Wednesday 18 September 2019

Editorial: 'If crash happens, Donohoe can't say he wasn't warned'

Finance Minister Paschal Donohoe. Photo: Collins Dublin, Gareth Chaney
Finance Minister Paschal Donohoe. Photo: Collins Dublin, Gareth Chaney


'Prudent Paschal' doesn't quite cut it for street cred, but it's a nickname the Finance Minister carries with pride. Where once we enjoyed seeing our money men splash the cash, most families now live in fear of the next downturn.

Fine Gael has repeatedly told us this Government will end the cycle of boom and bust - but we all know another crash is inevitable.

In fact, an independent body set up by the Government to keep tabs on these things says we're closer to the next economic disaster than the last one.

The Irish Fiscal Advisory Council's (IFAC) report makes grim reading for Paschal Donohoe and Taoiseach Leo Varadkar. It exposes what ordinary people without any economic qualifications are feeling in their bones.

The growth rates and the corporation tax receipts are too good. The taxi queues in Dublin on a Saturday night can't be sustainable. The surge in demand for ski holidays won't last.

But until now we at least had the reassuring musings of Prudent Paschal, who told us on Budget day that he was developing the "underlying strength and resilience of our economy".

He committed to enhancing our growth potential and safeguarding against Brexit while simultaneously improving our quality of life. Since then, the minister has gone on to promise five years of tax cuts if Fine Gael is back in power after the next election.

Now IFAC has moved in to spoil the 'prudence party'. It is claiming we can't have it all and there are "echoes of policy mistakes of the past".

Naturally, we are drawn to believe the experts rather than the politicians.

Yesterday this was put to Mr Donohoe, who was quick to point out not all the experts agree. He noted that the European Commission has rated Ireland as "fully compliant" with the provisions on debt and deficit set by the Growth and Stability Pact. The EU thinks we're now on a par with countries such as Germany and Finland.

Mr Donohoe says that in 2019 Ireland will balance its books for the first time since the Celtic Tiger.

"Then we're going to move into having sustainable surpluses," he argues, adding that increased spending is being matched by tax hikes in other areas.

And he validly questions what response society would offer if the Government hadn't committed more investment to housing and health for next year.

But while few predicted the scale of the last economic disaster, this time we have been forewarned and therefore must be forearmed.

Irish Independent

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