Government needs to be on the money with forthcoming budget

WATCHED the first episode of The West Wing, for the first time in years, the other night. I’d forgotten how good it was: a dense, fast-paced political drama, packed with dialogue and incident. You knew you were watching something good.

But it burst into greatness when Martin Sheen appeared. He played President Jed Bartlett. But I’d forgotten he was originally intended to be an incidental character. The show was to be about the staff, and the happenings in the backroom of the White House.

So, Bartlett didn’t feature in the first episode until about ten minutes from the end.

But he dominated the screen for that ten minutes, and he ensured that I (at least) was hooked from that moment on.

There had been in-fighting while Bartlett was on holidays, and things had got a bit out of control. It took Bartlett a minute or two to sort it out, and then he acknowledged that people had been taking a break.

“Breaks are good,” he said. “But the break is over now.” His message, to anyone who thought they might still want to sort out a few ego issues, was clear.

Well, the break is over, isn’t it. We’ve been through the silly season in media and political terms, and nothing outlandish or daft happened to disturb us or get us riled up. From now to Christmas — and that, believe it or not, is only 16 weeks away — it will be hard politics all the way.

A mere six weeks from today we’ll see the Budget for 2015. From now till then, you can expect to read endless speculation, hints, spinning, maybe even the occasional leak.

This Budget will be make-or-break for the Government. If it’s a deep disappointment, it may come to be seen as a nail in their coffin. If it’s widely seen as a harbinger, at least, that the economy is well and truly on the mend, and that living standards will start to improve again, it may underpin what will be seen as a remarkable political recovery.

But there’s a careful balance to be struck. The Government will not want to be seen buying votes nor spurning them. If the Budget looks like a giveaway, and the Government stands accused of undermining a fragile recovery, as a result, they will be attacked from all sides. They can’t afford that, either. They have to come out of the Budget still looking credible, without appearing to have ignored the fact that so many people feel squeezed to the absolute limit.

The Cabinet will be having its first meeting after the holidays this week, and the Budget will be high on its agenda. They usually start with the Book of Estimates — deciding how much will have to be spent next year to keep the show on the road. At first glance, you’d imagine this is a huge and daunting task.

We’re talking, after all, about €50bn, give or take a few bob. That’s — hold your breath — €50,000,000,000. It’s a monstrous sum of money. And you know the funny thing? If someone said to you, here’s €50bn, design a spending programme from the bottom up, it certainly wouldn’t look anything like the spending programme that will be produced.

The great bulk of this spending programme is already set in stone. Long before ministers get to look at it in the round, civil servants have been trudging backwards and forwards to the Department of Public Expenditure for weeks, seeking to defend and protect their own tiny bit of the Budget.

Week by week throughout that process, the Book of Estimates builds up, so that by the time the Cabinet gets a first look, it’s like a thousand-piece jigsaw, almost entirely complete.

The Cabinet will get a chance to add one — maybe two — last pieces of that thousand.

If you think I’m exaggerating, look at any of the tables at the start of the last Book of Estimates. Two-thirds of every euro is spent on health and social protection, and one euro in every five is spent on education.

Add them up, and it’s about 83% of the public spend.

If you look at it a different way —not what it’s spent on, but how it’s spent — 40% of the €50bn is spent on social-protection payments, 31% on pay and pensions, and the rest on everything else (including the servicing of our national debt).

In short, on the spending side of their Budget calculations, ministers don’t have too many decisions to make.

And they sure don’t have too much room to manoeuvre.

But that doesn’t mean they have pressing problems. The growing housing crisis is a classic example. Public policy in Ireland essentially decided, some years ago — when there was more than enough money to do otherwise — to leave the provision of housing entirely in the hands of the private sector. As a consequence, no local authority houses have been built for years. The existing stock is entirely inadequate to meet the most basic needs, and, in a few years’ time, we’ll have thousands of dilapidated houses and estates on our hands. And thousands of families with nowhere to go.

That’s a big issue.

Here’s an example of a smaller, equally pressing one. Last year, the Government established a new Child and Family Agency, to rectify some of the failures and mistakes of the past. It was given a single mandate — to protect the nation’s vulnerable children.

It was also given a budget that was, to everyone’s certain knowledge, around 90% of what it needed to do the job.

As a result — and through no fault of its own — the Child and Family Agency is facing a financial over-run before it reaches the end of its first year of operation. That’s a recipe for failure — and failure in this case means children’s most pressing needs not being met. If that isn’t fixed in this Budget — and it will take €60m to fix it — the new agency will spend the next few years managing inadequate budgets, rather than helping to build the better future we all say we want.

Of course, if the Government can address these and other pressing spending issues, they then have to turn their attention to how they raise the money — and how much they can afford to give back. They must not jeopardise the prospect of economic recovery, but they have to be able to persuade us that we can all benefit.

The tax measures in this Budget will have to be just as finely balanced as the spending ones. And if spending is a complicated jigsaw, taxation is a mix of high-wire walking and juggling with fire.

By the end of it, they might feel like running away to join the circus. Ironically, that’s almost precisely the set of skills they need.

They must not jeopardise recovery, but they have to persuade us that we can all benefit