Government failure to reform the system is a recipe for disaster

DOG years are the best measure in government for counting the budgetary cycle. In human years this Government is not yet at the mid-life cycle. But come budget day on October 15 its third budget will be done and dusted.

It is a racing certainty there will be a fourth. If you want to bet your money on the coalition staying around until October 2015 and delivering a fifth budget for 2016 — go ahead. I’ll keep mine in my pocket for now.

Either way by October 15 most of the substantive economic decisions this government will take, will have been taken. The following May there will be local and European elections. There will be an Irish nominee to the European Commission and perhaps an exit strategy for Enda Kenny into Herman Van Rompuy’s job. Whichever, there will be a cabinet reshuffle. It may feel like the prime of political life when it counts the candles on the birthday cake, but in dog years the Government is on the run-in back to the kennels after budget day.

Given the tightening parameters that are hemming in our budgetary options speculation about what will or will not be cut is mostly guff. We are still borrowing a €1bn every month to keep the country afloat. We rely on the kindness of strangers for that. Escaping from the maw of the troika into the bear pit of the money markets is no cure for austerity. The Government — especially Labour — overpromised in opposition. It has repeated that mistake in government. Hard choices are far from over.

Disconcerting then that the one choice the Government could have made, that would have made a profound difference and would not have cost money we do not have, has been ditched. Political and institutional reform in any meaningful sense has been abandoned. Instead the old jalopy that crashed and burned is being retooled for another run around the economic track. It wouldn’t pass an NCT test. We know from painful economic experience it won’t get us where we need to go. But the ultimate achievement of this Government will have been to get an unroadworthy vehicle back on the road. That in the end is all the gain, which all the pain has been for.

On the big economic issues this government has taken a lot of pain. You can criticise specific decisions, but on the thrust of economic policy the Government has been unrelenting and it has been unrelentingly right. Too little credit perhaps is given to the Fianna Fáil-Green government after 2009 for the measures it took to recalibrate spending. But then it did almost nothing to explain itself and had what might be politely called legacy issues. But this Government arrived with a burst of enthusiasm, and an unprecedented majority. It is unfair to say either is wasted. Much has been done and a little time still remains. We are slowly inching forward economically, and we are no longer reeling backwards. And that is a credit this Government is due.

But in beginning to re-establish confidence, in pushing the car out of the ditch back onto the road, and then unremittingly reneging on every substantive promise of political and institutional reform is a gargantuan and tragic political waste. It robs a largely effective government of a lasting political legacy. Much more seriously it places another generation in jeopardy of inadequate policies and poor oversight from an institutional system doomed to periodically fail. The individual parts of our system are not all systemically broken. But the lack of effective oversight of one over the other is a recipe for recurring crises. As a government that pledged “new politics” and a “democratic revolution” prepares its third budget, it is scarifying how little has changed in the budgetary process. A calamitous crisis was a prompt to promise not just an economic remedy but an institutional recasting.

Yet last week the Minister for Public Expenditure and Reform Brendan Howlin was quoted as saying he and Michael Noonan had “brought no proposals for the parameters of the budget to Government yet and I have embarked on no bi-lateral discussions with any line minister”. That lack of openness within government is far from being unprecedented.

The point is we had learned it was dangerous. The tensions within government between those who are and who are not in the four man Economic Management Council are well rehearsed. But the extent of or lack of collective cabinet oversight on budgetary matters are only the tip of the iceberg. Labour backbench TD Kevin Humphreys said last week he has written to the Economic Management Council complaining that economic data provided to the Fiscal Advisory Council charged with giving government independent advice is not similarly made available to the Oireachtas. The elected Oireachtas and its committees remain a powerless, under-resourced and largely unquestioning rubber stamp for government. The interrogation of budgetary decisions and the policy assumptions underpinning them by Oireachtas committees is derisory and ineffective. Nothing of substance has changed under this Government and no substantive change is in sight. Speaking on Morning Ireland on August 12 the Labour TD and member of the Dáil Finance Committee, Arthur Spring, spoke of a “dysfunctional system” and said he would “like to see the country governed in a different way”. Spring’s believes that before the summer break the finance committee “should have the parameters of a budget agreed” and “the [departmental] committees themselves should be told the quantum of the amounts of money they need to make adjustments by”. Presumably the budgetary parameters he correctly says should be agreed with the finance committee before the summer are the same ones that last week Brendan Howlin said he and Michael Noonan have not brought to government or initiated bilateral discussions on with any line minister.

THERE is little new in any of this. What is damning is that nothing has changed. This really matters because it was the slow accretion of comfort and the erosion of questioning across government, elected and permanent, that led us first imperceptibly and then calamitously into this mess. From within social partnership in the noughties and bleeding out across the nexus of the department of finance, Central Bank, Financial Regulator and banking industry, comfort zones spread like dry rot. Questioning within shrivelled and never effectively extended to the Dáil anyway. A system that can stop itself at the edge of the cliff is one where hard questioning is in-built and ongoing. Ours has neither, hence our recurring jeopardy.

This day seven weeks will be the day after budget day. If it is prudent we will be another half inch out of the armpit of austerity. But we won’t be an iota further on from the hugger mugger that got us into it. Power perpetuates itself by keeping people and information in pigeon holes; preferably separate ones. But only one thing ever happens in a pigeon hole and it’s unsanitary.