Prudence is sacrificed for cute-hoor politics
Published 14/10/2015 | 02:30
'Don't leave anything behind you on the pitch, before you return to this dressing room. No regrets." These are usually the last words of a top motivational coach. Similarly, only a fool would expect Coalition ministers to leave spare cash in the Exchequer coffers as they maximise their prospects in the great electoral quest. Budget 2016 is an election giveaway, pure and simple; overshadowed by something cooked up a little earlier.
This Budget was designed for door-to-door sales. Just like old industrial-branch, pension-and-life-assurance reps calling around with a patter of potential benefits, inducements and incentives. It was crafted by creative marketers, appealing to electorate segments - pensioners, workers, farmers, carers, self-employed, parents and families. All will have been rigorously stress-tested with qualitative research from focus groups.
So where's the big banana skin? It's devoid of nasty or insidious, mean cuts. If there is an Achilles heel, it is to be found in the flawed fiscal credibility as a consequence of manoeuvrings at the tail-end of 2015. Despite all the responsibility rhetoric set out in the Spring Statement, a total expansionary envelope of €1.5bn magically became €3bn.
So €1.5bn of supplementary estimates were added prior to Budget Day, elevating the baseline spending for yesterday. EU Commission rules forbid this sleight of the hand from next January. Cynical chicanery converted a bonanza windfall of corporation tax receipts into departmental goodies.
This December, elderly couples will get a Christmas bonus of €330 - suddenly increased from 25pc to 75pc. What's presented as a €200m increase in health spending in 2016 is actually €800m when taken over 15 months.
By raising 2015 expenditure out-turns, they've camouflaged an overall increased rate of spending that's outlawed for a eurozone state with a sovereign debt ratio beyond 60pc.
EU Commission supervisors will spot this crass political stroke. Under future rules, such indiscipline is subject to hefty EU fines. In December, a public rebuke from Brussels can be anticipated for clear breach of annualised budgetary procedures. October's gambit will come back to haunt this administration. Four years of prudence has been sacrificed at the altar of canny cute-hoor politics.