What Haughey wouldn’t have given for Cowen’s big spending options

HERE’S a decent sum of money to play with: €54,321,000,000. It looks enormous, in fact, when you write it down that way. Fifty-four billion sounds like a lot, but we seem to have got so used to talking in billions that the sound of the word has lost a lot of its impact.

The figures still look huge though, don’t they? Any government with that much cash would be able to solve any problem that confronted it. Wouldn’t it? And that’s precisely the amount of cash Brian Cowen announced last week he was going to spend on us in 2007. Of course, that was only the first step.

Next month he will be bringing in a famous budget — the biggest in our country’s history. And by the time he has finished announcing additional spending on current services and on capital projects, he will have brought the total to probably more than €56 billion.

The kind of figures we talk about nowadays have become totally mind-boggling, haven’t they? I have to admit I have great difficulty getting my head around all this stuff, and even more difficulty trying to figure out how come we still have so many social problems when there is so much money sloshing around.

I was reading a famous budget speech from the past the other day. Here’s a quote from it: “A year ago, I drew attention to the huge rise in social expenditure generally and in aid to agriculture. I pointed out that current government outlay on social welfare, education and health had more than doubled in the decade … Outlay on the economic services and on the improvement of the growth infrastructure has also been buoyant. This rise in expenditure came in response to the need to strengthen the social and economic framework of the national economy. The Government’s continuing desire to increase social expenditure and to help agriculture is again evident in this year’s volume of estimates”.

As you can see, the reason that speech was famous didn’t have an awful lot to do with the literary style — it was in many ways a bog-standard budget day delivery.

But that was the famous Charles J Haughey budget speech of 1969. In those days, the financial year ran from the beginning of April to the end of March and the budget was normally delivered around Easter time. Back then, too, families got tax relief for every child they had, and a disproportionate number of children were born in March. If you declared the birth of the child to the tax man before the end of the tax year on April 5, you got a full year’s tax relief. The same thing applied to marriage. March was the most popular month for weddings because it was the best way to maximise the extra tax relief available to married couples. Anyway, the reason people remember that Haughey speech, delivered on May 7, 1969, was because in it he announced that he was introducing the tax-free regime for artists that has lasted ever since.

He had already introduced free travel for elderly people, together with free TV and radio licences for pensioners (in his 1968 budget speech he had expressed the hope that before long the State would be able to give elderly people free TV, and not just the licences).

Haughey was already beginning to go down in history as a ‘People’s Minister for Finance’, and had succeeded in capturing the public imagination in a way that few ministers for finance have achieved since.

Of course, that 1969 budget speech, both popular and populist, preceded by only a few months the first of Haughey’s spectacular falls from grace in the Arms Crisis.

But what is fascinating about that period, when you compare it to the present, was how little Haughey actually spent. The total cost of his free TV and radio licences, for instance, was the equivalent of €160,000 a year.

In 1969, when he introduced the tax haven for artists and writers (and also celebrated annual economic growth of 4.5%), his total spending was a tiny fraction of the money available to Brian Cowen today.

When he talked, in the paragraph quoted earlier, about Government spending on heath, social welfare and education doubling in the decade, he was referring to a total Government spending budget of around €500 million (all the figures in those days were in pounds, of course).

THE balance of that spending was totally different, to such an extent that we would barely recognise it today — for every pound spent on education, for instance, a pound-and-a-half was spent on agriculture. But in today’s terms, the total was pitiably small — €400 million was the total amount spent by the Government in 1969. The Health Service Executive alone will spend more than that in pay increases for its staff in 2007.

Next year, Brian Cowen will spend, believe it or not, 108 times what Charlie Haughey spent in 1968/’69. That growth in capacity and ability to deal with problems, and to make a political impact, is unmatched anywhere in the world. It is a phenomenon.

And yet, when the Book of Estimates was published last week, there seemed to be a general sort of ho-hum reaction. No big deal, just another few billion. When Charlie Haughey announced in 1969 that he was giving an extra ten shillings on the old age pension (that’d be about 60 cent in our money), there was a spontaneous burst of applause on the Government benches. His budget was attacked by Fine Gael as a cynical vote-buying exercise (as if!). And the economic commentators of the day wondered if Haughey, with all this spending, was taking serious risks with inflation.

And now we are in a position to spend — and it’s worth repeating it — 108 times what was spent then without any commentator talking about risk, without any negative impact on employment, fiscal policy or debt management. And let’s not forget, there’s more to come in the budget.

So why does it often seem elderly people are more at risk now and have less entitlement to dignity than they did in Haughey’s heyday? Why are people with disabilities still waiting in queues for essential, basic services? Why do their families still have to sue the State to secure their constitutional right to an education? Why are there still hungry children? Why are so many families in the clutch of moneylenders?

Why do one-in-three children from disadvantaged areas leave school effectively unable to read or write? The concern might have been populist back then, but elderly people, people with disabilities and children always found their way into Haughey’s speeches. We have wealth now that was unimaginable in his day, wealth beyond the dreams of a finance minister in the 1960s, ’70s, ’80s or even ’90s. But have we a sense that there are still, in the words of the poet, “miles to go before I sleep”? We have 108 times more resources now. We just need a little more imagination.