Republican News · Thursday 22 November 2001

Coalition budget bluffing

BY ROBBIE MacGABHANN

The government has confused increased spending with better management of the state's resources

Everything is changed. In the space of a few months, the bullish optimism, the arrogance, the endless hype are all no more. Rising job losses, unemployment and falling tax revenues have all deflated the posturing of the Fianna Fáil/Progressive Democrat government. The coalition suddenly find themselves on the back foot going into an election year, when their fifth and final budget should have put the gloss on their government they find themselves on the defensive and facing up finally to the much more serious issues that had been ignored for the last five years. Or then again maybe not because this government have shown little grasp of what is the economic reality in the 26 Counties and on the island today.

The first serious glimpse of what is going to happen on Budget day and set the government's economic agenda for the next year came last week when Dublin government Finance minister Charlie McCreevy published the coalition's spending estimates for 2002.

For the past months, the coalition cabinet members have been pumping out their empty wallet message, like a parent telling their child there won't be a big present this Christmas.

While this is all very well, it is strange that so little attention is being paid to the cause of the empty wallet. In fact, it has taken the coalition partners up until now to admit that there actually is a recession, with Employment and Enterprise minister Mary Harney being the last to admit the truth.

So what did the estimates tell us of the coalition's strategy? The big news of the £17 billion plus of spending was that the coalition will be borrowing £790 million, to make up the tax revenue shortfall. Spending cuts in some departments are on the cards, as are a slow down in vital capital spending projects.

The government expects an average of 155,000 people to be unemployed next year, with the economy only growing by 2%. In terms of the election, spending on health and education is set to increase by 13% in a series of voter friendly measures, such as highlighting the increase in doctors, nurses and teachers.

Mind you, we are still waiting for the Dublin government to unveil their actual health strategy. Still at the spin doctors getting the final gloss it seems.

The other tactic of government has been to hype up how much of their total spending is going on the public sector wage bill. £8.8 billion is the answer, in case you were wondering.

What is not highlighted is the amount of money, or lack of it, being put into our ailing infrastructure. For example, take the key areas of roads, public transport, regional development and telecommunications.

Just over £700 million is to be spent on roads, with another £478 million on public transport initiatives. Not far off, another £100 million is earmarked for transport spending in Dublin.

Mary O'Rourke was quick to trumpet this spending, telling us how capital investment on transport had increased by 700% during her term in office. What she neglected to tell us was that this spending is actually making up for years of government neglect.

Also absent from her analysis was any assurance that this money would be well spent; the CIE signalling inquiry has highlighted huge gaps in responsibility in O'Rourke's department and there has been absolutely no sign shown that the government is willing to face up to these issues.

O'Rourke talked of the 275 new buses for Dublin Bus, 200 for Bus Éireann, 38 new DART carriages etc, but what was barely mentioned was the measly £125 million provided for the development of broadband infrastructure.

It makes sense to maybe think that she believes that ESAT, Eircom and others will develop this infrastructure, but the development up to now has been haphazard and ill planned with the West and North West overlooked. Even if there is only a need for £25 million, there is nothing being done to assure that the government is on top of this vital issue.

This is perhaps the core problem with the spending outlined in the Budget estimates, that's all they are - spending figures. The plan, the vision, the recognition of the problems to be faced and the strategies to tackle them are absent.

This is the great flaw of this government over the last four and half years. They have confused increased spending with better management of the state's resources. They have failed to show they actually can think past the PR angles of the many social and economic problems afflicting our society.

Finally, one interesting part of the public service wage bill is the 18% increase in the wage bill for Senators, TDs and MEPs. In all, the Leinster Hosue Budget is set to grow by 30%. All will get an 11% increase in travel expenses with a 29% increase in TDs' allowances. The poor cousin Senators will have to make do with a 26% increase. It is so good to see the government leading by example.