Cowen's 10 Billion Blunder - Bruton by
pfkf1 on Thu Mar 13, 2008 8:06 pm
The ESRI has warned that thanks to Brian Cowen's blunders the public finances will have deteriorated by €10 billion by the end of next year as the Fianna Fáil Government continues its spending spree with taxpayers' money, Fine Gael Deputy Leader & Finance Spokesman Richard Bruton TD has said.
Speaking following the publication of the latest ESRI Quarterly Economic Analysis, Deputy Bruton said: 'In the light of today's ESRI Report confirming the alarming deterioration of the public finances and the wider economy, it is now clear that finance Minister Brian Cowen has made a series of catastrophic blunders as Minister for Finance'.
o He used one-off bumper tax receipts from an unsustainable property boom to permanently expand day-to-day Government spending by amounts far in excess of the growth in the economy. As property-related tax revenues dwindle, and as day-to-day spending continues its relentless rise, the ESRI is now forecasting a €9.8 billion downturn in the Exchequer balance in the space of just 36 months - the biggest and most rapid deterioration in the health of the public finances in history.
o He has provided no fiscal room for manoeuvre if the economy gets any worse. According to the ESRI, the Government deficit will reach 2% of GDP next year - not far off the 3% deficit limit under EMU.
o He ignored repeated warnings that his expansionary Budgets in 2004-06 were fuelling an already overheating economy. Cowen's reckless spending splurges put relentless upward pressure on wages and costs across the economy. It destroyed the capacity of many exporters to hold on to their markets.
o He insisted on numerous occasions that the debt-fuelled property boom was based on "sound economic fundamentals" , when this was directly contradictory to the advice he was receiving from independent experts. Urged on by his construction industry supporters, he acted as chief cheerleader to the property boom in 2005-06, leaving up to 70,000 First Time Buyers who purchased their homes since the beginning of 2006 now facing the prospect of negative equity.
o He has achieved no significant improvements in value for money for taxpayers or in public sector productivity, with CSO figures showing that cost inflation in public spending under Minister Cowen has been twice that of the UK.
o He misled the electorate about the state of the economy in 2007, promising massive tax cuts and spending increases that he cannot deliver. On the basis of the ESRI report, tax revenues now look like they will be at least €7 billion lower than assumed in the Fianna Fáil election manifesto by 2012, ruling out all of their tax and spending promises without recourse to massive borrowing.
"Despite the mounting economic problems, Minister Cowen continues to display alarming complacency. Under his Budget for 2008, day-to-day spending continues to outstrip growth in the economy. No measures are being taken to reform the delivery of public services to get better value for money. None of the 250 new quangos which have mushroomed under the Fianna Fáil Government are being reined in.
"Instead the Minister for Finance is treating taxpayers like fools. He pretends that he is in control. He refuses to admit that a €500 million shortfall in just two months means his Budget is totally off course. He insists that he is pursuing a Programme for Government that simply cannot be achieved.
"Minister Cowen is admired as a powerful parliamentary debater. But it is his decisions as Minister for Finance that ultimately matter to the Irish people. No amount of rhetoric is going to get Ireland out of the economic mess that he has created.
"Mr Cowen must now rescue his reputation by demonstrating that he has the competence and leadership skills to take the hard decisions that are needed.
"First, he must avoid knee-jerk cutbacks in front-line services and vital infrastructure programmes vital for our long-term competitiveness.
"Second, he must move beyond the bland banalities of his Budget speech to spell out how he intends to confront Government waste and implement the structural reforms necessary to put the public finances back on a sustainable footing. He could start by tackling the back-office bureaucracy and duplication associated with the 250 new quangos created by Fianna Fáil since 1997.
"Finally, he and his Government must end the sense of drift and present a revised medium-term programme which reassesses tax and spending priorities against the background of the fragile state of the public finances."
On Wednesday Bruton suggested the following to help Ireland's economic situation -
- Bertie Ahern and his Ministers should reverse their decision to pay themselves and top bosses in the public sector major pay increases until real changes are delivered that yield more cost effective services;
- The Taoiseach's Government should now be finding real economies in the administration of public services, not sleepwalking its way into belated and forced cutbacks at the frontline or in infrastructure programmes;
- He should immediately push ahead with changes that will deliver a more competitive public sector - open up the competition in public transport which has been postponed for almost ten years, and separate fully the transmission network from the ESB generation industry so that the new Eirgrid can genuinely select the most competitive and environmentally-friendly generation options;
- Introduce an immediate audit of all agencies and quangos to identify opportunities for consolidation;
- Change the mandate of the Comptroller & Auditor General so that instead of just unearthing waste after the event, he can scrutinize the processes as they take shape;
- Revolutionise the scrutiny of major strategic initiatives being undertaken by the Government so that all of these programmes have a detailed road map with targets, benchmarks and identified costs, and clear lines of responsibility assigned to individuals involved.
Clowen is going down as the worst minister for finance in the history of the state, he is 60% off with his estimates, he can't add, he is doing the economy damage.
Re: Cowen's 10 Billion Blunder - Bruton by
Brandubh on Thu Mar 13, 2008 8:13 pm
Come back Charlie McCreevy all is forgiven.
" title="Very Happy" />
Looks like a few hairshirt budgets are on the way now folks.
At least no one will take Clowen seriously if he says we all have to tighten our belts...
Re: Cowen's 10 Billion Blunder - Bruton by
Cactus Flower on Thu Mar 13, 2008 8:47 pm
As this was foreseeable at the time of the last general election campaign, why did Mr. Bruton and his party fail to mention it then?
To the best of my memory, FG bottled out of any hard questioning of the scale of spending proposed just as it bottled out of addressing Bertie's financial habits.
Re: Cowen's 10 Billion Blunder - Bruton by
Brandubh on Thu Mar 13, 2008 10:09 pm
Cactus Flower wrote:As this was foreseeable at the time of the last general election campaign, why did Mr. Bruton and his party fail to mention it then?
To the best of my memory, FG bottled out of any hard questioning of the scale of spending proposed just as it bottled out of addressing Bertie's financial habits.
They are indeed an anemic 'Opposition' - and they scratch their heads as to why they havn't won a General Election in 25 years?
" title="Rolling Eyes" />
Re: Cowen's 10 Billion Blunder - Bruton by
Auditor #9 on Thu Mar 13, 2008 10:19 pm
FG were more than likely going on in a piecemeal fashion over the last number of years about FF spending but now there's critical mass in the deficit or potential deficit.
What is it due to mainly? The fall-off in tax gathered from house-buying? An increase in public pay? Have imports increased?
This quango list and the powers of the auditor general should be taken seriously. Why do we have so many regulatory bodies if they are neutered? At least they are not gagged but the public only gets to receive information like that through the reports of junkets and failed, expensive projects. And all the public can they really is moan - we have no real decision making power either. It's shite !
Thread on ThePropertyPin on the National Debt Re: Cowen's 10 Billion Blunder - Bruton by
jmcc on Thu Mar 13, 2008 10:30 pm
I still think that if Richard Bruton had been leading FG at the last GE, FG would now be in power. It should be interesting to see how FF copes with an economy that may well be affected by the US recession.
Regards...jmcc
Re: Cowen's 10 Billion Blunder - Bruton by
Cactus Flower on Thu Mar 13, 2008 10:41 pm
The Department of Finance in the days when there was no money failed to see the necessity of raising loans for investment to support development. They were extraordinarily unimaginative and parsimonious.
When there was money at their disposal they still didn't grasp the idea of investment, and getting a social and economic return on it. FF essentially use public finance as a slush fund for buying votes. So did the PDs - Marie Harney trying to blame HSE overstaffing on 'the politicians' and unions was a bit of a joke.
Examples of where the money went ....
Expenditure on public sector wages has gone up because of increased numbers "regrading", bench marking and wage increases.
Crazy vanity projects. More than €30 million on a couple of greyhound stadium stands???
Taxing first time buyers to the hilt but giving massive tax write offs to large scale "investor buyers".
Lumpy public spending on capital projects alongside a housing boom driving up construction costs
" title="Rolling Eyes" />
Examples of where it didnt go -
Broadband and Renewable energy.
Hitskin.com
Portal
