independent

Sunday 20 April 2014

FF-PD policy to blame for economic ills, claims report

A new report blames the 2002 Bertie Ahern Fianna Fail/Progressive Democrat government for causing most of the damage to the Irish economy. Photo: Getty Images

A new report blames the 2002 Bertie Ahern Fianna Fail/Progressive Democrat government for causing most of the damage to the Irish economy and criticises the Department of Finance for failing to stop wide-ranging tax breaks that fuelled the property boom.

The review of the Department of Finance by Canadian expert Rob Wright singles out the policies in those parties' 2002 election manifestos as contributing significantly to the 2008 property market crash, the Irish Independent has learned.

Mr Wright also criticises Department of Finance officials for not carrying out any economic or budgetary analysis of the proposed tax cuts and the huge public spending programme the FF/PD government was planning.

He blames the impact of the social partnership process as another key reason for Ireland's economic woes, highlighting high public sector wages compared with the private sector.

He questions the methods available to Department of Finance officials to raise these kind of concerns with the then minister, Charlie McCreevy, and his successors, Taoiseach Brian Cowen and Finance Minister, Brian Lenihan.

The report, which is due to be published next week, doesn't go as far as to say that the Department should have been more prudent in this regard, but recommends that more specialist accountants and economists should be hired to work in Finance.

Mr Wright was commissioned to review the Department's performance over the past 10 years and its handling of the financial crisis.

As well as calling for an adequate mix of skills to provide the best advice for future Finance Ministers, the report says the Department's Public Services Management Division should become a separate unit either within the Department or outside it. The unit should report to the minister for state rather than to the Finance Minister.

The report also calls for the establishment of a task force to examine public sector reform that should include individuals from the private sector as well as civil servants.

The Wright report is one of two ordered by Mr Lenihan that are still to be published. Economist Colm McCarthy has completed a review of the €10bn worth of state assets to identify which could be sold or reorganised to raise much-needed cash for the Government. It is also due to be published shortly.

Mr Wright worked in the public service in Canada for 35 years, and for 20 of those he was a secretary general in the finance ministry. His group also included Hans Borstlap, who held the position of director general at the Dutch ministry for social affairs and employment and was a member of the Netherlands central bank advisory board.

They were joined by Department of Agriculture and Food general secretary John Malone, and economist and one-time finance official Pat McArdle acted as an adviser.

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