Budget largesse leads to pay claims

Over the coming months, as this Government desperately seeks to have itself re-elected for another term, it would be unusual, indeed, if others did not take advantage of its perceived weaknesses.

In fact, they’ve already started, and we should not be surprised.

The budget of two weeks ago is now a fast-receding memory, as we go about our busy lives, trying to earn a crust and keep our heads above water.

Still, very many of us wait with bated breath to get our hands on the few crumbs that the current coalition government dispensed our way that day.

It was a budget designed to make a lot of potential voters happy.

It more or less worked on the day, but will the feelgood factor last long enough to make the major difference required in the election that must take place in less than six months?

The Government spent €1.5bn in various levels of largesse, and then, genie-like, found another €1.5bn to spend on undoubtedly worthwhile projects.

One can only wonder if this has given an impression that there are other goodies available, which might be accessed by enterprising folk not too fussy about where the money comes from.

Government has form in this regard.

Even when things were still looking decidedly shaky, it effectively committed to redressing the financial cuts experienced by the public sector, even when all and sundry were aware that we were still borrowing in excess of €5bn per annum just to stand still.

It seems to have ignored the advice coming from the EU, ECB, IMF and wiser counsels at home. The advice was to pay down the debt.

They advised that things can still go wrong and to prepare for the rainy day. Now, with an election in the offing and talking up the improvement in the economy, is it actually creating a hostage to fortune?

Cuts were experienced across the board in the public sector, hitting those at the bottom far harder than those at the top. For many, it’s payback time, now that sunny days are here again, at least according to the Government.

In the private sector, if companies have the resources, they can pay more, but if they do not, if they are constantly loss-making, they cannot access the money and cannot pay.

Government should be the same, but it borrows more money, which everyone must pay off without getting any of the benefits. Even now, we will borrow in the region of €4bn next year.

Having to mortgage the future doesn’t seem to bother some. Last weekend, we had the rail workers, once again, inconveniencing the travelling public by striking at the start of a long weekend. Irish Rail, Dublin Bus and the other subsidiaries are in difficult positions. They are part business and part public/social service.

Millions of euro are poured in each and every year, but the companies are loss-making. Pay cuts and productivity gains have been demanded from the employees, which have been begrudgingly given.

They now see the Government waving money around and, naturally, they want some.

It can only accede if it borrows more or increases fares. Either way, the start of another vicious circle is the result.

An Post is another case in point. In recent days, we’ve seen reports that across-the-board pay increases are in sight. The question is how can such increases be provided for in a declining market?

The answers are again simple. They can borrow or increase the cost of postage. But increasing prices inevitably leads to lower demand and the vicious circle continues.

Government, by playing the games it currently favours, is inevitably creating further problems.

Unfortunately, those of us who will get little if any benefit from its largesse will have to pay for those problems.

Right now, it should be keeping its powder dry and selling its success at the helm, with the troika, in guiding the economic recovery, rather than than spending long-term money for short-term gain.

Its current game plan could just have the opposite effect, and result in industrial strife and a winter of discontent, from which there will be no winners.


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