Department of Finance lacks economic expertise, TDs told
Secretary-general of the Department of Finance, Kevin Cardiff, told the Dáil Public Accounts Committee yesterday that it would have been preferable if it had been less reliant on outside expertise in recent times.
Mr Cardiff also accepted many of its economic forecasts had been “dreadful”.
Quizzed about the department’s performance during the current economic crisis, Mr Cardiff acknowledged that it needed to be more open to a wider range of advice than in the past.
Conceding the department did not have enough expertise among its staff, Mr Cardiff nevertheless said it received expertise assistance from the National Treasury Management Agency, the Central Bank, the Financial Regulator, as well as Merrill Lynch and Rothschilds.
And he defended the advice it has provided to the Government. “We give frank advice to the best of our ability. From time to time we get things wrong. We also get things right, but our advice is given honestly and directly,” he remarked.
However, Labour TD, Roisín Shortall, summed up the department’s response to the banking crisis as “mea culpa”, which she claimed was “wholly inadequate”.
Mr Cardiff explained the department had reorganised its work since 2009 to focus on stabilising the financial system, facilitating the availability of credit and protecting taxpayers’ interests.
Fianna Fáil TD Seán Fleming highlighted how the department predicted in 2007 that the following year’s annual budget deficit would be €1.5bn, when it actually came in at €13bn.
Mr Cardiff admitted some of the department’s economic forecasting had been “dreadful”. “But so was everyone else’s,” he added.
On the crash in property prices, Mr Cardiff accepted the department had failed to see the scale of the downturn, but insisted their view was in keeping with most other economic observers.
However, Mr Cardiff conceded that the department had probably adopted a “less active approach to risk” than it should have. “Anyone who had responsibility is very anxious that we don’t ever find ourselves in this situation again.”
