Bertie’s gift saw him escape the blame

CECILIA AHERN’S latest novel is called The Gift. It is a work of fiction and not about her father, the former taoiseach Bertie Ahern, but he enjoys a rare political gift that even a novelist of Cecilia’s imagination would be hard-pressed to put down on paper without testing credulity too much.

He is lucky, almost beyond belief, as the budget emphasised, a gift his successor Brian Cowen and new Finance Minister Brian Lenihan must greatly envy because it has seemingly eluded them.

Ahern is lucky because he is not in charge of having to solve the current mess. Nor is he getting the blame in most quarters for creating it. He is extremely lucky that he was forced to depart his job — for unrelated reasons — before it became clear that the much-vaunted economy was banjaxed.

He was fortunate to win the post of taoiseach when the foundations of the economic boom that became known as the Celtic Tiger had been laid by others and blessed that he was able to spend the proceeds for political, if not necessarily economically wise, ends. He was even allowed a glorious lap of honour for a month in the run-up to his departure from office in which his acolytes made him out to be some kind of economic genius.

Ahern affects of course that he could sort things out if he was still in power. He said as much in a self-serving “gee shucks” radio interview in August. But then again, this is a man who told those who warned last year that the economy was riding for a fall that they should stop their cribbing and that he couldn’t understand why they just didn’t commit suicide.

He’s the man who said “the boom would get boomier” around the same time, coining a new word, a new expression and a new fantasy. Anyone who acted on his recommendation to buy Bank of Ireland stock last month is now nursing heavy losses. A man who claims to have had such big wins on the horses in England during the 1990s might think such advice useful to others.

The Celtic Tiger era, over which Ahern presided, can be broken into two parts. The first part of the boom — the real part — started in the mid-1990s under the rainbow coalition but an ill-timed general election gave Ahern the chance to get into power. Ahern made a good decision in appointing Charlie McCreevy as minister for finance because the Kildareman — despite his many faults and mistakes — did stimulate economic activity through progressive tax cutting. There was also considerable investment in funding public services that had been decimated by cuts in previous decades and neglected subsequently. Productivity boomed and Ireland became a genuinely richer place.

However, Ahern’s government blew the boom by its actions from late 2001 onwards. The economic impact of the 9/11 attacks, the foot and mouth crisis and the dotcom bubble, all led to a slowdown but not a recession. McCreevy tried to gain control of mushrooming public spending but was not allowed to do so prior to the 2002 general election, even though there was already clear evidence that much of the massive extra resources being devoted to health was not delivering the required outcomes.

When McCreevy’s limited post-election cutbacks met with public anger — leading to electoral losses in the 2004 European and local elections — Ahern exiled his minister to Brussels. The years with Brian Cowen as his replacement — clearly working to Ahern’s template in a way that the independently minded McCreevy had ignored — showed reckless disregard for the public finances, adding enormous annual bills that cannot be paid now without extra taxes and borrowing.

Productivity was lost and our competitiveness on international markets reduced and our balance of payments surplus was turned into a deficit.

Worse, Ahern bought into the fiction of continuously rising property markets based on the gorging of cheaply borrowed money because the proceeds of the construction boom were providing enormous tax revenues.

The inevitable collapse of the property bubble — and not the international credit crunch, despite the claims of Lenihan yesterday — is the major cause of the dramatic domestic economic slowdown. That has caused tax revenues to slump and we do not have the money to pay for all of the public services that Ahern ordered in an attempt to curry public favour. Hence yesterday’s woeful budget.

There is a second legacy Ahern has bequeathed. After years of being encouraged by their former leader to fudge and compromise on hard decisions, his successors seem unable to do otherwise. Yesterday’s budget inflicted plenty of pain — as it had to — but few compensating promises of gain. This was a time for the real reform that Ahern never had the courage to implement but his culture lives on. The failure to tackle excessive current spending — despite the likelihood the projections for next year’s tax revenues are unduly optimistic — is the most damning part of yesterday’s budget. Cowen and Lenihan will get blame and deserve it but Ahern should not be allowed to escape his fair share either.

* The Last Word with Matt Cooper is broadcast on 100-102 Today FM, weekdays 4.30pm-7pm.