Rapid Growth

During the boom there was increased social mobility and disposable income; average gross weekly household income in the state in 2004-5 was €989.53 which was48.4% higher than the €666.72 recorded in 1998-9. Disposable income (after tax and social insurance) also increased by almost 53%. Higher earners had a variety of opportunities to avoid paying substantial tax; in 2003, the statistical branch of the Irish Revenue Commissioners listed the top 400 earners in Ireland without naming them, and 51 of them had an effective tax rate of less than 5% while of the 117 highest earning, 29 had no tax liability at all, suggesting that tax shelters were protecting the wealthiest to an extraordinary degree. Figures in relation to public spending as a proportion of the country’s national wealth were also revealing of Irish priorities; in 2000 the proportion for Ireland was 32% compared to the UK’s 40.2%, Belgium’s 49.9% and Germany’s 45.9%; the average across the EU at the time was 47%. Three years later, Ireland was 27^th out of 30 OECD countries for social transfers(the redistribution of wealth through welfare payments or pensions). In the midst of extraordinary economic growth (which witnessed, for example, the Irish economy growing by 11% in 2000) there were also observations from a UN Human Development Report that suggested, in light of social spending falling as a share of GDP from 1997 to 2001, the Republic had the second highest level of poverty in the developed world.  Another interesting aspect of the boom was the proportion of new jobs that were being filled by migrant workers; for example, of the 90,000 jobs created between September 2004 and September 2005, 40,000 of these went to migrant workers. The following year, there were 420,000 foreign nationals in the Republic, up from 200,000 in 2002, out of total population of 4.2 million, the highest Irish population since 1861.

But it was the reliance on the construction sector which was truly alarming and which by 2006 amounted to nearly one quarter of Irish GDP, compared to less than 10% for a normal economy. Indeed Ireland was building half as many new houses a year as the UK which had 15 times as many people to house. There is no doubting the importance of land and property ownership as a driving force in post-famine Irish history; the land war of the late nineteenth century was a defining campaign that was ultimately to result in the breaking of the power of the landlord class, the transfer of property to former tenants and legislation that enabled ownership to be entrusted to a new class. Perhaps what was ironic was that one hundred years after that revolution in land ownership had been largely completed, it was replaced by a native class of landowners and speculators who, with external speculators, were considered by many to exercise their domination of land and the Irish economy in an even more invidious way than some of the most unscrupulous nineteenth century landlords. Ireland in the twenty first century was consumed by a property boom and bubble that was ultimately to be its undoing.