Tuesday 15 October 2019

Charlie McCreevy has convinced himself everything was fine when he left Department of Finance

Pearse Doherty questions Charlie McCreevy at the inquiry yesterday
Pearse Doherty questions Charlie McCreevy at the inquiry yesterday

Ailish O'Hora

There was a certain symmetry about the timing of the appearance of former finance minister Charlie McCreevy at the Banking Inquiry this week given developments further south in Greece.

As if in a nod to Greek events, Mr McCreevy's hubris was evident from early on at the inquiry.

He was finance minister from 1997 to 2004 in joint Fianna Fáil/Progressive Democrat governments and many of his tax incentives and property relief policies have been widely accepted as ones that fuelled the boom, bubble and subsequent bust.

But that's not the way it happened at all, he told the Banking Inquiry.

Firstly, there was no property bubble - well not one to speak of anyway.

Or rather one that he could speak of. He refused to answer questions from Sinn Féin's Pearse Doherty about whether he believed there had been a property bubble.

After a 17-minute suspension he did a u-turn. He said that given that house prices had increased from 2003 to 2007 by an extraordinary degree that it probably was a bubble.

But at that stage of the questioning, the tone had well and truly been set.

Mr McCreevy said that not alone was he very proud of the controversial 2004 decentralisation programme (which arguably fuelled the property boom to parts of the country that are now blighted with ghost estates) but he was sorry there wasn't more.

"I see many great offices around the country and it's rejuvenating many areas, I'm very sad it wasn't completed," he said.

In fact, the former European Commissioner was on a roll at that stage, though the best was yet to come.

"We were most responsible Government in history of the State," he declared, without a hint of irony.

And although he acknowledged that there were warnings from the likes of the Central Bank and Europe during his tenure, he contended that the economy and the public finances were in an "exceptionally healthy state" when he finished as Minister for Finance in 2004.

When asked about why he failed to remove property development incentives in that last 2004 budget despite promising to do so earlier, he simply said that he had changed his mind.

Notwithstanding some of his innovative moves, such as the National Pension Reserve Fund and the decision to cut Capital Gains Tax from 40pc to 20pc, Mr McCreevy will indeed be remembered for controversial policies.

Those that jump out include the countless property incentives including the extension of the Section 23 tax allowances in the late 1990s, decentralisation in 2004 and the introduction of SSIAs - the special saving incentive schemes, which really ended up being special spending schemes when you think about it.

And Mr McCreevy denied that the SSIAs were a way to "buy" an election.

We don't face another election until next year but that's something the Greek people may have to contemplate much sooner.

In Greek mythology, people were punished if the gods didn't like their hubris.

Hopefully for us, we have the worst of the recession behind us, but the poor Greeks are staring into the abyss.

Irish Independent

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