Worn-out system going strong

The budgetary processes that failed still remain intact, writes Gerard Howlin

OUR Government is perplexed and annoyed with us; we have let them down again. About 70% of the electorate could not even be depended upon to vote yes to a proposition to safeguard the welfare of vulnerable children.

Our leading screen star Gabriel Byrne is giving interviews in New York bemoaning an administration with no cultural vision beyond gathering in emigrants to put their spare change in our greasy till. Sheep-dipping in Bracken was too good for that ingrate.

A turning point has been reached between the Government and the people. The honeymoon is over. But public anger with the Government may be cold comfort for a still unloved Opposition. Just because the voters are beating them up now doesn’t mean they won’t elect the incumbents again. It’s a dysfunctional relationship between people and politicians. A constitutional referendum to protect politicians from public abuse might have been more appropriate, if less successful. It would certainly have generated a higher turnout.

For now, our dysfunction trundles on. We are three weeks away from the budget. In a country used to alarmingly inaccurate economic forecasting, predictions that it will be the hardest in decades are probably true. The media is full of predictions of what may happen. One recurring theme, first advanced by Brian Hayes, the junior finance minister, is that it is time to throw granny off the bus.

There are too many sleek pensioners gadding around on buses for nothing and then trotting off home to watch the telly and sit on the phone gratis.

That is not to mention the fat cat pensioners, from ministers to bankers and including, by the way, the upper echelons of the public service, who have accumulated massive pension pots.

Times may have changed for the worse, but the budgetary processes that got us into this mess are largely intact. To its credit, the Government is succeeding in running the country on less. It is also continuing to run the same, clapped-out, and failed system of inadequate and belated oversight.

Our clapped-out, failed system runs like this: The Government — in our case really the troika — decide on overall spending and borrowing levels for next year. The bit the Government actually decides on is the balance between spending and taxes that will achieve that outcome, predicated on predicted levels of growth. Departments are given envelopes out of which they have to manage. The broad brush strokes and some of the details are announced in Michael Noonan’s speech on budget day. The most of the iceberg that is below the water is contained in the Estimates of Public Expenditure, which is a phonebook-sized publication. Granny’s bus pass, if she still has one, and the time she can spend chatting on the phone for free, will be wedged in there. A few months later, usually around March, revised estimates are published. Separately, in the new year, a finance bill is published and the details of taxation are legislated for. It is only after the revised estimates are published that the Oireachtas policy committees responsible for oversight stir themselves to scrutinise them.

In 2012, the Oireachtas policy committees responsible for the three largest areas of spending — social protection, health, and education — did not scrutinise the estimates for the departments they are charged with overseeing until May 22, May 17, and Apr 24 respectively. Over one third of the year was gone before these committees interrogated the policies or the sums underpinning public spending. Given that spending programmes were irreversible by then, it was belated and pointless window- dressing. The record of those meetings shows up a lamentable lack of forensic questioning. There was little or no effective investigation of whether policy outcomes are being delivered for the enormous sums spent.

Last Friday in the Dáil, Finance Minister Michael Noonan was responding to the Tax Transparency Bill introduced by Fine Gael TD Eoghan Murphy. This legislation, if passed, would give taxpayers a transparent overview of how much of their taxes are going to different areas of government. The minister agreed that the bill could pass second stage and go to committee. Whether it will ever pass into law remains to be seen.

Mr Noonan pointed out his colleague Brendan Howlin had published a comprehensive expenditure report which sets out departmental spending for every minister over a three-year period, 2012-2014.

Mr Howlin had, Mr Noonan reminded the Dáil, also announced the introduction of a whole-of-year budgeting process. This was to allow rolling parliamentary oversight beginning each autumn for estimates in the following year.

This is laudable. Unfortunately, the reality has been farcical. When the relevant committee met with Education Minister Ruairi Quinn and Social Protection Minister Joan Burton on Sept 19 and Sept 26 respectively, there were no costed policy options produced for the savings to be delivered. The discussions were on a “suggestion box” basis. That is neither effective oversight nor real participation. The pity is that, over the next two budgets, about €1bn will be cut from the social welfare budget. The policy options involved deserve discussion and scrutiny. Granny can understand the discussion and her elected representatives need to be involved.

A whole-of-year budgeting process should be based on an obligation by ministers to produce costings for the range of policy choices they have, and the costings do exist. Our system is predicated on the belief sunlight is its greatest danger, not a disinfectant. If there must be criticism of ministers for operating a system that protects them from serious interrogation, responsibility also rests with the committees and their chairs.

Joanna Tuffy TD chairs the committee responsible for social protection and education. Jerry Buttimer chairs the health committee. Neither of these committees distinguished themselves in 2012. It remains to be seen if the welcome concept of interrogating ministers in advance about their plans for spending public money develops into a worthwhile process. It certainly hasn’t yet.

* Gerard Howlin is a public affairs consultant, and was a government adviser from 1997 to 2007

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