Wednesday 21 March 2018

We need a dour miser to run the nation's finances

The next minister needs to tell us the truth -- that things are going to get a lot worse, says Kevin Rafter

If the position of Finance Minister was filled by open public competition, the recruitment advert would be very specific about the skills required by the successful candidate. The text of the advert would read something along the lines of: "Applicants must be prepared to take tough decisions and must take perverse pleasure in being unpopular. An ability to do dour and grumpy would be an asset."

The most significant decision Enda Kenny will make on Wednesday is to select the next Finance Minister. It is the most important job in government. Over the last few days, the negotiating teams from Fine Gael and Labour have had an opportunity to read the economic small print.

The inheritance from the outgoing Fianna Fail Government is bleak. Money from the IMF and the ECB is keeping the country afloat.

And there are no easy choices, irrespective of who emerges from the ministerial power play -- Michael Noonan on the Fine Gael side or Joan Burton, Pat Rabbitte or perhaps even Eamon Gilmore from the Labour ranks.

In terms of cabinet experience, Noonan may be the most obvious choice. But any of this quartet will have to adopt the same public persona. The next Finance Minster must clearly signal that there's no room for Mr or Mrs Nice if the country is to be dragged out of this economic mess. Don't tell us that the worst is over or that we've turned a corner. We know it's bad and that it will most likely get worse before genuine green shoots appear.

Ray MacSharry is the role model. He became 'Mac the Knife' and the poster boy for fiscal rectitude when Ireland was last an economic basket case in the late 1980s. The Fianna Fail politician was booed and jeered in public. His home was picketed. But to all and sundry, he was dour, dogged and single-minded in pursuit of his policy.

Like MacSharry, the next Finance Minister should be feared, someone who is approached with caution. What would MacSharry have done if senior bank executives had made a fool of him in paying themselves bonuses when they'd been told not to do so? The Sligo man would have slapped them around his office with a verbal bollocking.

The budget speech from 31 March, 1987, should be required reading for the new minister. MacSharry laid it on the line.

"There is no room at all for soft options. On the contrary, it is in all our interests that the Government follows a very strict discipline. There can be no concessions to interest groups and all sections of the community will have to bear some of the burden."

The job of leading the opposition response to MacSharry back in 1987 fell to the Fine Gael finance spokesperson -- one Michael Noonan. Reading Noonan's speech last week offered an insight into how the Limerick man might approach the current task as he warned Fianna Fail that there could be no slippage from the policy of cutbacks.

"They are marked men and we will mark them man for man and woman for woman. If they depart from those targets, we will have them walking and there is only one destination."

In another fascinating historical coincidence, one of those who led the public protests against the MacSharry cutbacks is another potential Finance Minister in 2011.

As thousands took to the streets after the 1987 budget, the media reported that there was vigorous applause when Pat Rabbitte -- then a leading trade unionist -- warned of "widespread industrial action throughout the country".

The actions of the incoming Government will make MacSharry look like a member of the St Vincent de Paul.

During the election, Fianna Fail claimed that it had done the "heavy lifting" in terms of closing the gap between national income and expenditure and moving the country closer to living within our means. But the coming budgets will be even more difficult to frame against low growth, higher interest rates and the continuing demands of the banking system.

On radio last Friday, the former Labour minister Barry Desmond argued that the burden of the Finance job was now far too great for one individual. The challenges are onerous -- managing the national finances, sorting out the banks and reforming the public service.

The idea of splitting the Department of Finance into a number of different divisions has been discussed by Labour and Fine Gael.

But the danger in splitting the role is that we end up with a good-cop-bad-cop strategy from Merrion Street. Only one minister can control the purse strings and only one minister can revel in being a bastard in the national interest.

Sunday Independent

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