They tell you the money isn't there but you'd be a fool to believe them

IT'S the best-kept secret in Ireland - 5,402,369,000. It's a big number.

It's the current budget surplus, a measure of how well-off we are. I'm going to refer to it as 5.4 billion for short, because it takes a long time to keep writing or reading the full figure. But now and again I want you to just glance up to the top line of this column, just to see how big that number is.

Because you won't find it highlighted in any Government press release (it's always buried at the back). You won't find it referred to by the economic commentators who grace the pages of our newspapers and especially the airwaves, both radio and television. I'm convinced, as a matter of fact, that there's an unspoken conspiracy to keep the number secret.

I want to explain what that number means in just a moment. But first I have an idea I want to share.

I'm going to build an extension to my house. It will be modest, and long overdue. If I were to increase the existing mortgage on the house just a bit, the repayments wouldn't be too demanding, and I'd have a lot to show for it at the end of the work. A fine new house, my family's asset considerably improved in value, and about 15 years to pay for it. It's what a lot of people are doing nowadays.

But I've had a better idea. Instead of increasing the mortgage, I'm going to pay for the extension by taking two of the kids out of school and getting them jobs. And I'm going to feed the family a bit less each day.

That will generate enough day-to-day income to pay for the extension.

Isn't that a great idea? I'll pay to improve my property by squeezing day-to-day spending instead of borrowing the necessary amount (even though I can easily afford the repayments). The kids will suffer, but I won't have to go into debt.

Maybe you do think that's the right way to go about building an extension to the house. If you do, perhaps you shouldn't read any further.

But if you think it's sensible to borrow what you can afford for such purposes as home improvement, read on! On January 3 the Department of Finance issued a statement. The heading on it was "Surplus of 95 million". It went on to explain that the Exchequer had recorded a modest surplus of 95 million the fifth year in a row this has been achieved. But the surplus was tiny, admitted the department, and this led to the Minister for Finance emphasising "the need for continued firm management of public resources. The 2002 out-turn is encouraging, but fiscal restraint remains a necessity for the period ahead", said the minister (and they put his quote in italics, to emphasise it further).

This is how the story was reported in the Irish Examiner the following day (and all the other papers had similar reports): "A last-minute recovery in the national finances has left the country with money in the bank despite predictions of a New Year debt.

"End of year Exchequer returns published yesterday recorded a surplus of income over day-to-day expenditure of 95m for 2002 just months after the Department of Finance warned that a 750m deficit was in store. But the remarkable turn-around will not mean any loosening of Government purse strings which were pulled tight in last month's Budget."

But the surplus wasn't 95m at all. It was, in fact, that astonishing figure at the top of this article, 5.4bn.

That's right. Last year the Government earned 31.5bn. The Government spent 26.1bn.

That's what all the salaries, all the services, all the benefits and allowances cost. To run the state, to educate our children, to keep us healthy, secure, and safe, to pay our pensions, and all the other things the Government does it cost 26.1bn. And we took in 5.4bn more than we needed.

In Department of Finance terms, that 5.4bn is called the "surplus on current account". A massive profit on day-to-day spending.

So, what did they do? Honey, they shrunk the surplus. They took about a billion euro and put it into the so-called pension reserve fund. They took another billion and allocated to the building of our national roads.

More money went into housing, sanitary services, some school and hospital building, and so on. And pretty soon they had allocated all the day-to-day money to long-term capital projects.

And that's the point. It was day-to-day money. Our health service is crying out for some of that money.

The Government recently published a list of schools all around the country in desperate need of refurbishment.

With just a little of the money those problems could begin to be addressed.

Take just one of the figures I've mentioned the billion euro of current, day-to-day money we are going to spend on the national roads programme.

Why aren't we willing to borrow that money? It makes absolutely no sense whatever to insist that we will only build roads, an essential part of our economic infrastructure, out of day-to-day income. In fact it's absolutely crazy.

We aren't forced to use money this way. Within all our European commitments, we can increase the amount we borrow for capital purposes.

But we have chosen to refuse to borrow exactly like the father who decides to feed his family less in order to pay for the house extension.

Except that we're not telling anyone about it. When parents and school principals all around the country protest at the appalling conditions in their schools, they are told that the money simply isn't there. But it is.

We have billions of surplus money, but we are spending it on projects for which we should be prudently borrowing.

If we borrowed for some productive investment, we would free up resources for things like the rat-infested schools. And remember, investing in roads and other infrastructure increases our ability to generate income in the future, making it easier to manage the loan.

But the fetish about borrowing is getting in the way of progressive decision-making, and the establishment silence on the subject is preventing an honest debate.

I'm not arguing that we should go mad and borrow all around us. We all remember what the bad old days of massive national debt were like. But we can well afford to borrow a bit more than we do, and devote that money to capital projects, thereby freeing up current money for urgently needed current needs.

Incidentally, the Department of Finance projects that the current budget surplus will be over 3bn this year, over 3bn in 2004, and over 4bn in 2005.

That's 10bn money raised in taxes specifically for the purpose of providing public services.

We should be debating this. If we are going to be told, day after day, that the country is broke, that there's nothing in the kitty, that we have to tighten our belts, we should be given the full facts out in the open.

We're entitled to nothing less.