Thursday 29 September 2016

Stark warning by our economic watchdog

Published 26/11/2015 | 02:30

The head of the State's Budget watchdog has compared the Government's handling of our finances this year to the worst period before the bust (Stock image)
The head of the State's Budget watchdog has compared the Government's handling of our finances this year to the worst period before the bust (Stock image)

An absence of sense in the management of an economy is not recommended, and when coupled with an absence of prudence it could be ruinous.

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The analysis of the Fiscal Advisory Council on the approach taken by the Coalition in its marshalling of the national purse is cutting.

The head of the State's Budget watchdog has compared the Government's handling of our finances this year to the worst period before the bust.

Professor John McHale, who heads up the council set up to keep a closer eye on the economy after the crash, baldly states that ministers "deviated from prudent economic and budget management" by signing off on €1.5bn more in spending than was originally included in Budget 2015.

While the blowout may not breach European Budget rules, according to Prof McHale it was "very much against the spirit of the rules". This Government came to power after the worst catastrophe our economy has ever endured. It promised that the cycle of boom and bust would be broken and there would be no return to destructive, spendthrift ways.

Yet Prof McHale clearly equates the extra spending to the boom-era budget practices that caused such hardship. Public Sector Reform Minister Brendan Howlin has stoutly defended the Government on the grounds that using some of the increased tax revenues to meet the demands was appropriate.

But the council was brought into being to sound the alarm at the first sign of a warning light in the economic cockpit.

We sacrificed far too much for the suspension of reason in the past. This time we can't say we haven't been warned.

Irish Independent

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