A budget speech of political inserts, very carefully managed

ONE of those small but informative insights into the manner in which governments go about their business came courtesy of the budget documentation released by the Department of Finance on Tuesday.

Each year, the Finance Minister’s speech to the Dáil is accompanied by a so-called “Budget Book”, which contains the speech, a summary of the measures being taken, economic projections, and related details.

While finance ministers are always making late adjustments in budget week, they have to call a halt at some stage because the Budget Book has to go to the printing presses. But Michael Noonan evidently kept changing his speech right up to the final hours on Tuesday.

He acknowledged this at the beginning of the speech when telling the Dáil there had been some “amendments” to the speech and that the Budget Book version was therefore not the complete one.

The amendments were mostly minor, but intriguing in their own way. For example, in the Budget Book speech, Mr Noonan referred to the Jobs Initiative which the Government introduced earlier in the year.

“The creation of a second reduced rate of VAT of 9% and halving the rate of employers’ PRSI on jobs with earnings up to €356 per week in the Jobs Initiative has boosted tourism and stimulated employment.”

But he added the following paragraph in his speech to the Dáil: “It is interesting to note that the latest Live Register figures show that 125,000 people left the Live Register to take up employment this year up to the end of October. This shows the difficulty with attempting to assign the creation of new jobs to specific initiatives. However, the tourism and hospitality industry believe that the Jobs Initiative has been very effective in generating additional business.”

The late addition was arguably a reflection of the Government’s sensitivity over the Jobs Initiative. It was criticised when it was introduced for not doing anything near enough to tackle the unemployment crisis.

Mr Noonan clearly felt he needed to prove it was actually working, hence the late insertion of a paragraph referencing the Central Statistics Office (CSO) figures.

But the figures proved nothing, and Mr Noonan betrayed the unconvincing nature of his case with his own language. While 125,000 people had taken up employment, it was virtually impossible to demonstrate how many of these jobs had arisen thanks to the initiative.

In the same section of the speech, he also added the following paragraph: “At the Global Irish Forum held in Dublin Castle earlier this year, it was announced that 2013 would be the ‘Year of the Gathering’ — a year-long programme of festivals, events and other gatherings designed to encourage the global Irish to visit Ireland in 2013 and to increase tourist numbers by 325,000. A special allocation will be made in the revised estimates volume early in the new year and it will be launched on St Patrick’s Day.”

Even though the Government had already announced “The Gathering”, it seemed Mr Noonan — or perhaps somebody else in Cabinet — felt it was worth repeating.

The Coalition was desperate to convince people in the Budget announcement it was doing all it could to create jobs. The mention of what is effectively a large-scale tourism promotion was, in the Government’s eyes at least, a valuable late addition — even if, again, it’s impossible to predict how many, if any, jobs this effort might produce.

There were more inserts. One of them was that there would be a “consultation on whether and to what degree pension funds might invest more in Ireland, rather than abroad”.

Like most promises of consultations or studies, it was vague and detail-free. But Mr Noonan wanted to be seen to be examining as many potential investment-creating options as possible. Arguably the most political of the inserts came towards the end of his speech. In his conclusion, he took a swipe at Fianna Fáil’s handling of the country, and said there could be no return to the bubble economy.

And then came the insert: “If we need a role model it should be the economy of the mid to late 90s where over 600,000 jobs were created and growth was based on competitiveness, high educational standards, a credit flow from the banks to enterprise and hard work.”

In other words, the economy that Fine Gael and Labour presided over when last in power from 1994 to 1997. Politicians in both parties are very fond of pointing to that administration’s excellent economic record.

Unsurprisingly, they are not as fond of pointing to the dismal record of the previous Fine Gael-Labour coalition of 1982-1987. There was no mention of that particular administration, even though Mr Noonan was a minister in it.

Funny that.