Monday 26 February 2018

Kevin Doyle: The end of boom and bust era is a pledge no politician can deliver on

Finance Minister Michael Noonan
Finance Minister Michael Noonan
Kevin Doyle

Kevin Doyle

Finance Minister Michael Noonan must have been a happy man when he woke up to mostly positive front pages yesterday.

After four years where he was painted as 'Bad Santa', 'The Christmas Grinch' and some sort of 'Halloween horror' he was winning plaudits for a family budget that gave everybody the first boost to their income since the Celtic Tiger days.

But it's likely his mood changed when he turned on the radio and heard the head of the Fiscal Advisory Council John McHale (inset) suggest that the Government had lost the run of itself.

It was all too good to be true - and the Celtic Phoenix was flying back towards the ashes, the NUIG professor suggested.

"We did anticipate that there would be overruns in Health, but we didn't see that other spending coming," he said in reference to the supplementary budget that the Coalition has used to fund good news like the Christmas bonus.

As the day progressed, it emerged that the watchdog hadn't been given up-to-date figures. Mr Noonan and his Labour colleague Brendan Howlin had played within the rules, albeit with a hint of play-acting while the referee's back was turned.

But while Mr McHale's sums might have been based on old information, he has given us some pause for thought.

We've been here before. We gladly took the cash during the 'Bertienomics' era and asked very few questions, apart from when the next instalment was due.

Mr Noonan told us in his Budget speech on Tuesday that this Government "has consigned to the history books the days of boom and bust, and the attitude of 'If I have it, I'll spend it'."

The only problem is that he doesn't actually have the €1.5bn handed out this week.

Ireland's massive debt is still growing. The money used to slash the hated USC, give the pensioners an extra cup of coffee a week and make childcare something more akin to affordable, isn't ours. It's borrowed.

Mr Noonan said all the measures would "keep the recovery going" but many economists, including Mr McHale, have argued that we should pay off some of our debt rather than add to it.

So that's the choice that faces us, the voters, as we prepare for an election.

Do we want the politicians to come up with promises such as the abolition of USC? Or do we want them to tell us that the world is an uncertain place and that as a small country relying heavily on foreign direct investment it's often not how hard we work at home that actually counts in the real scheme of things?

Mr Noonan said that he was offering us "certainty about the future. No booms, no busts". But can he really promise us that?

We have, as the Taoiseach said while announcing 300 new jobs yesterday, come through "a torrid time".

Not everybody partied during the boom but at the same time nobody shouted stop either. Perhaps people think it is only right that as the economy is now on an upward keel the 'squeezed middle' should be among the first to feel the benefits.

But be wary when Enda Kenny tells us that he has ended the "boom and bust approach of previous governments that put our economy at risk for electoral advantage".

The Taoiseach can't say that for certain because when an electorate starved of good news for so long gets a whiff of it, their hunger might only grow - and will there be anybody to shout stop this time?

Irish Independent

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