Wednesday 16 October 2019

Editorial: 'In these hazardous times, FG would be wise to play it safe'

Finance Minister Paschal Donohoe. Photo: Collins
Finance Minister Paschal Donohoe. Photo: Collins
Editorial

Editorial

Budgets were designed originally as control mechanisms but if mishandled they can easily become traps, especially in times of uncertainty. So if the public is somewhat cynical about Government promises with elections in the air it is because every ounce of the cynicism has been paid for in hard experience.

As former US president Gerald Ford once said: "A government big enough to give you everything you want is a government big enough to take from you everything you have."

For such reasons the news Finance Minister Paschal Donohoe is to present a family friendly give-away Budget may well be received with a certain amount of apprehension. It is not that families do not need all the protection they can get; it is more the value of Government offers of free umbrellas - knowing that we face into financial headwinds that could reach hurricane force - is questionable. Besides, ministers generally only start talking about giving things away when they are either falling behind in the polls, or there is an election in the air.

Curiously enough, both conditions currently apply. Most of the time we will take our "give-aways" when we can get them, but these really are exceptional times.

Only a few months ago Mr Donohoe found himself on the back foot after trenchant criticism from the Government's own spending watchdog, the Fiscal Advisory Council. It warned the Government had breached post-financial crisis spending rules last year, with budget increases leaving the State running the risk "of repeating the mistakes of the past".

It was specifically concerned about an over-reliance on corporation tax and our ability to meet future commitments with so much Brexit instability, and a worsening global trade war, to contend with.

The measures Mr Donohoe is considering - mostly aimed at easing the costs of taking care of children - may bring some welcome short-term relief.

But the misgivings stem from the fact that the pledges sound uncomfortably like a troubling throwback to the pre-crash era.

The scars of incautious public spending courtesy of exceptional and unpredictable revenue windfalls, have not yet vanished.

Framing a budget at any time is fraught, attempting to do so in the face of the fallout from a no-deal crash-out amounts to a perilous leap in the dark.

To be fair to the minister, he is in an unenviable position. The cost of living is hurting families as soaring rents, a housing crisis and spiralling child-care costs bite to the bone.

He is as likely to find himself castigated for being unduly conservative as he is for being recklessly incautious.

But given the enormity of the hazards we are likely to face in coming weeks - risks that could literally make or break the economy - traditional Fine Gael values, such as less is more, ought not be lost sight of.

Irish Independent

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