Why are we surprised now the cat is out of the bag and among the pigeons?

The disclosure that Michael Noonan and Brendan Howlin are planning a tough new economic programme that will kick in when the troika pulls out at the end of the year has put the cat among the pigeons in Cabinet.

A number of Ministers were aghast at the report in yesterday's Irish Times. Some would have preferred to see a more nuanced message sent out; others are reluctant to accept its validity. In recent months, key Ministers have talked up the prospects of a relaxation in budgetary discipline following the deal on the promissory notes and the likely prospect of exiting the troika programme at the end of the year.

Minister for Social Protection Joan Burton has been to the fore in calling for a change of direction when the troika programme ends, but other Ministers from both Coalition parties have been expressing similar views in private.

Economic discipline
However, Mr Noonan put paid to such flights of fancy with his commitment to drafting a detailed plan that will ensure that economic discipline is maintained not just until the next election but up to 2020.

He is determined that the rigour imposed by the troika since 2010 will be maintained.

“When we leave the programme we won’t have that kind of discipline within our system anymore and I want to make sure that, because of more loose arrangements, that we don’t lose impetus,” he said.

“So we want to bring an economic plan which will take us from 2014 to 2020 and be quite specific in the early years where different tasks will have to be done,” said Mr Noonan.

Interestingly the Minister said the measure had not been requested by the troika but was an initiative from himself and Minister for Public Expenditure and Reform Brendan Howlin who would bring it to Government shortly.

The Noonan/Howlin axis has been central to this Government’s success to date in meeting the troika bailout terms and the pair has clearly decided on a preemptive strike to make sure there is no slacking once the bailout ends.

Howlin is on the cusp of a hugely important achievement in getting a deal with the public sector unions on payroll savings of €1 billion over the next three years while Noonan has steered the negotiations that resulted in a significant easing of the bailout borrowing terms. To some extent what Noonan has done at this stage has simply been to state the blindingly obvious. Everybody knows that at least one more really tough budget will be required to wrestle the budget deficit down to an acceptable level and that extreme vigilance will be required to keep it at 3 per cent of gross national product (GDP) for the foreseeable future. If there is a return to a reasonable level of growth, the task will be eased to some degree but there is a real danger that growth will not be sufficient to further erode the debt as a percentage of GDP so nothing can be taken for granted.

Mad years
One way or another there can be no return to the madness of the Ahern years when unsustainable spending was allowed to spiral out of control. All of the hard work of the past five years could be set at naught in double quick time if big spending departments are allowed the kind of free hand they had in the past.

The other side of the coin is that the electorate needs to see some light at the end of the tunnel.

There is certainly an argument for putting a better spin on the need to keep a tight lid on Government spending for the rest of the decade.