Tuesday 16 January 2018

Zombie Budget going through the motions - devoid of ideas or ambition

Michael Noonan and Paschal Donohoe pose for the annual snap
Michael Noonan and Paschal Donohoe pose for the annual snap

Donal O’Donovan

We've had zombie banks, zombie hotels and now a Zombie Budget - the body is still moving, but the soul is gone.

Michael Noonan in opposition would have driven a coach and four through Budget 2017. What he and Paschal Donohoe presented yesterday was an exercise in administrative drift, shifting resources from pillar to post without ever outlining, let alone committing to, a direction of travel.

Despite the ministers' repeated claims to the contrary, this Budget is too loose to be truly prudent - if anything, an extra €500m for the health service, without any compensating demand to rein in the HSE's apparently unlimited ability to burn through cash, actually borders on the feckless.

Any incentive to rein in health overspending is now dead in the water. We got the same thing with the money thrown at first-time home buyers.

The cash being handed to house-buyers will be quickly recouped by the State in VAT paid on their new homes, so it's cheap. It will help first-time buyers put together a deposit, and basically get them around the Central Bank rules, so it is popular.

But it does nothing to tackle the fact that construction costs - land, tax and labour - are too high. So it's pointless. It won't break the bank, but it won't fix the problem.

The three-year scheme is a holding exercise. But till what? The same question could be asked of the entire Budget.

Ministers will argue that tight finances and a looming Brexit crisis means they don't have the cash for grand gestures.

The finances are tight, but that's more, not less, reason for bold and ambitious thinking.

Two of the outstanding initiatives introduced by the last government - the Wild Atlantic Way and the Action Plan For Jobs - worked fantastically by making the best use of existing resources. Tellingly, they came in when budgets were so tight there was no alternative.

Budget 2017 is devoid of direction. Horse trading at Cabinet means ministers each got enough to keep the 'New Politics' show on the road for another week, maybe even a year.

However, beyond Cabinet the crumbs are so fine that no-one else is going to feel grateful in the slightest.

So why not take the opportunity for a do-nothing Budget?

Michael Noonan could have made a virtue of necessity and taken the genuinely bold gesture of cancelling the charade.

Budget 2017 is all about eking out €1.3bn of additional spending and tax reliefs - flaked thinly across special interests. It would have been far wiser to forego those increases and hold the State's spending and tax-raising targets steady for an extra year.

Left to run on autopilot, the State finances would almost certainly have come into balance next year - 12 months 'early', but hardly too soon. Balanced budgets shouldn't be a fetish, but with five years of growth behind us and a potential Brexit crisis in front of us, it's hard to think of a better time to catch our fiscal breath.

Ditching the fixation on the €1.3bn of change in the Budget would also mean more time interrogating the €56bn we were committed to spending before any minister stood up yesterday.

That's by far the bulk of the cash the State will spend next year and it got barely a look-in during eight hours of Dáil time yesterday.

In the movies, zombies are the undead, staggering on in a shambolic simulation of their previous existence.

It's not supposed to happen in real life.

Irish Independent

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