be the first recorded speculative bubble. The term ‘tulip mania' is often used metaphorically to refer to any large economic bubble. There are many examples of financial markets and bubbles in early civilizations, such as the making use of loan agreements between individuals and, in the old Babylonia and Assyria, there were at least two banking firms in existence several thousand years BC. Equities and bonds were developed during the sixteenth century. In continental Europe in the sixteenth century, there existed equity issues that could be converted into debt if certain regulations were broken.
Similarly, preferred stock has been in use for a long time. Equity was traded in Antwerp and Amsterdam in the 1600s. Moreover, options and futures (called time bargains at the time) were traded on the Amsterdam Bourse after it was opened in 1611. Many of the European stock markets experienced major stock market bubbles in the eighteenth century. A famous example is the South Sea Bubble (1720), where the price of the South Sea Company rose from 131 per cent of par in February to 950 per cent by 23 June then fell back to 200 per cent by December. This bubble led to the so-called Bubble Act, which made it illegal to form a company without a charter or to pursue any line of business other than the one specified in the charter. The 1960s witnessed a number of innovations driven by regulatory constraints. The Eurobond market emerged where non-US companies could borrow in US $. At the time, foreign borrowers were excluded from the US markets. The 1970s witnessed the introduction of floating-rate instruments (bonds with coupons tied to a floating rate, such as the LIBOR rate in London, DIBOR rate in Dublin), and the trading of financial futures, such as futures on foreign currency, futures on interest rates, and futures on stock market indices.
Back to Index
The average pencil is 7 inches long
By Hannah Kiely, CEO, HC Financial Services (Wednesday 23rd July 2008)
Robert Brault once said: 'The average pencil is seven inches long, with just a half-inch eraser - in case you thought optimism was dead.' When I was growing up I was taught to believe that there is always a solution to everything. I still think this to be true. Today it is hard to be optimistic when all around you negativity is prevailing; prices, houses, food, oil, redundancy, costs, jobs, markets, investments, opportunities and so on. Everyday we wake up to new challenges, be they at work, the business world, financial or whatever. But there is always a solution. Sometimes it is not obvious and sometimes it is hard to see a way out. But it is there. If you are looking at buying a house at present - prices are continuing to fall - now it is a question of timing: do you wait a little longer or plunge in now believing this to be an opportunity? If you would like to invest in the stock market, after one of the most horrendous weeks for some time, there are many buying opportunities at present, the financials and other stocks are rising, a little more confidence is coming back into the Irish market. Is this the right time? If you wish to invest in a pension, surely when the funds are at such a low is a good time?
Procrastinating in the financial markets, like in life, can cost you dearly, so trying to find a solution at present may involve changing your outlook, being more frugal, shrewder, but doing something. If we all do nothing, we will come to a standstill and I believe we have been standing still for some time now. Look for opportunities, because they still exist; the money has not all gone away you know. Next week the Races are in Galway and along with it comes optimism hopefully, and the forecast is good, so let's stop standing still and get moving. Make some decisions, find some solutions and look at the optimism. I will leave you with a quote from Mark Twain, which is rather opportune for our coastal location. 'Twenty years from now you will be more disappointed by the things you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbour. Catch the trade winds in your sails. Explore. Dream. Discover.' - Mark Twain.
Back to Index
49 years is a mighty long time (By Hannak Kiely, CEO HC Financial Services)
By Hannah Kiely, CEO, HC Financial Services (Wednesday 2nd July 2008)
Being a Waterford woman with one serious (sporting) passion for Waterford hurling, I spend my life living in hope! Every year I start off with the same expectations, that this will be the year, the year that Waterford will finally win an All Ireland. Remember it was 1959 since this happened previously. But so far my hopes have been dashed! Nonetheless my enthusiasm is still rampant this year as I head off to various stadiums, of course secure in the knowledge of a new Clare man at the helm!!This is of course like investments where past performance is not an indicator of future returns and where returns can rise as well as fall. Furthermore if you are not in, you can’t win.Despite all the clichés, being invested in the markets is a matter of timing, so you don’t peak too early or come good too late! Historically when the market climate is uncertain, investors can loose sight of their long term goals, often being tempted to postpone new investments or even sell current holdings with the aim of reinvesting when the stock market stabilises. Of course, we would all like to be able to predict the movements in the markets, buying at the bottom and selling at the top. This is called market timing. But a bit like Waterford, being in there for the long haul demonstrates the long-term performance of equities is not necessarily about timing but about ‘just being in the markets.’ Research has shown that investments made when the market has already begun to recover and those made when it is still falling, have still paid dividends. In contrast, waiting for a better time to invest can cost one dearly, as Investors who remained fully invested in the UK market over the last five years would have received returns in excess of 60%, whereas those who were out of the market in the 10 best days would have seen returns cut to 40%, and those out for the best 40 days to just 4% (source; JPMorgan). Many of the stock markets best days have come immediately after a sharp fall!Perhaps many of Waterford’s best days will come after sharp defeats! Meanwhile as the chant goes; Waterford, Waterford, Waterford………and here’s to September!
Back to Index
What Women Want?
By Hannah Kiely, CEO, HC Financial Services (Wednesday June 2008)
II have no doubt there are many men out there who constantly ask the question ‘What do women want?’ and never come up with the ‘right’ answers. There are probably many women who ask themselves that question also!Women want many things and at different times in their lives, women often have an overriding ambition that they will get around to some day, when the children are grown up, the mortgage paid, the garden planted, a better job, and so on, waiting for the moment to come when we can make the final decision to - invest in a pension. As our work patterns and society change rapidly, it is time for women to take control of our choices for pensions. Unfortunately for many women, due to broken working patterns during their life, because of time off for childcare, etc, and time out of the workforce, retirement planning can become very complex. Everybody’s circumstances are different and as in all cases, one needs to take independent professional advice in planning for your future and for retirement, but some very simple facts remain about women and pensions in Ireland;
3 out of 4 women in Ireland have no pension provision in place
- Women’s careers don’t always move in a clear direction
- Many women take a break to have a family
- Many women job-share or part-time work
- Women often take a ‘quality of life’ decision before a ‘financial decision’
- Women on average earn less than men
- Women live longer than men
- About 3,500 marriages end in divorce in Ireland each year
- According to the CSO, there are 111,640 more widows than widowers in Ireland
- The current picture in Ireland of for women in their older years is a bleak one
- Every woman is her own person and needs her own pension, so what does she need to do!
- Women need to think about pensions now
- Women need to think about what way they want to live in retirement and what standard of life they wish for.
- Women need to stop putting off and start your pension today.
- Women need to take advice on their pensions
We all need to discuss and debate the real reasons as to why women in Ireland have
such low levels of participation. Then and perhaps only then can we know what it is
that women want and can indeed get! Let
the debate being……
Back to Index
Sex and the City (Tax and the City),
By Hannah Kiely, CEO, HC Financial Services (Wednesday, 4th June, 2008)
Like most Women, Sex, that is Sex and the City – is worth looking forward to again and again, to seeing these wacky Manhattanites and their convoluted love lives, piercing shrieks, high heels and cocktails. Whether is it the haute couture, Jimmy Chos’ or Manolo Blahnik’s or looking for Mr Right or Mr Big, the beauty of Sex and the City often lies in the weekly questions posed by Carrie Bradshaw; How often is Normal?, What constitutes Cheating? Is it better to fake it?Tax of course is a bit like that, the answers to cheating and faking it of course is no! But tax is part of our every day lives, whether we live in the city or the country we need to be part of the Tax System. But a bit like getting the most out of the movie, we should ensure that we maximise all our opportunities to get the most out of our tax relief and allowances.Did you know you can claim some or many of the following in your tax returns? To name but some – this list is not exhaustiveThese can be claimed at the time of your annual tax return. With Section 481 Film Scheme relief, profit of up to c.€1850 can be availed of by investing in a Revenue Approved Film Scheme – this being one of the few Tax Shelters still available out there!So if you cannot see yourself starring in Manhattan, why not benefit from investing in a Revenue Approved Section 481 Film Scheme this year, or at the very least ensure you are claiming all the tax relief’s and allowances available to you.While claiming tax relief may not be as glamorous as starring in Sex and the City, it may provide you with the extra funds needed to live life the ‘Manhattan’ way!
Back to Index
Why I queued at Abercrombie and Fitch
By Hannah Kiely, CEO, HC Financial Services (Wednesday, 19th May, 2008)
I was in London recently with my two teenagers and had to visit the obligatory A&F store to ensure they are fitted out with the ‘right’ gear! I generally shop in Ireland but A&F are not here yet! As a female entering the store, I could have had a coronary. I was met by not one, but four, toned, tanned, muscular, six-packs (I know this as they were stripped to the ‘perfect’ waist) young men who greeted me with a bright white perfect smile. Every where I went in the complex dark sultry building, there were more of these males, quite disconcerting. I think not! I queued to get in; queued to get served, listened to the loudest music possible along with hundreds of people, there was not a sign of a recession in sight. Perhaps my vision was distracted! Whilst in the queue, I noticed nearly everybody spent over £300 sterling at a minimum and yet retail sales are reported to be falling, certainly not at this store! This was like the Christmas sales. But further along Oxford Street and Regent Street, things certainly appeared much quieter than expected. This fall off is now certainly being reflected in the retail sales figures here in Ireland also. The most recent figures available are February and these show a drop of 1.9% compared with January and 0.1% year on year (yoy). This yoy fall was the first since January 2004. It is expected that March figures will follow this trend when released. New housing and overall consumer spending both contracted in the first quarter. As a result, economic activity declined for a second straight quarter.(Source; Davy Stockbrokers)Car sales are the most obvious areas of weakness with three factors at play – expected changes to VRT, mistimed road tax increases and petrol price increases. The fall off in new housing impacts sectors like furniture which rose by only 0.2% and electrical goods which plunged 6.7%. This is something we may have to get used to in the short term, but the resilience of the Irish Economy should see us through. Meanwhile, I feel another trip to A&F coming on!
Back to Index
The Scariest Roller Coaster Ride,
By Hannah Kiely, CEO, HC Financial Services Group Limited (Issue 15, 8th April, 2008
From the stomach-churning Colossus and its ten loops in Thorpe Park in England, to Australia’s 375 foot Tower of Terror, which drops you at more than 160 km per hour, or Japan’s Steel Dragon 2000? I have been on them all in the past few months and I haven’t even left Galway!
That moment when you are trapped in the seat of the ride, unable to get off, unable to move, and having no Choice! These feelings can also be applied to the current Stock Market fluctuations, but as anyone who has ever been on one knows, they do stop, they come to an end - you feel relieved, shaky, unsteady and very glad to get off. Like the Stock Market, time will pass and you will recall your experience, glad to have been there, to have experienced it and relieved that you made it through! Most of us have been on those rides in the past few months also, with Investment Markets, dropping 18% one day, rising again, dropping again, and so on. House prices falling, banks tightening their lending criteria, and personal debt increasing, retail figures falling, it is no wonder we feel we have done the world tour of the Best Roller Coasters.We are experiencing one of the most volatile periods in the Financial Markets for some time, but we have been there before and we have survived. Some may or may not recall the various periods in the history of the Stock Market – and if history has taught us anything – it is at these very times the stock market presented long term investors with opportunities to get in. The graph below (source; Irish Life) looks at how developed stock markets have performed since Jan 1973 and highlights the major events which stock markets have faced along the way. You can see why investing is a long term game and why even the most negative times are only small blips on a market that is rising. We must hold our nerve, we must ride it out, we must look at the opportunities that exist, and exist they do. The world will continue to need food, commodities, water, housing and so on. While some commentators may be likening this with the worst period since WW2, as in all the dips, the ascendancy will come again! Meanwhile, if you can, enjoy the ride! But do get good advice before you embark on the ride! With 20 years of experience in the Markets, we have seen many fluctuations and proud to say our experience has guided us and our clients through these times and no doubt will again. As always, the most important advice you can take, is independent and professional advice – Fasten your belts! End.
Back to Index
Turbulence
By Hannah Kiely, CEO HC Financial Services
Nobel Laureate, Richard Feynman, describes turbulence as "the most important unsolved problem of classical physics.” In Physics, there are many examples of Turbulence, such as smoke rising from a cigarette, the flow of a golf ball, the mixing of warm and cold air in the atmosphere by wind, oceanic currents, and trucks on the motorway in windy conditions, to name but some.
In the business world, there is a strategic framework for dealing with economic turbulence, which is based on the concept that the world economy is entering a new era of economic uncertainty. This framework is referred to as Chaotics.
Does this sound like anything going on in our world here in Ireland at present? Yes, turbulence and Chaotics! Even the IMF who bailed us out recently referred to this in their summary at the end of January that Ireland was experience some turbulence! The IMF did comment that despite this turbulence, Ireland appeared to be on target. So it’s good to know that the pain we are experiencing at present is helping us through this turbulent phase, yes indeed, doesn’t it make us all feel better?
So for a moment let us dwell on the concept of Chaotics and see how it can assist businesses in the current turbulent period. The concept is based on the belief that this turbulent experience will help businesses and organizations to detect the sources of turbulence within their own companies and to prepare scenarios to respond to this turbulence's and chaos. It also helps businesses to predict vulnerabilities and also opportunities. In detecting these, one can then work towards developing responses to ensure long-term resilience and success for the business. Another benefit highlighted by the authors of Chaotics, Philip Kotler and John A. Caslione is that this turbulence will help businesses to change their products and to meet new and fast-changing customer values and to develop a strategy to adjust in the new fast-changing environment.
Experiencing turbulence in business, which most of us are nowadays, has two major effects; one is vulnerability against which companies need to become defensive and the other is opportunity, which business now need to exploit. This presents the opportunity to change our mindset and develop one that takes into account, that there will be turbulence and unpredictable periods and to seek out the opportunities that can emanate from this. These realities will remain with us for the next few years.
As we move into the final days of the election period, perhaps there will be some settled period under a stable government and maybe unlike the most important unsolved problem of classical physics, the turbulence may ease, and the ride get smoother. Here’s hoping!
Professor Malcolm McDonald, from Cranfield University School of Management, in the UK sums it up best of all when he says “When skies are darkest, the brightest stars shine clearest”.
HC Financial Services ….we advise.
Back to Index
Green Money
By Hannah Kiely, CEO HC Financial Services
Having just returned from a month in the most pristine part of the world, the Antarctica, I have seen first hand the impact of global warming, with major recession of glaciers over the past 50 years alone! The Antarctica is one of the coldest, driest and windiest continents in the world, and remained largely neglected due to being considered hostile, lacking in resources and isolated. The Antarctic Treaty was signed by twelve countries in 1959 and prohibits military and mining on the Continent and supports protection and scientific research.
This in turn set me thinking about the impact of the Green Economy here in Ireland and to ask the question why can’t Ireland succeed in developing a Green Economy? In a high level report issued by Forfas in November 2009 a claim is made that the green economy can in fact make a significant contribution in Ireland by creating employment and export opportunities in areas such as renewable energy, energy efficiency, waste management, recycling and water treatment.
The value put on this market was €2.8 billion in 2008 and potential for growth in Ireland and the global market for environment goods and services are expected to grow to $700 billion by 2010 and $800 billion by 2015.
One of the reasons Ireland can succeed according to Forfas is that it has excellent natural resources in wind and oceans. Furthermore the need to reduce costs to business in areas such as energy and waste management should drive cost reduction for these businesses. Ireland also has a well educated workforce in areas such as ICT, food, tourism, finance and construction. Regulation is improving and ‘green’ procurement is becoming part of the public authorities remit. Good investment in R&D in the energy sector is strong. We have a Green Party as part of our government at present also. Add all this to the reputation of Ireland as a green island and the potential is vast.
The economic benefit of investing in these sectors must be explored including the cost of capital outlay including areas such as civil engineering, electrical systems, land leases, and bank interest cost. It would be timely for Ireland to look at some of the mistakes made during the era of the Celtic Tiger and avoid those again!
Finally the Green economy is a model in contrast to the existing ‘black’ economic model based on fossil fuels and such model is believed to bring about sustainability in the Social, Economic and Environment. Let 2010 be Green! |
