Numbers don’t add up as cuts set to hurt weakest and vulnerable
By Fergus Finlay
A COMPLETE and total poverty of imagination.
That’s what this Government is suffering from. The more you look at the details of the budget, the more you realise it’s a bean-counting exercise. And pretty pathetic beans they are.
You could pick out a lot of individual measure in the budget as examples. Let’s just look at three. And I’m picking them because they are three things that will contribute, more than almost any other, to an increase in social injustice in Ireland. None of them are necessary. None of them will solve our fiscal problem.
Let’s just summarise them first, and then look at how much has been saved. The cut in child benefit will drive some children into hunger. It will make them sick, because of the conditions in which some of them live. The cut in the respite grant will drive some sick, infirm or disabled people into institutional care. It will drive their families — their carers — to the end of their capacity and beyond. The cut in back to school clothing and footwear allowances will drive some young people into gangs, anti-social behaviour and crime. That’s because that cut will lead to more kids starting school late, or behind, and will in many cases result in early school leaving.
And do you know how much will be saved by these three cuts? For every €10 of public spending, these three cuts between them will save 3 cent. That’s right, 3 cent in every €10.
The total saving estimated by the Government from these three miserable cuts is €179m in a full year. They expect to save €136m from the cut to child benefit, €26m from reducing the respite care grant, and €17m by slashing the back to school allowances. That’s €179m out of a committed total of public spending of €51.1bn.
€179m is also a big sum, of course. But it’s a third of one per cent of the total. That’s how much has been saved.
Assuming, of course, that there are no economic or fiscal consequences to the cuts. It can cost €100,000 a year to keep a child in secure care. And the link between secure care and inadequate supports for early education is profound. The money saved in the respite care grant would be completely eaten up if a hundred or so more people had to be admitted to high dependency institutional care.
But what turns these cuts into something even deeper — what makes them look as bizarre as they are mean spirited — is some of the other numbers in the budget. Here’s Minister Noonan on Budget Day, for instance, talking about pensions: “I want to clarify the Government’s policy on a number of important issues. First, tax relief on pension contributions will only serve to subsidise pension schemes that deliver income of up to €60,000 per annum. This will take effect from Jan 1, 2014. Second, tax relief on pension contributions will continue at the marginal rate of tax.”
I’ve read reports all over the place confirming that this measure — ending a subsidy on the pension pots of the much better-off — will generate savings of something around €250m. But they’re getting a full year’s notice! How can it be possible to take away a respite care grant overnight, when you have to give a year’s notice of a cut that will affect the richest people in Ireland? There are aspects of all this arithmetic that would be funny, if the consequences weren’t so devastating.
The Department of Arts, Heritage, and the Gaeltacht, for instance, is expected to make savings of around €10m out of a total budget of €260m next year. That’s roughly the same proportion — around a third of a percent of its budget.
But most of that, according to Minister Howlin’s Public Expenditure Report published on Budget Day, is going to come from “more efficient working, shared services, prioritisation of public and front of house services, deferral of projects, curtailment of some schemes, staffing economies and administrative costs reductions”. That’s serious gobbledegook even by Sir Humphrey’s standards! And the Department of Agriculture, Food and the Marine is being challenged to come up with savings of around €90m in a budget that’s well over a billion. But two thirds of the savings — €66m — will come, according to Minister Howlin, from closing schemes to new entrants! The more you look at it, the harder it is to escape the conclusion that some ministers seem to have got away with quite a bit of jiggery-pokery in their figures, while others got trapped into very specific cuts that do immense damage, for very little savings in return.
And that impression is strengthened even further when you look at the amount the bean counters expect to save next year in ways they can’t even identify. The Expenditure Report, for instance, has a figure of €220m in “unallocated savings” that will be necessary to balance the books across the public sector next year (and a further €830m in 2014).
Against that background, the Government is hanging tough. No u-turns, say the Taoiseach and the Tánaiste. Ministers are sent on radio and television to say they understand, they feel the pain. But there can be no change.
Meanwhile the backbenches in both parties rumble. The commentators talk about Labour losing. I don’t know whether Labour lost or not — I’ve been there before, and I suspect there’s every possibility that Labour could claim to have prevented worse things from happening.
BUT it doesn’t matter. We’ve all lost. If you know someone, anyone, who is caring on a full-time basis for a person with serious behavioural problems, or suffering from massive brain injury, you know how much we’ve lost because we have decided they have to bear our burdens. Cuts like these make us uncivilised.
It’s when you look at the figures that you realise how stupid and unnecessary these cuts are. Taken together, as I said, they amount to a third of one percent of the Government’s spending totals. If you take the carers’ cut in isolation, it’s about a fifteenth of a percent. The saving is so small it’s virtually impossible to calculate, or to see, as a proportion of the whole.
That’s why it is so absurd to get hung up on a point of principle about correcting these mistakes. Right now, even though we might grumble and moan, I reckon we’re all prepared to accept the vast majority of the cuts imposed — and the property tax as well, no matter how much we might hate it.
So what does that mean? It means that for every €100 worth of decisions, the Government is pretty well sorted in respect of €99.97. They need to look again at the last 3 cent. How anyone could argue that there is an issue of principle in that baffles me. Anyone with a titter of imagination, looking at €55,100,000,000 worth of expenditure, could find savings of a third of a percent without making us uncivilised. It wouldn’t just be the decent thing to do. It would be the brave thing as well.
© Irish Examiner Ltd. All rights reserved