Finance report - Ignoring advice led to catastrophe

AN objective reading of yesterday’s review of the Department of Finance’s performance over the past decade, the kind the IMF, the ECB, prospective foreign investors and the international bankers will give it, suggests all caution and responsibility was knowingly thrown to the wind by Fianna Fáil taoisaigh, finance ministers and a majority of their cabinet colleagues to buy power.

A wishful-thinking reading might conclude that civil servants made negative, limiting suggestions but that politicians, as this is a democracy, decided policy, however ruinous it might prove.

Last weekend’s annihilation of Fianna Fáil points to which of these readings would be more widely accepted. It is likely that had the report been published before voting Fianna Fáil would not have got the paltry 20 seats they propose to use as a base to rebuild their party. Once again it is hard not to be cynical about the timing of the publication of Government reports.

Independent Canadian and Dutch experts concluded that the Department had repeatedly warned Government that its low-tax high-spend policies were dangerously out of kilter. However, the Cabinet, including Micheál Martin, rejected that advice.

It is incomprehensible and more than a little disheartening that as far back as 1999 Bertie Ahern’s government was told officially that the unprecedented growth in construction threatened Ireland’s economic security but nothing was done to minimise that threat. Rather, tax breaks were used to encourage it.

That the report characterises the department advice as “more direct and comprehensive than concerns expressed by others in Ireland or abroad” only adds to a feeling that we have been very badly let down.

The report does point to “an extraordinary public expectation for more spending” so Government were not alone in their irresponsibility but those expectations were fuelled by the ease with which those demands were satisfied. The report confirms too that our parliament was made irrelevant and, in these matters, trumped by the requirements of social partnership.

Last weekend saw an unprecedented expression of anger and it is well past the time to move beyond that but reports like this make that very difficult. It also gives the lie to Bertie Ahern’s pathetic no-one-told-me blather and, by association, damages the reputation of those well-informed politicians who supported him.

It also raises the obvious question about rebuilding an organisation whose culture led it to fail so spectacularly in administration and judgement — why bother?

The successors to the Ahern/Cowen administrations have yet to prove themselves. They will, in time, be subject to similar scrutiny and they would do well to heed suggestions about public sector reform and budgetary preparation in yesterday’s report. They must know too that if they ignore objective advice as disastrously as Fianna Fáil and the Greens did that they will suffer a similar fate.

They would deserve it.