Budget process in the hands of the few

THERE’S no nice way of putting this, but next Wednesday’s budget is going to be a clanger.

The best that can be hoped for is that it will be devised with a level of fairness that has so far been absent from the workings of this Government.

Some of the details have already been leaked. The property tax looks like coming in at 0.2% of the value of a house. That would imply that a figure of €300-€350 will be payable for the average home. That’s bad, but it could be a lot worse.

Child benefit is to receive a hit of €10 per month if the leaks on that matter are confirmed. One prospect for a fair shake has already gone if that leak is accurate. Those at the top, who can afford a hit, are being treated exactly as those who can’t. And the fee for filling drug prescriptions is to be doubled from €5 to €10.

Tomorrow, expect a raft of disclosures in the Sunday newspapers.

For the moment, we’ll have to take Michael Noonan at his word. He declared on Thursday that this budget would be fair. That’s more than can be said for this Government’s first budget last December.

An analysis of any budget by the ESRI last February found that the poorest 40% of people took a hit of about 2-2.5% to their income, while those in the middle income bracket saw a drop of 1%. For the lucky bunnies at the top, their take-home pay fell only by 0.7%.

Interestingly, the same study found that since the start of austerity measures, the top earners have taken the greatest hit in the three budgets prior to last year. Over that period the top 10% of earners suffered an almost 13% decline, while for those in the middle it was 8% and those at the lower end suffered a 4-5% loss of income.

That being as it is, many might argue that the budgets should have been even more progressive on the basis that those in the upper reaches of income had, over the previous decade, received hugely disproportionate increases, and therefore are better placed to take a bigger hit. So Wednesday’s budget will be closely monitored for fairness, and the smart money says that a lot of people will be unhappy with the distribution of pain.

Apart from the fairness element of the budget, the whole process must surely be reformed. When the current government came to power, one of the big, fat promises they made was that governance would be reformed. In this vein, it was widely accepted that power had been in the hands of too few individuals through the reign of Bertie Ahern. This, in turn, ensured that the potential for cock-ups was greatly increased, and the virus of group-think spread with even less resistance. All that was going to change.

And change has come about, except it has gone in the opposite direction to that proposed. Instead of disseminating power, those at the top have pulled power into an even tighter circle. Nowhere is this more evident than in the formulation of budgetary policy.

Noonan said on Thursday that relatively few leaks this year, compared to 12 months ago, has been a positive feature, as it has ensured that fear among the populace is kept to a minimum.

Last Tuesday was the first full cabinet meeting given over to discussing the budget. On the face of it, that is a shocking indictment of our democracy. Prior to that meeting, the bulk of measures to be revealed on Wednesday were discussed only by the Economic management council.

The council consists of Noonan, Minister for Public Expenditure, Brendan Howlin, Taoiseach Enda Kenny and Tánaiste Eamon Gilmore. They are joined in their deliberations by a clutch of unelected advisors and civil servants. This, rather than the constitutional instrument of government, the executive, is the body that has effectively drafted what is expected to be the harshest budget seen this side of the 1930s.

One side-effect of this usurpation of a primary constitutional provision is indeed, as Noonan pointed out, that there have been fewer leaks. In times of austerity, leaks lead to fear. Whether it be the elderly, or those involved in the disability or heath sectors, or the recipients of social welfare, once they hear word that the budget is going to hit them hard, fear spreads. This often suits the minister whose portfolio is affected.

Last year, ministers trod a worn path by selectively leaking about measures to be imposed on their portfolios, hoping that a negative public reaction would lead to a U-turn. In this manner, ministers performed what many of them see as their primary function — protecting their own bailiwicks.

Relieving the ministers of the power of knowledge has contributed to keeping everything on a tight rein. But it means that the budget measures have even less than the albeit minor democratic mandate that full cabinet input would have given.

What is really depressing about the system is that it is seen as a victory that just a few people have sight of the budget in advance of its delivery.

In a grown-up state, budgetary measures are proposed well in advance, then debated in parliament and the media. In this way, measures can be seen to have a proper democratic mandate, and are unlikely to suffer the kind of fall-out that has been a feature of post-budget analysis here since austerity kicked in.

We do things differently in this corner of the developed world. The notion of debating anything in parliament would elicit a wry nod from senior ministers. They put up with the redundancy of the Dáil when they were in opposition, and they sure as hell aren’t going to elevate another branch of government at their own expense now that they hold the reins. Election promises about reform are all very well, but once they get their legs under ministerial desks, they revert to type, hoarding as much power as possible.

Debate ahead of a budget in the public arena is also out in the political culture that prevails here. In a multi-seat electoral system that often ensures paralysis it’s easy for an interest group to exercise muscle and instil fear in politicians.

Hence, anything that is put out as a proposal, rather than a fait accompli, is likely to get kicked half way into next week by one or other interest groups that feels aggrieved. Some such groups are inevitably justified in their resistance, but ability to shout loudest, rather than make a valid point, has always been the overriding feature of political interaction in this State.

There is no willingness to tackle positive change in a dysfunctional culture, and while that remains, the budget will continue to be the formulated and delivered in a manner more befitting a despotic regime.

Good luck next Wednesday. Stay in off the road and hope for the best.