New model for fiscal rectitude

MUCH media coverage recently has been dedicated to the pointless political stunt of abolishing Seanad Éireann. This is a stunt which would not meaningfully help the public finances or genuinely reform politics.

Therefore I would like to propose a constitutional amendment that would radically reform how we treat our public finances in Ireland.

The amendment could be approved now by referendum to come into effect from 2012, for example.

It would be twofold.

Firstly, we would enshrine in our constitution the legal prohibition of any government spending that would create a budget deficit.

In particular, it would specifically forbid the state from approving spending that would necessitate tax increases later.

Ireland would operate under an annually balanced budget because of spending restraint, not tax increases.

The second provision is prefaced on the reality that politicians, first and foremost, are concerned with the acquisition and retention of power.

With this in mind, my amendment would provide for an automatic extension of a government’s term in office as a reward if Ireland maintained a budget surplus and had no national debt at the end of that government’s term.

This constitutional extension would be for one period only.

Thereafter a government would have to seek a fresh mandate come what may.

This would be the greatest incentive possible for our politicians to be fiscally prudent. The EU stability and growth pact is a good concept. Alas, it has proven itself impotent. We, as a country, have to enshrine fiscal prudence in our own constitution.

I believe nothing less than a constitutionally unbreakable requirement would prevent a crushing public debt being accrued again in Ireland.

A mere act of the Oireachtas mandating a balanced budget would not be worth the paper it was written on as it would be too vulnerable to future dilution.

The constitutional requirement I have proposed here would make it much easier for politicians to resist interest group pressure as the state could not legally provide for spending that would in the future contribute to a deficit.

If we enshrined in the constitution what I propose, we could prevent a national budget deficit being accrued ever again.

We would also send a unique statement to the rest of the world that Ireland is serious about becoming a model of fiscal rectitude, like Switzerland or Norway.

This statement would have come directly from the Irish people, not merely from our government, thus achieving the maximum significance possible.

I have no doubt that given this country’s experience with public finance calamity at the hands of the state, the people would decisively approve the measure I propose.

John B Reid

Crannmor

Knapton Road

Dun Laoghaire

Co Dublin