Government’s siege mentality is likely to deliver a budget disaster

FOUR cabinet meetings in a week. Members of the government snowed under with paper.

Civil servants scurrying to and fro, their knitted brows and hushed corridor meetings all suggesting the imminent collapse of the heavens. Calculators working overtime as the cuts are totted up. An air of emergency hanging over the whole thing. Ministers telling each other the time has come to be tough. Really tough.

It’s a recipe for disaster. They are almost bound to make political decisions that will be looked on in years to come as acts of folly — and will probably be judged to have been unnecessary.

There was a small but significant omen the other night when Agriculture Minister Brendan Smith told RTÉ they were looking at five billion in cuts now, but if the March returns warranted it, that might go up to six. No doubt under instruction, he later contacted RTÉ to say he hadn’t meant to be specific about the figures — but he had certainly given something away about the atmosphere.

The head of the US Federal Reserve says the recovery is on the way. European central bankers agree with him. The US and British governments are determined to restimulate their economies, to get some growth going again. We are looking at a seriously deflated economy, an economy that cannot sustain jobs anymore, and we are apparently about to deflate it further.

And we’re going to do it in a week of crisis meetings, one after the other. It’s the 1980s all over again.

Garret FitzGerald is many great things. But he was never any good at chairing meetings. During the economic crises of the 1980s he would hold his cabinet prisoner for hours at a stretch. It wasn’t unusual to see government ministers tottering out into the night, pale and exhausted, after eight, nine or 10-hour meetings. If you stopped them and asked them what they had decided in, say, the first two hours of their meeting, they wouldn’t have a clue.

It was at the end of just such a series of meetings, back in the mid-1980s, the day that some of the government went on their summer holidays, that they decided to abolish the food subsidies that existed at the time.

They managed to convince themselves that international markets needed to see evidence of Ireland’s strong determination to get hold of the public finances and that they had to take some bold decisions to send a signal to the outside world. Otherwise, they believed, there was some possibility that the International Monetary Fund would step in and take over the management of Ireland’s debt (At the time Ireland’s debt was about three times what it is now, as a proportion of our wealth).

The decision made, several of the exhausted ministers, including the taoiseach and the finance minister, went off on holidays and it was left to a government spokesperson to announce the abolition of food subsidies — a cut that was especially serious for lower-income families. In the resulting furore, and in the absence of the others, Dick Spring, tánaiste at the time, had to defend the decision. And of course, as a result, he was personally blamed for doing it in the first place.

I hope you see where I’m going with this. The comparisons between then and now are fairly clear. And faced with the kind of pressure our political leaders are facing now, bad decisions — the sort of decisions we’ll regret in years to come — are almost certain.

One example, in my view, will be the end of free education. We ought to be proud of the fact that in Ireland education is free at the point of entry at every level. And we ought to be working to make it not just free, but really accessible and high quality — for everyone from three to 21. Instead we have developed a myth that free third-level education is some sort of boon for the rich.

There was a time in Ireland when third-level education was a privilege of wealth and accessible to almost no one else. But there was a time in Ireland too when it was possible to argue that if you wanted the wealthy to make a fairer contribution to society, that was what the tax system was for.

Over the past 15 years in Ireland, the leading ideology was one that argued against free third-level education. And at precisely the same time that ideology was responsible for systematically reducing the amount of tax that rich people paid — all in the interests of promoting “enterprise”, incentivising “risk-taking” and rewarding “entrepreneurialism”. We can all see the limits of that approach.

But if it’s not the ending of free education, it will be some other bad decision. Because the climate in which these decision are being made is a deeply unhealthy one.

The Government has got itself into a siege mentality where they see themselves as being almost the only ones who understand how bad things are. And they are going to make what they see as necessary economic decisions. When, instead, the first decisions they need to make are leadership decisions. The outline of those decisions is clear enough to everyone else

— but there is still no sign that the cabinet sees them. Well before the budget the Taoiseach should be announcing that his Government, in the emergency that they see surrounding them, is going to make some real sacrifices themselves. The cost of government has to be dramatically reduced — and it can be done without impairing in any way the efficiency of government.

I’m not suggesting members of the Government have to undertake a more ascetic lifestyle — although actually, that wouldn’t be a bad thing.

TOO many cabinet ministers seem to believe that luxuries like helicopters ought to be laid on for them “because they’re worth it”.

If there is really to be a sense of shared sacrifice, the Taoiseach needs to make it clear to his ministers that if they want to remain in his cabinet, they need to adopt significantly different lifestyle approaches. And he needs to lead by example.

On the Late Late Show last Saturday night, not one senator was able to put up a convincing argument about the value of the House they sit in. Had there been a collection of junior ministers present, we’d have seen exactly the same thing — “we all work very hard, even though we don’t make a blind bit of difference”. There really is an unanswerable case for less of everything now, and even more so for starting at the top if pain is to be shared.

So I hope, if nothing else, that at least part of the Government marathon this week is devoted to politics and leadership, and not just to floundering around among the figures. If they’re obsessed with reaching some preset target of cuts and taxes, as I suspect they are, they are going to make serious misjudgments. If they don’t stop to ask themselves what real leadership requires, what the longer term requires as well as the immediate term, they’re doomed, economically and politically. And they’ll bring us down with them.