The Behavioural Budget: How Tax Shapes Us

0:00Still waiting in line? Again? That's time you'll never get back. Save time and money with Stamps.com. Over 4 million businesses have skipped the line with Stamps.com. Join them to save up to 90 % off carrier rates from your computer or phone right now. Print postage for certified mail, registered mail, and packages in seconds. Then schedule a pickup right from your home or office. For a limited time, go to Stamps.com and use code PODCAST for a free welcome gift. Taxes and fees apply. We all belong outside. We're drawn to nature. Whether it's the recorded sounds of the ocean we doze off to, or the succulents that adorn our homes, nature makes all of our lives, well, better.

0:41Despite all this, we often go about our busy lives removed from it. But the outdoors is closer than we realize. With AllTrails, you can discover trails nearby and explore confidently with offline maps and on-trail navigation. Download the free app today and make the most of your summer with AllTrails. To understand the economy, you have to understand human nature. This podcast is powered by Acast.

1:14David McWilliams: How are you doing there? It is time for the podcast. And the podcast today is going to be about, we won't bore you with the Irish budget, but we look at the Irish budget in the context of politics, okay? John, this is an economics podcast. Yes, yes. Budgets are a central part of economics. I'm going to ask a fundamental question though, John. Mm-hmm. When it comes to raising revenue, is taxation about, and just listen, or keep this in the back of your head, raising revenue or is it about changing behavior? Ooh. Right? So the idea could be, I think budgets in the future are going to be along the following lines.

1:53David McWilliams: Because the bond markets are so deep and capital markets have so much cash and governments like Ireland can borrow when they want, that budgets will not necessarily be about raising revenue. So we increase taxes to get money to fill a gap. I think a smarter way in the future would be to raise taxes or cut taxes to change behavior and use the bond market to raise revenue. So borrow to raise revenue. Right. But use the taxation system, not exclusively, implicitly, to change people's behavior. So, for example, if you want people to have less of an incentive to leave things derelict, you change the taxation system to penalize bad behavior and to reward good behavior.

2:45David McWilliams: Yeah, I get that. I agree with that. So that idea, so that taxation becomes part of the economy of behavior. So you're trying to massage people in a certain direction, as opposed to just explicitly worrying about raising revenue. And the reason this is incredibly opposite for Ireland is that Ireland's budgetary mathematics, arithmetic, calculations, whatever you want to call it, have been so profoundly changed by the gushing spigot that is the money from the multinationals that ultimately we have a source of income. Maybe it won't last forever, but we have a source of income that is acyclical.

3:30David McWilliams: And by that I mean it's not involved or adjacent to the Irish economic cycle because it's coming from outside. So that's one way of looking. Dear listener, we're enlivening the debate about economics today simply because there I was sitting in the H - Well, actually, do you know where I came up with this, John? I was in, I went for my constitutional this morning. Yes. Lovely, beautiful. Newspapers under your arm. Newspapers under my arm. beautiful beautiful autumnal morning in Dublin yeah wind a little bit blowy it must be said a little bit choppy the sea was a little bit violent looking it was in the joy scene description it was snot green yeah and scrotum tightening I suspect and I was down at the 40 foot not swimming not swimming no no no I hasten to what yeah contemplating John figuring out ideas for podcasts and I decided to pay a little visit into the joy center because there's a book that I wanted to read for a while, which is called Ulysses Unbound by Terence Killeen, a reader's companion to James Lewis's Ulysses, right?

4:36I wanted to read that for a while. Somebody told me it's very good and I said, I'll go down and I'll get it down there. And do you know who I bumped into? And this is a very strange one. Patti Smith, the legendary punk. Patti Smith. Wow. On the 50th anniversary, she's playing a gig in Dublin and she was mooching around. Wow, that's incredible.

4:57David McWilliams: So her iconic album Horses is 50 years old this autumn. Great album. And she's gigging all around the world. And so there I was looking at Joyce's guitar, which is there in the museum. Beside me is Paddy Smith. Keep the tune there, Paddy. Exactly, exactly. So that was the mad things that happen to you when you go, She's a big Joyce fan. She's a massive Joyce fan. So up we went up to the top of the tower and looked around, took in the whole views, chatted about rock and roll, music, all that jazz. And it was pretty amazing. Was Joyce a good guitarist? Joyce was a very fine guitarist, but he was an incredibly good tenor.

5:43Right. He was a great singer. Yeah. And in fact, one of the nicest things about Joyce's marriage is that Nora Barnacle never read anything he wrote. She couldn't be bothered. She said Jim's meanderings, is what she called them. But she loved to hear him sing. And he had a very fine voice, tenor's voice, and he came from a very musical family. Did he write songs though? No, no. See, that's really interesting that for such a writer, a profound and prolific writer, and if he was into singing and he could play guitar, it's really unusual that he didn't turn his hand to at least a handful of songs.

6:22I could stand corrected. There will be Joyceans out there who will be twitching at this very moment. They will have a back catalogue of Joyce's finest unpublished work. But I don't think so. So anyway, I was thinking, as I was contemplating, as I was talking to Paddy Smith about Joyce and poetry, I was thinking to myself, what's going on with budgets?

6:41David McWilliams: What's going on with Ireland? What's going on? How do we frame the budget? That's when Paddy Smith was going, yeah, okay, right. Yeah, yeah. Yawning. Yeah, exactly. I said, do you realise the bond market could be an alternative planning to the actual taxation issue? But my point is, John, that is what we're going to discuss against. We're going to frame the discussion with maybe a new way of looking at budgets. But first, we have to look at the nuts and bolts. I know this will make you yawn. No, no, but I wanted to come back to your opening statement there about tax. Should it be a revenue raiser or a...

7:17A behaviour nudger. Not even nudge, just change. Should it be used to change the society? Tax, when it was always used as a behavioral change, get them using bikes or whatever it is. The great one is cigarettes. Yes, cigarettes. Cigarettes is a great one, right? Cigarettes and alcohol. Another gig I was at. I know, I'm going to ask you about that in a minute. But it's always such a blunt instrument and it always feels like it's penalizing, you know, people's behavior, which it is, of course, and that's the incentive. But it always feels wrong. It always seems to be the go-to tactic. Because it's not done well.

8:00I think that we stand back, right?

8:02David McWilliams: So there's a couple of things we know about economics that stand up to rigorous analysis. One is that humans respond to incentives. Yeah. Number two is the price system is a very good incentive. So you increase prices dramatically and eventually you will change people's behavior because you will penalize their bad behavior. It's that actual phrase that bothers me. Their bad behavior. Who are you to be telling it's bad? Smoking is bad behavior. I know you smoke. But I mean, the long term effects on the health of the nation from cigarette addiction, from giving profits to large tobacco companies like BAT.

8:40David McWilliams: I'm going to get all hectoring here. Right. I'm finding my inner sociology professor here, right? But, you know, you don't want people getting all sorts of tumours associated with smoking. Sure, of course. Boozing is the same. All those things that we love doing, right? So is processed food. So is processed food and all that sort of stuff. So is dereliction. So is changing the way people drive. Yes. All those sort of things, right? The idea here is that if we have in the early 21st century a large global reservoir of capital called the bond market, which we can tap at will, then it would seem to me to be more logical, revolutionary, and in a way innovative to regard the budget and taxation or the lack of it as part of an armory.

9:33David McWilliams: are the weaponry of states to change behavior for the better. And the best example of that would be something like dereliction, which we know, for example, we've sold on the podcast for so long, is a social cost to society. But that cost is shouldered by the average person as opposed to the individual who's involved in dereliction who's the owner of the derelict property. So in order to change their behavior, what we do is we give serious tax breaks to people who want to renovate and serious tax penalties to people who want to sit on derelict property. That's one example. Yeah, yeah, yeah. I'm all for that.

10:15David McWilliams: And it's this idea of epics, these, you know, extreme positive incentives for change, right? So that's one thing. But at the moment, we aren't looking at budgets in this regard. I think this is the way they'll be looked at in the future. Yeah, but hang on a second, Mac. Then look at the other side. I'm just coming from Joe Punter's perspective here, that, you know, we have, what is it, 220 billion in debt. So why should we be looking to the bond market to go even further into debt? Because the problem with debt is that debt as an absolute figure is meaningless. It has to be relative to something.

10:51David McWilliams: So it has to be relative to the income. So that's why we have the debt GDP idea, right? Yeah, which is what, 70 % or something. It's probably much lower now because our GDP is very, very high. but it's misleading we know for all the multinationals. So the way of looking at deaths as an absolute number that in some way there's going to be a day of reckoning and that day of reckoning is going to come down in the economy and it's going to smoke down the debtors. This is a very, very biblical, we're getting very biblical here, right? Yes, it is, yeah. Have you ever heard of a thing called the rapture?

11:20Yes.

11:21David McWilliams: Right, you know the rapture is this idea particularly embraced by Americans that there's going to be a... The evangelicals. Evangelicals, there's going to be a day where God is going to come down from Mount Sinai or wherever he's hanging. Wherever he's hanging out. Of course it's true. Exactly. I saw it, right? And on the day of the rapture, all the sinners will be smoked down, right? So one way of looking at economics is through a morality tale, right? Which is, Americans really quite like this. Evangelicals really quite like this. Oh, big time, yeah. That economics is part of morality and debt is a endemic delinquency which is indulged by people who have no self-discipline.

12:00David McWilliams: They have no faith, actually. They have no belief, right? And that someday it's all going to come crashing down. Now, the interesting thing is, every now and then it does come crashing down. And we're going to talk about that in the context of the Irish budget. Because Ireland has had two moments of a rapture. One in 1987, when we ran out of money. Yeah. And one in about 2008, when we ran out of money. Yes. So that was God. It was God. It was the holy hand of the Bon Vigilantes, John. The holy hand of the Bon Vigilantes. But my point is, if you are a believer, you know the way people who believe in lots of these sort of, they believe in rhythms, like there's a 20-year gap, and then there's a 20-year gap.

12:42David McWilliams: So if you believe that sort of stuff from 1988 to 2008, it's a 20-year gap. 2008 to maybe 2028, there's going to be a new day of reckoning. So we'll talk about that in the context of what happened last week. Nostradamus here. So exactly, exactly, down in the HQ. But okay, so in short, Irish budget was framed by the centrist parties looking, I think, at a very old-fashioned way of looking at politics. So we need to factor this in as well. But let's just look at the numbers before we analyze the politics. The numbers are the following, right? about 8 billion in tax cuts and our welfare spending.

13:27David McWilliams: That is about 7 % increase in public spending in a year. The government's target is 5%, so there's a certain amount of fiscal incontinence there. That's probably not surprising given that, A, they have all this money coming in from multinationals. And it's not noticed. Exactly. And B, we are in a new electoral cycle. Right. Forget the presidential election, but the presidential election, if you can look at it as one thing, yes, it's a plebiscite, but look at it as the starting gun for the new electoral cycle. Because obviously all the left has got behind Catherine Connolly because what they missed out on last time was a pan-left alliance winning the duel.

14:09David McWilliams: That didn't happen. In fact, the centrist parties won and won very, very well. But this idea of Catherine Connolly is an experiment of a pan-leftist alliance. So the people before profits and the Labour Party and the Sock Dems and Sinn Féin are coming together, coalescing around one candidate. And of course, this is what they're hoping will be a dry run for the next election. Right. On the other side, you have the Fianna Fáil, Fianna Gael centrist parties. And the centrist parties have been always quite good, are always actually extremely good, at kind of figuring out where the population is in Ireland and aligning to that.

14:48Right.

14:49David McWilliams: And when they can't figure it out, they invent a thing called a citizen's assembly. And that figures it out for them. So for an abortion, where they didn't have the balls to say, we are pro-abortion. This is a big focus group. Well, exactly. And that focus does deliver what would be a green light for change. but it's a very cautious approach. In fact... But it's a reasonable approach. There's a man coming to Kilkenomics called Nicholas Gruen, an Australian economist, who believes that this is the way you should run countries is on citizens' assemblies, right? Because they're much more democratic and much more representative and they're much less likely to be influenced by lobby groups.

15:28Well, that was the other thing I was going to say is, you know, when we were talking about this last week, when we were talking about the chasm between what politicians believe and what Joe... What the street believes. What the street believes is that, you know, is it the fact that most of the centrist politicians have, you know, got into bed, tucked in a little bit too tightly with many of the lobby groups, particularly the land lobby here in Ireland? I think the land lobby is huge.

15:58David McWilliams: I think the multinational lobby is huge. Yeah. But I also think on the left, the sociology department lobby is huge. The NGO lobby is huge. Right, yeah. And they're all constantly tugging at the shirt or shirts of the various politicians to try and say, do something for me, do something for me. And at the end of the day, it's a cacophony. And what you need against that is a strong civil servant. But you also need an intellectual civil servant, not just strong, to say, actually, this is the way we're going for the good of the state. And I believe... Yeah, because the people are left out of this.

16:33It's the lobbyists who are paid to talk.

16:37David McWilliams: Yeah, I know, and to bend the ear of politicians. But so this is lobbyists. We have just come through a mecca for lobbyists. But if we look at the numbers, right, the numbers, what worries economists and various different economic think tanks in Ireland, to the extent that we have them, is that the government is spending far too much money. that money will run out. If that money runs out because of some shock from outside, like for example, tariffs and the multinationals, go back to America, we will find a massive hole in our balance sheet that will force austerity upon the country, as happened before.

17:20David McWilliams: That austerity will throw up a radical government that will flirt with the notion of default. Then interest rates will go up through the roof and then Ireland will have to go into an adjustment, which the sort of adjustment we saw after 2008. So that's one story that goes, that's basically constantly, economists will always default to this Armageddon situation. They have some reason to do so. Right. But when you say the country's spending too much, there's nothing wrong with spending money, but it's about spending it on the right thing. So if we were spending huge amounts of money on new infrastructure and, you know, stuff that is going to make the economy more productive.

18:07And, you know, that's all good, surely.

18:09David McWilliams: So the fascinating thing is of the odd, 8 billion odd of increased spending and or tax cuts, 6 billion this year will be on current expenditure, which is wages, salaries, et cetera. Only 2 billion is going to be on infrastructure. So you would argue, and many would argue, that should be inverted. Yeah. But the problem is that infrastructure doesn't vote. People do. Right. So of that six... People buy houses though. Yeah, well, that's another issue. But of the six billion that has been spent, the state can actually say, the centrist parties can say, look, well, we looked after you and we gave you this money and that money.

18:49David McWilliams: But let's have a look at the history of budget crises in Ireland. Because the amazing thing is you and I have lived through, I think we're the only people who live in a Western economy that has lived through two massive budget crises where the country went bankrupt. We've also lived through four currencies. We've used four currencies since we were kids. It's kind of mental, right? We've had balance of payments crisis. We've had housing crisis. Ireland is like a bipolar economy. It's either really good or it's really shit. Yeah, it's all about the drama. Yeah, it is all about the drama. Whereas if you're living in Belgium or Holland or Denmark, you know, you plot along.

19:27If you're born in the 1960s, 1970s, 1980s in Denmark, you're grand, right? Whereas we don't do that. We go hell for leather.

19:37David McWilliams: Paddy goes completely mad, loses the complete plot, and at the end of the day, then has a big moment of, oh my God, what happened? So let's have a look at the history. Okay, Mark, hang on a second. Hang on. I'm dying to get into this, but let's do that after a little bit of this. Fair enough.

19:59Still waiting in line? Again? That's time you will never get back. Save time and money with Stamps.com. Over 4 million businesses have skipped the line with Stamps.com. Join them to save up to 90 % off carrier rates from your computer or phone right now. Print postage for certified mail, registered mail, and packages in seconds. Then schedule a pickup right from your home or office. For a limited time, go to stamps.com and use code podcast for a free welcome gift. Taxes and fees apply. Your team just added its 67th AI tool and also your 67th security blind spot. The good news? The Vanta agent works like a GRC engineer in the background, finding every app your team uses, scoring the risk, and drafting fixes for you.

20:43Vanta is the platform used by over 16 ,000 fast-moving companies like Ramp, Cursor, and Harvey, who are shaping the future with AI and staying ahead of AI risk. Get started at Vanta.com.

21:22see the full history, and respond fast. Quo is the number one rated business phone system on G2, trusted by over 90 ,000 businesses. Set up in minutes on any device. Keep your existing number, add teammates as you grow. No IT, no hassle. Quo's built-in AI agent even handles after-hours calls and books appointments. So you're covered around the clock. Money is on the line. Always say hello with Quo. Try Quo free plus 20 % off your first six months at quo.com slash tech. That's q-u-o dot com slash tech.

22:02Okay, Mac, growing up in Ireland is drama to behold. It is. And you were just saying that we've been through four currencies, several major crises. Major banking crisis.

22:14David McWilliams: We've had a banking crisis where all our banks went bust. All of them need to be bailed out. We have had a massive current account crisis in the 1980s. We have had a extraordinary austerity in the 2000s, which was preceded by an extraordinary boom. And now we're booming again. No other country behaves like this. We're getting boomier. As the Bertie said, we're getting boomier. I'll give you the brief backdrop. When you and I were in school, we had a titanic struggle between two characters, and you book out about this, Charlie versus Garrett. Oh, yeah. Right? Both of whom spoke the language of austerity but behaved like Juan Perón, right?

22:58They spent, like, I mean, Charlie, everyone accuses Charlie of spending... The shirts, see? He spent it himself. Yeah. But the point is that Gareth Fitzgerald was worse. Gareth Fitzgerald claimed to be an economist.

23:10David McWilliams: I have no idea where his economic learning came from, right? Right. But I do, I mean, I know academically where it came from. But in terms of the 1980s, so we're in school, the economy is collapsing at a time where our three major trading partners, the UK, the US, the European Union, are booming. We managed to be in a permanent recession, which is quite an achievement for a small open economy, right? All of our on our road, most people emigrated. And many of them still remain in the States or in the UK or in Australia or whatever it has to be, right? But the critical part was it was all to do with an inability to stop spending money.

23:59David McWilliams: The governments had this notion in the late 70s that Ireland could expand and we could operate massive budget deficits, increase the size of the public sector. In so doing, we would kickstart the economy. And lo and behold, we would have this extraordinary public sector driven boom. This is at a time when Thatcher and Reagan were the vogue. So Artem's going way. And of course, it all came to head in 1987, 1988, where we had a massive budget crisis. Yeah. Under Charlie Houghy. Garfield's Gerald had destroyed the public finances. Hahi said he was going to destroy them even more in the election of 87 he said don't worry everything will be grand and then he got into power in 1987 1988 with a new party called the Progressive Democrats they were biting at its heels remember Desi O'Malley and all that sort of stuff and they were all seeing who was going to do a deal with each other but when he got in he got into the minority government and he cut back spending completely this was the first major crisis So 1988, Ireland had a massive budgetary crisis.

25:09So much so... Ironically, 1988 was the year I left Ireland.

25:14David McWilliams: Exactly. Yeah. Everybody was leaving. Yeah. Everybody was leaving simply because the prospects for the country were so appalling. Interestingly, they cut spending. The private sector realizes they're getting things under control. They have an amnesty, which is the most amazing thing for tax and cash under the bed. They thought they were going to get a few hundred million. I think they got about two billion. So basically all the mix, that money, it's squirreled away. And when the amnesty caves, okay, it's like the economic equivalent of confession. Yeah. Right? You go five Hail Marys, two Our Fathers, all your tax indiscretions are forgiven, just give us the money.

25:55Yeah. And then you get the beginning of the boom. Then we go through the 90s booming. That was a clever idea. It was a clever idea. Amnesties are a great idea. I think we should have amnesties for all sorts of things. They're a very good idea. And they're also kind of morally a little bit generous. You're like, you know what? You made a mistake. That was Charlie's idea, was it? Charlie Hawley was cleverer than any politician we have ever produced. Doesn't mean he was the best one, but he understood. He lined his own pockets.

26:22David McWilliams: Yeah, like he was corrupt, but he understood. Somebody years ago, I was asking him how, you know, get on careers and la, la, la. And he said to me, an ex-boss of mine, he said, always bet on self-interest, other people's self-interest, which I thought was a really interesting idea. Right. That how he could understand, what are people interested in? What is it? Is there a back pocket? Is it the motions? Is it whatever? And just back it. Yeah. That's what Hawi did. I mean, he had lots of other problems. We can go into that. And by the way, don't worry, this is not going to be a historical political podcast.

26:54David McWilliams: Yeah, yeah, yeah. But then we go into the Bertie years. Yeah. And of course, the Celtic Tiger years. and this ends with the most monumental crash that any country has experiences. I mean, outside of Argentina and some other Latin American countries, the Irish crash in 2008 was as bad as it gets. And then by 2010, we were in a situation where nobody would lend us money, so we had to go to the IMF and the European Union, and then it's the Troika, right? So the interesting thing is we have in our lifetime experienced two monumental interventions. One by the IMF, one on our own accord, but both of them the result of very, very poor financial management by the state.

27:45The question is, 20 years after 2008, let's say 2028, which is coming up, it's not that far away.

27:53David McWilliams: will there be another fiscal crisis just to make it symmetrical so therefore you will have these three crises and again that is the fear that people have well surely that will depend on other factors such as america trump tariffs you know will the multinational stay will they be dragged back by you know whether it's trump or not but by the mega movement you know what happens in Europe, because Europe is going to go into a bit of a crisis. Because a lot of the European countries have had recent elections as well. Well, it's just, if there's a global downturn, and this week some of the other podcasts are going to come from Australia, John, as you know.

28:39David McWilliams: And what we're going to do is look at the global, look at the world from there. Yeah, that would be really interesting. So if there is a global recession, a small open economy like Ireland will have an amplified negative impact here. Yeah. Part of that impact will obviously be on multinational revenues. The other part of it is, John, and maybe we'll save this podcast about politics. Do you remember about two or three weeks ago we did the idea of, is the mainstream now radical and is the radical mainstream? Yes. So the fact that the Irish parties are out of step with the Irish people on things like culture, on things like immigration.

29:21David McWilliams: Most Irish people want less immigration. And more importantly, they don't want multiculturalism. Irish people are happy for immigrants to come in and work, but they don't want the objective of policy to be multiculturalism. They want people to assimilate. And on things like law and order, they want much tougher sentences. Yeah, yeah. So when my granny, John, owned a pub, right, I used to love going down to the pub. It was so magical. It was West Cork. I loved the accents when I was a kid. I loved the noise of the pub. I loved the farmers. I loved the banter. It was brilliant. The smell of the pub as well.

29:58The smell of the pub. And that's when you could smoke in pubs. So there was that kind of stale alcohol and stale smoke. The smell of porter and fags. The amazing smell of porter and fags. Tater crisps. And that was when, and tater crisps, of course, and peach peanuts. Right? But that was when also, and the reason the place smelt of porter was they had a porter tray.

30:19David McWilliams: See, that's gone now. The idea that you'd have a Guinness tray and the old Guinness would collect in a massive tray under the tap. Yeah. And that would flavour the room, let's say, with aromas of the stout and Beamish and Murphys. But I always love that my granny at the end would roar, Have ye no homes to go to, right? And we finally kick out farmers. They all get up in their 150s, I remember, and drive off into the sunset, right? But have ye no homes to go to was my granny's expression. That is going to be the rallying call of Irish politics because there is a gradual, progressively growing minority in Ireland that want a home that is harder on immigration and harder on sentencing.

31:11David McWilliams: And what they're getting is much more left-wing stuff that they're being offered. So that was the case of that Maria Steen one, who was basically, in effect, bundled out of the presidential election. The most recent polls said 22 % of people would have voted for her. That's huge. That was on the Ireland votes. The Irish Indo just did a poll there. That's huge. That's absolutely huge. So there is a big section of the community that doesn't have a political home to go to, that don't see their concerns addressed in the manifestos. There is a massive opportunity for a new party to emerge. And that party could be slightly to the left economically, slightly to the right culturally, or slightly to the right economically, slightly to the right culturally, or very much to the right.

32:01But the right is now mainstream. So we'll come back to that maybe in a further podcast.

32:06David McWilliams: Where do you think that's going to come from, though? Well, as we spoke about a couple of weeks ago, the interesting example is the only country that hasn't had a new populist party is Denmark, because the old Social Democrats clamped down on immigration. They clamped down on citizenship, they clamped down on immigration. They didn't give a reason for the rise of a new party. No, they just said, look, if immigration is a problem, and if Danish people don't want that many immigrants, so be it. We will close the borders and we will make it much more difficult. Now, the cultural backdrop to Denmark was the Mohammedan cartoons of about 10 years ago where a Danish cartoonist, I don't know if you admit, drew pictures of Mohammed.

32:51Yeah, yeah, I remember this.

32:52David McWilliams: And Muslims around the world went mad. Yeah. And the Danes said, no. Yeah. This is Denmark. You can take the mickey out of whoever you like. This is the essential nature of the Danish system. And that was seen as a trigger for the Danish social democrats to abandon certain amounts of multilateralism and go back and say, we're going to defend Danish working class people. Yeah. Anyway, we will come back to it because it's a fascinating place and Ireland will experience a political revolution in the next two years. There's no doubt in my mind because the mainstream parties are radical on immigration and law and order.

33:35David McWilliams: And the actual people are mainstream on it, which they want tighter, not loosening. So we'll go back to that. But if you just come back to the budget, the budget has been framed, again, against a background of abundance. And the fear on the part of economists is that those abundant years tend naturally to come to an end. And if you have made enormous amount of, and this is to your point about the capital versus current, if you've made enormous amount of current commitments and promises to people on issues of welfare and issues of tax breaks, it's very, very difficult for a party to not deliver on those promises.

34:20David McWilliams: And if you get, and we'll leave it here, John, a downturn in the next two years, coming up to our 2028 anniversary, right? And by the way, look at the front of The Economist this week, John. Is Britain going to go bust? We told them that nine months ago. We did that, yeah. Yeah, yeah, yeah. So we're ahead of the curve. But my thing is, can you imagine this? I'll leave for the listener to imagine it before I go to Bondi Beach or wherever I want to go. Bring the sunscreen, man. If you're telling me, factor 200. Anyway, just imagine this thing. Budget 2025-26 that we've just seen is the last or second last of the big giveaway loads of money budgets.

35:05David McWilliams: There is a downturn in the global economy. There's a downturn in revenue. The incumbents can't deliver on the promises. There's an absolute opening chasm. The existing left-wing parties, because they will continue to cling to their policies of open borders, multilateralism, globalism, etc. They're not offering a home to the voter. A massive gap opens up and some party comes in, fills it. And that's when Ireland shifts on its axis. and this presidential election, with all its nice things about being nice to everybody, looks like a very distant memory. And politics in Ireland shifts the way politics in Europe shifted, not because of the emergence of a party, but because the party emerged because the present system are not addressing the concerns of the average dude.

36:05And it's on the, as the Americans say, it's on me.

36:08David McWilliams: The responsibility is on the present parties in power to reflect national anxieties. Somebody once said the role of the leader is to understand the anxieties of the people and do something about it. Yeah. And those anxieties are emerging now. Let me ask you one quick question before you go. With the presidential election coming up, one of the issues that keeps cropping up on the hustings is about a united Ireland. Yeah. And could, with all that talk, like that'll take quite a while for that to come about, a United Ireland, but it's pretty inevitable. But could that third way, that third party, come from the North?

36:54David McWilliams: That's a very good question. I don't think it could because, with the exception of me, who's taken the United Ireland incredibly seriously and married somebody from the North. I've actually, I lived the Belfast Agreement or Good Friday Agreement. it could come from the north it could be influenced certainly by the north yeah so for example the presidential election the first time we haven't had a candidate from munster which is again oh yeah big deal you know yeah munster you know would regard itself as the kind of you know very much the soul of the nation if you know what i mean so i think it could come from the north i think the united ireland debate as i've always said there are now more immigrants in the country on the island than there are unionists.

37:41David McWilliams: So that shows you just how quickly the demographics has shifted. But, and it's the big but, is probably the two major blocks against United Ireland will obviously be unionists who don't want it. That's in their DNA. And the broad middle-class southerners who fear the north. Yeah. don't go there. I mean, I'm always amazed because I'm up the north all the time. How little my mates go up to the north. How little they know of the north. How little people from Dublin know of Belfast. Much less so than we know about Cork or Limerick or Galway. There's less of a reason to go up there. You know, and it's, for me, there's loads of reasons.

38:27Oh, of course, of course. But my point is,

38:31David McWilliams: you know, the great quote about history was, history, the past is another country. They do things differently. I think the same thing goes for Ireland. The North, for many in the South, is another country. They do things differently. Let us come back to the issue of the 36th County Republic, some stage, the flag, the anthem, the army, joining NATO, all those things that Irish people will have to swallow for a united Ireland. And again, there's this small little problem of violence and unionism and loyalism becoming to this new Irish state what the IRA was to the Northern Irish state, a destabilizing influence.

39:18David McWilliams: And it's out to destroy it all the time. Do we have the appetite for that? I'm not too sure. My favorite quote on history is, history, it's just one bloody thing after another. Go on. We're talking. Bye.

40:29We'll see you next time. agent works like a GRC engineer in the background, finding every app your team uses, scoring the risk, and drafting fixes for you. Vanta is the platform used by over 16 ,000 fast-moving companies like Ramp, Cursor, and Harvey, who are shaping the future with AI and staying ahead of AI risk. Get started at Vanta.com.