Friday 28 October 2016

Editorial: Uncertainty over Budget plans is damaging recovery

Published 17/06/2014 | 02:30

Minister for Finance Michael Noonan and Brendan Howlin Minister for Expenditure and Public Reform. Frank McGrath
Minister for Finance Michael Noonan and Brendan Howlin Minister for Expenditure and Public Reform. Frank McGrath

The danger in raising expectations is that if you don't fulfil them you leave the people who believed your promises very angry. The Labour Party can vouch for that and its Fine Gael partners in government are in danger of treading this dangerous path again by raising expectations that there will be comfort for ordinary taxpayers in the October Budget.

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Not so says the Fiscal Advisory Council, a body established by the Government to assess how it is dealing with budgetary targets. Yesterday it backed a European Commission report saying that failing to take over €2bn out of the economy in Budget 2014 would jeopardise Ireland's chances of meeting EU deficit targets and risk a seriously weighty fine from Europe.

The "will we, won't we" uncertainty is damaging to public confidence and should not be allowed to continue, drip feeding public expectations for the coming four months. The Government must now be aware that it is this type of mixed message that led to a serious backlash at the local and European elections. Of course nobody wants another austerity budget. Of course it is important to restore consumer confidence so that people will open the purse strings again. Of course it is vital that the "real economy" gets a boost that will feed into further falls in unemployment and a reduction in the enormous welfare bill for the State. These are all aspirations shared by the hard-pressed coping classes. But real political leadership is needed to convince people that there is a plan, that cutting waste in the public service is a serious government priority, that the various taxes and charges are at an end and that just because the troika has gone the Government won't return to its old profligate ways.

You wonder if we spend so much time and energy revisiting the past that we ignore the dangers and pitfalls that lie in the future. One important element in yesterday's report from the Fiscal Advisory Council was a recommendation that the Government's insistence on a balanced budget by 2018 may well be too ambitious. Pushing this deadline back a year or two at a time of improving economic news may just give Michael Noonan the wriggle-room he needs to give the electorate some respite while keeping the European Commission on side.

Vital for food sector that Russia trade restored

The decision of the Russian authorities to restrict imports from 12 Irish food processors and impose a blanket ban on the sale of beef offal from Ireland has worrying implication for the agriculture sector and the food industry. It certainly sends out a warning signal to the industry, beyond that €6.6m in exports is at stake as a result of this surprising move.

The Russians took the decision following a recent veterinary inspection of a number of Irish food processing facilities. As a result, 12 beef, dairy and fish processing plants have been partly restricted, with a total ban being imposed on exports of beef offal from Ireland to Russia from June 23. The Russian authorities have yet to explain fully the reasons for this ban, as the report has not yet been published. But as it will affect cattle prices, farming organisations are now pressing the Department of Agriculture and the minister, Simon Coveney, for a full report from Russia so that remedial measures can be taken to restore the trade and, more importantly, the good name of Irish food exports.

Agri-industry sources are convinced the Russian action is not connected to the imposition of targeted sanctions on Russia, supported by Ireland, as a result of President Vladimir Putin's intervention in the Crimea. We sell more than €232m of food and drink to Russia. It is important that this is fully restored as soon as possible but, more importantly, it is vital that there is no knock-on effect from this decision which would undermine Ireland's multi-billion euro food export industry.

Irish Independent

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