God loves a trier. So there must be a special place in heaven reserved for the members of the Irish Fiscal Advisory Council who made another spirited attempt this week to nudge the Government towards a more prudent fiscal path. It looks like meeting with the same level of success as all the others.
On Wednesday, the council’s chair Seamus Coffey addressed the Oireachtas budgetary oversight committee on the subject of the Government’s medium-term fiscal strategy, published before Christmas.
Spending plans were accelerating, Coffey warned, leaving Ireland more, not less, vulnerable. Only one in seven euro of corporation tax revenue will be saved this year.
This is Coffey’s second term as chairman of the council, so he presumably knows the score at this stage. He and his colleagues have laboured long in the vineyard of fiscal prudence, without ever producing a bounteous harvest of budgetary caution.
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The council was established back in 2011 when the country was reeling from the financial crisis and the age of austerity that followed. At that time, there was a desire for rules and mechanisms to avoid the budgetary mistakes which, while they did not cause the financial crisis, made it much worse here than elsewhere. Specifically, those mistakes included building up huge recurring spending commitments on the back of transient and unreliable tax revenues.
One young Government backbencher put it well during the Dáil debate on the legislation:
“To bring the issue down to brass tacks, the passage of this Bill will mark the maturing of our nation and, I hope, of our politics. What it means is that the days of auction politics are truly over.
“In the past, every time we had a general election, there was a little extra children’s allowance or a bump up in the pension or whatever, regardless of whether these were sought or assessed or whether analysis had been done as to whether the country could afford it. Those days must now be over.”
And the name of this far-sighted young Lochinvar? Um, Simon Harris.
Ireland is a vastly wealthier and more economically secure country than anyone might have dreamt a decade and a half ago, when unemployment was rampant, emigration common and deprivation rocketing. The economy has recovered spectacularly since then, wealth has grown and the exchequer is in rude good health, the envy of Europe. Public spending has more than doubled since 2012 – that’s spending on public works, public services, pensions and welfare.
These are good things. Public spending buys public goods. But as the Irish Fiscal Advisory Council has repeatedly pointed out, the spending increases we have awarded ourselves in recent years, and which are planned for the coming years, are paid for by revenues that are uncertain – and may be entirely precarious.
Why have we put ourselves in this position? These decisions are the responsibility of the Government, with whom the buck starts and stops. But the Government exists in a political culture that is entirely unreceptive to the sort of warnings about long-term danger that have become the Cassandra-like chorus from the Irish Fiscal Advisory Council.
There are practically never any calls in the Dáil for the Government to spend less: only to spend more. Almost the entirety of our political debate revolves around demanding that the Government spend more money.
On and on it goes, every day, every week: more spending is the only solution to every problem facing the country. Never reform; never a change in priorities; never getting more from existing spending. Just more, more, more.
[ Government spending is rising faster than appropriate levels, says IfacOpens in new window ]
A random perusal of my inbox over a day and a half this week contained demands from Opposition parties (and in some cases from Government deputies) for more public money for: youth mental health services, emergency payments for disabled people, flood compensation, flood defences, extra payments for local authority workers who have to work in bad weather, cutting waiting lists, more Irish language classes, better pensions for uniformed services and for Katie Taylor to have her last fight in Croke Park.
How many times have you heard or seen a news programme that follows this template: a story about failures in public services, supported by testimony from people of how they have been failed, and experts that point out the need for further State investment; Opposition TDs and interest groups amplifying the call for further spending; followed by a Minister insisting that the Government has actually spent lots but is committed to spending more.
Why does nobody ever say: Woah! Hold on! There are financial constraints here. We can’t have everything we want when we want it.
No: the solution is always: spend more public money.
I understand the politics of all this. The Opposition is acting entirely rationally in giving voice to public demands, and the Government is scrambling to meet those demands because it can – for now anyway – afford it.
But the warnings of the council and of scores of economists are that the revenues that support all this spending are uncertain, and that even if they are sustained, there are significant predictable costs due to ageing and climate change and infrastructure needs coming down the line.
[ Coalition ‘budgeting like there’s no tomorrow’, warns fiscal watchdogOpens in new window ]
To reiterate a point repeatedly made here: if there is a shock to the public finances, the people hurt the most will be the most vulnerable, because they rely on the State most. The parties who purport to speak for their interests should be the ones most concerned at the precariousness of our fiscal and budgetary model. The opposite is the case.
But the responsibility for running stable, sustainable and resilient public finances is the Government’s.
Yes, it is important to understand the pressures on politicians. Yes, voters clamour for more spending. Yes, our political culture seems irretrievably short-termist. But ultimately, if it all goes pear-shaped, “they made me do it” is not a defence to anything.
