Wednesday 3 June 2015

Editorial: Ministers must learn to do their jobs on budget

Published 07/06/2014 | 02:30

Minister for Health James Reilly
Minister for Health James Reilly

The news that the garda budget has been hit by an 'unexpected' shortfall of between €60m and €70m might not seem like a great calamity, given that overall funding for the force for 2014 is €1.34bn. However, to do this for the second year in a row can best be described as unfortunate. It is interesting that on Budget Day last October the then Justice Minister, Alan Shatter, announced that despite "very difficult economic decisions" he had managed to keep cutbacks at the department to just €70m.

So now, mid-way through the year, we learn that all the savings for 2014 have effectively been wiped out by over-runs in the garda budget alone. This has happened despite unpopular cutbacks in allowances, the closure of rural garda stations and a raft of measures which have gone down badly with the general public, particularly in rural Ireland where there is a feeling that vast swathes of the countryside have now been left at the mercy of marauding gangs.

Happily, this Armageddon-like scenario hasn't come to pass, although there have been particularly harrowing incidents of families and business being targeted by urban-based gangs preying on 'easy targets.' However, the reality is that garda resources are badly stretched, not only in local policing but also in important areas like white-collar crime, which has provoked a leading barrister to declare that "we live in a veritable golden age for hucksters and fraudsters of all sorts."

The new Justice Minister, Frances Fitzgerald, is now faced with a major shortfall in garda funding, which may necessitate a supplementary budget. It is hardly an auspicious start and must also present a worrying vista for various others ministers who will find themselves either redeployed or promoted in the much talked-of reshuffle. Given the over-runs in the Departments of Health and Justice, they can hardly be reassured going into their new jobs.

The bulk of the public finances goes on salaries and allowances. Is it too much to ask that government departments calculate this spending properly?

During the boom years, there was a history of billions in extra cash appearing in the government coffers, now there is a history of vast amounts of savings failing to materialise.

It is unsettling that this happens with such regularity and certainly is not something that would be tolerated year in year out in the private sector.

 

Ratings confidence boost has been hard earned

Rating agencies are organisations we all love to hate. After all, these are the trusted financial arbitrators who labelled sub-prime mortgages as gold instead of the junk they were. They kick you when you're down and then praise you as you struggle to your feet again.

So the fact that one of the 'big three' agencies, in this case Standard and Poor's, has upgraded Ireland's long-term sovereign debt from BBB+ to A- means that the rest of the world can now rest assured that we will pay our way. This may be scant comfort to the 'squeezed middle' or families and businesses on the floor after years of austerity. But despite the carping, it is good news for Ireland.

At one time, Ireland's debt was rated 'junk' by another ratings agency, which is the reason we were unable to borrow on the international markets. So what good will this new rating do us? The obvious answer is that it will be cheaper to borrow money. However, the fact that Standard & Poor's believes Ireland's growth will be 2.7pc for the next two years, well ahead of the rest of the EU economies, is a boost to the country and the Government and will go a long way towards restoring confidence in Ireland among major investors and financiers.

In economic terms, confidence is vitally important, so having laboured under all those new taxes and charges, we might as well accept this pat on the back with as much grace as we can muster.

Irish Independent

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