Prudent Paschal? “More like Profligate Paschal” was the charge about his third budget, writes
Despite all this talk of modest increases in spending of about €800m, in truth the extra spending into the economy in 2019 has jumped by €5.6bn.
Yes, that’s €5.6bn.
To set that out straight, a year ago, Finance Minister Paschal Donohoe announced total Government spending for 2018 of €60.9bn. Yesterday, he announced total Government spending of €66.5bn — a staggering 9.1% increase.
Compared to a year ago, current expenditure has soared from €55.5bn to €59.2bn while capital spending has risen from €5.3bn to €7.3bn.
His commitment of a 2:1 split between spending increases and tax cuts was abandoned, largely due to the last-minute addition of monies because of the corporate tax windfall last Friday.
Consider that of the €5.6bn in extra spending in the budget, just €291m has gone on tax cuts.
Crudely, as one pundit put it, that is a split of 19:1, but Donohoe and his people said it is really about half of that.
Even still, the rate of increase in current spending is shocking, and he has still managed to balance the books for the first time in a decade.
So where is all this extra money going?
A huge chunk of it is going on capital expenditure, largely driven by the housing crisis and the need for more schools, hospitals, and roads.
But the alarm bells must be ringing in terms of health spending. Allocated €14.7bn a year ago, Health was yesterday given a budget of €16.4bn by Donohoe — an increase of €1.7bn with little sign of progress. This year will be the 16th year in a row that Health has overrun and one wonders what sort of financial control is in place.
In the Dáil, despite the huge jump in spending, there was a palpable sense of anti-climax when Donohoe took to his feet. One hour, 14 minutes, and 52 seconds: Donohoe, replete with his heavy cold, to labour through his ‘non-election’ budget.
It is definitely not an election budget, countless Government politicians were keen to emphasise yesterday. They would stare into your eye to insist it was not an election budget.
The opposition was not buying it.
If it looks like an election budget, if it sings like an election budget, then it is an election budget,” said Labour’s Joan Burton, the former tánaiste.
Almost as soon as Donohoe sat back down, attention was already moving on to what happens next.
With the entire budget leaked out before yesterday, there was no drama, no controversy.
The whole day had an anti-climactic sense to it, even if Fianna Fáil’s Barry Cowen did his best to inject a bit of spice to the affair. Defending his party’s role in the confidence and supply deal, he lashed out at the other parties which have lambasted Fianna Fáil for it. “We have kept faith with the agreement often in difficult circumstances and messy compromises to maintain the centre ground in Irish politics,” said Cowen.
We have worked for the ordinary citizens who want their Government to work for them. Other parties have been content to sit on their hands. In Brendan Behan’s words, they’re ‘like eunuchs in a brothel; they know how it’s done, they’ve seen it done every day, but they’re unable to do it themselves’.
Later, Cowen sought to pile the pressure on Transport Minister Shane Ross, who was feeling sore over his failed attempt to stop the reversal on the 9% Vat rate. “Minister Ross has been trying to appeal to grannies like a political Dickie Rock. But a two-for-the-price-of-one granny grant does not constitute a childcare policy,” said Cowen
A short time later at his own press conference, Ross and his not-so-merry band of Independent Alliance warriors were doing their best to put a brave face on things and deny they were at each other’s throats in the past few days.
When asked about Cowen’s comments comparing him to the popular singer Dickie Rock, Ross replied: “Barry Cowen says a lot of things.”
One of the key concessions heralded by the Independent Alliance was the proposal to give a grant to allow people downsize and split their homes to make room for other families.
However, Donohoe would only commit to a review to the outcome of a pilot project in Clondalkin in Dublin, involving one house.
When this emerged, the sniggers were audible.
“This tells me Fine Gael do not want to do any more business with these guys and it is the clearest sign an election is on,” said Labour’s Alan Kelly. He put the likely date for an election as Friday, December 7.
At the same time, Fianna Fáil leader Micheál Martin said he was going to ring Taoiseach Leo Varadkar last night to open the door on talks to extend the confidence and supply deal.
The next few days will determine a lot.