Fergus Finlay: Will today be a budget that shifts Ireland’s direction? I doubt it

Finance ministers are fiddling at the margins in budget after budget, never making any real life-altering decisions, writes Fergus Finlay
Fergus Finlay: Will today be a budget that shifts Ireland’s direction? I doubt it

Public expenditure minister Michael McGrath and finance minister Paschal Donohoe at the Department of Finance signing off on Budget 2022. Picture: Moya Nolan

So — welcome to Budget Day. I’m almost tempted to say 'who cares?'. If you’ve been reading Daniel McConnell in this newspaper, you know pretty well everything that’s going to be announced today. 

The pension increases, the extra social welfare payments, the minor tax changes, the extra money for education, childcare, and tourism.

It has all been extensively leaked already. In fact, I was tickled by the line in Daniel’s piece in yesterday’s paper, when he referred to “leaks, authorised and not …”. What the hell, I wondered, is an authorised leak?

There was a time when there was no such thing as an authorised leak, especially around the budget. Several senior politicians over the years lost their jobs because they leaked something out of the budget beforehand — sometimes only a couple of hours beforehand.

The first budget I ever worked on was back in 1983 — not far short of 40 years ago, I’ve just realised. Peter Prendergast was the government press secretary then, and I was his deputy. He was hardline Fine Gael, and I was hardline Labour.

Alan Dukes was the relatively newly appointed finance minister. Prendergast and I were called to Dukes’ office an hour before he made his budget speech, so he could tell us what he was going to say.

Alan Dukes, pictured in 1986. Picture: Eamonn Farrell/RollingNews.ie
Alan Dukes, pictured in 1986. Picture: Eamonn Farrell/RollingNews.ie

 Before he said anything, he reminded us of our responsibilities under the Official Secrets Act. That’s how seriously the possibility of a leak — even an hour before the budget — was taken then.

We weren’t allowed to ask questions in that meeting and our opinions certainly weren’t sought. We were just supposed to be told enough so that we could present a united front in trying to “spin” the budget.

It didn’t work out that way, of course, because Prendergast and I had diametrically opposed views of the impact of the decisions made. 

That budget was created in an atmosphere of considerable tension. The Fine Gael-Labour coalition presenting it had inherited an unholy mess of an economy a couple of months earlier, and there was no option but to cut spending. The row — and it had consumed politics in the preceding couple of months — was about the size of the cut.

Labour actually won that row in 1983, and the result was that the cuts in the budget weren’t nearly as bad as they would otherwise have been. But one of the great truisms of politics is that you never get any credit for the things you prevent. You only get credit for the things you achieve.

Even though Labour won the immediate row on spending cuts, two of its TDs resigned over the budget. That didn’t stop Fine Gael — mostly Prendergast — spinning about what a crowd of wimps the Labour Party were when it came to making the tough but necessary decisions.

Ever since then I’ve regarded the entire budgetary process as an accident waiting to happen.

We’ve had budgets that were designed to win elections, and a couple that contributed to losing elections. 

We’ve had budgets characterised by their authors as groundbreaking and historic, which were actually farcical in their intent and outcome (do you remember Charlie McCreevy’s decentralisation budget, for example?).

Under the watchful of his predecessor Charlie Haughey, then-finance minister Charlie McCreevy introduced Budget 1999 on a computer. Picture: Billy Higgins
Under the watchful of his predecessor Charlie Haughey, then-finance minister Charlie McCreevy introduced Budget 1999 on a computer. Picture: Billy Higgins

We’ve had budgets that will go down in history for their austerity — Brian Lenihan’s “patriotic” one — and others for their sheer hypocrisy: Ray MacSharry’s first budget in 1987 made huge cuts in health and social spending. But it was introduced in the immediate aftermath of a general election in which his party, Fianna Fáil, campaigned on a slogan that said, thousands of times, “Health cuts hurt the old the sick and the handicapped”.

Fianna Fáil campaign poster.
Fianna Fáil campaign poster.

I can still, all these years later, recite that slogan verbatim as an example of the sheer brass neck that sometimes works in politics (though usually not for long).

The daddy of all budgets, of course, is one that was introduced in much more innocent times. It was introduced against a background of a current budget surplus of £800,000 — no, that’s not a misprint, the budget surplus was less than a million. It would barely support a leader’s allowance for a couple of independent TDs nowadays.

It was the first budget of Charlie Haughey in 1967. It cost almost nothing at the time, but it became legendary, because he introduced free travel for pensioners and tax-free status for artists. 

To this day, there are people who believe that Haughey should be forgiven everything because of what he did for the pensioners.

That free travel business is now one of the “givens” of any budget. It’s OK to put a few bob on cigarettes on Budget Day, but the finance minister has yet to be born who would announce that not all pensioners need free travel (even though it’s true). 

And there are so many “givens” nowadays about the budget that, actually, there is a tiny amount of manoeuvre whoever the minister is.

Everything from the things we know about — like the standard rate of income tax, for instance — to the things that are never discussed, like the impact on the public service pay bill of guaranteed annual salary increases in the form of increments, they all add up to billions. And they all mean that, effectively, finance ministers are fiddling at the margins in budget after budget, never making any real life-altering decisions.

It will be the same today. From all the “authorised leaks”, we can expect this budget to be received pretty kindly, because there’ll be a few goodies for everyone and not much pain for anyone. But will it be remembered as a budget that shifted Ireland’s direction? I doubt it.

Take the issue of childcare, for example.

The Government that wants to do anything meaningful about this issue is going to have to face one fact. We’ll never get childcare right in Ireland unless we start from scratch.

We believed up until relatively recently that we didn’t need childcare at all in Ireland. While countries all over Europe have been building high-quality childcare systems since the end of the Second World War, we decided that was the mothers’ work. We didn’t want women in the workplace for generations, so we actively discouraged them. Equal pay? Perish the thought!

Then suddenly we did need them, and so we established the craziest system of childcare in the world: No curriculum, limited standards, no professional careers, just thousands of grants to thousands of private, for-profit operators. 

It doesn’t work, and it never will work. We need a national system built from the ground up, operated by local authorities and funded by that State. That’s the only way families will ever be able to afford a quality system.

To do something like that on Budget Day — and be remembered forever — a finance minister would have to decide it’s all he’s going to do. No other goodies of any kind — no pension increases, no tax giveaways, just a single-issue childcare budget with every penny of the investment going just to one area. It would change the country’s direction profoundly for the future.

But will it happen, today or any other day? I’m not holding my breath.

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