Coalition accused of dark deeds by making light of economic woes

Just weeks after the general election, the economic climate has changed substantially and Fianna Fáil and the PDs are accused…

Just weeks after the general election, the economic climate has changed substantially and Fianna Fáil and the PDs are accused of keeping voters in the dark, writes Mark Hennessy, Political Reporter

In recent days, the political agenda has been filled with grim news as the Government struggles to keep rocketing State spending inside its budget day predictions.

Higher charges for State services have been announced, as have curbs on recruitment in the health service. A major Department of Defence contract has also been shelved.

Still smarting from its election defeat, the opposition now argues that Fianna Fáil and the PDs effectively won their Dáil majority by a campaign of deceit.

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The evidence is perhaps not sufficient to convict in a court, but in the court of public opinion there is little doubt that the coalition is now singing from a different hymnbook.

Throughout the election, Mr McCreevy and the Taoiseach, Mr Ahern, did emphasise that the soaring spending of the last two years could not continue and that it would have to settle at 8 per cent next year.

However, the message was wrapped sweetly before delivery to the electorate. Promises of major improvements in the public services could be met comfortably as long as discipline was maintained.

Earlier this week, however, the Tánaiste and PD leader, Ms Harney, warned that spending since January had been "out of control" and had to be reined back.

Speaking in Fianna Fáil's election headquarters in Treasury Buildings on May 13th, Mr McCreevy was adamant. "No cutbacks whatsoever are being planned, secretly or otherwise."

Health would remain Fianna Fáil's top priority in government "even if the economy faltered", though he emphasised that the party's promises were based on 5 per cent economic growth.

On the same day, the Minister wrote to the then Fine Gael leader, Mr Michael Noonan, who by then had begun to turn his party's waning searchlight onto the state of the public finances.

In the letter he insisted that Fianna Fail's spending plans had been fully costed and tested and was categorical in his assurances: "I can confirm that there are no significant overrun projections.

"I'm sure you realise that with a government spending programme of €40 billion this year, some programmes will underspend and others will overspend. I confirm that the overall spending balance is projected to be as published."

Turning to the state of the health boards, he wrote: "I can confirm that the health boards are receiving increases of 15 to 18 per cent each this year, enabling significant service development in each area.

There were no cutbacks being implemented, he said, before challenging Fine Gael's manifesto which promised "public services that are the envy of Europe".

However, Fianna Fáil and the PDs are not the only ones worthy of blame if blame is to be shared out about the level of information given to voters. Judged against the most recent Exchequer figures, the opposition parties' own detailed and often generous manifestos would not have stood the test had they won power.

"The reality is that Fine Gael and Labour would have had to go in and say nine-tenths of our programme can't be implemented for the time being. And get screwed for it," said a former Labour adviser.

During the campaign, reputable figures, including former Taoiseach Dr Garret FitzGerald, and a host of economists and some journalists, flagged the reality that has come to pass. Warning that spending was actually getting worse, Dr FitzGerald warned that a coalition of interests had conspired to ensure that the issue was not properly put on the table.

He believed Mr McCreevy talked down the problem, while the opposition failed to flag it properly because, if accepted, the figures made nonsense of their election promises.

Meanwhile, the Minister had learnt that his efforts to keep the official figures in the black by using profits made from the euro's introduction would not wash with the EU.

The EU's statistical arm, Eurostat, ruled that while the money earned could be spent, it could not be used to brighten up the EU15's current budget deficit figures. Though Mr McCreevy knew this he kept it to himself.

May 13th is an important day in the attempt to verify the truthfulness during the campaign of Fianna Fáil and the PDs, a day when they were set fair for a return to office.

On RTÉ's Morning Ireland, Labour TD Ms Liz McManus warned that health spending was over-budget and that significant cutbacks in bed numbers and services were but weeks away.

Clearly irritated, the Minister for Health, Mr Martin, was dismissive of the Wicklow TD's claim. "Absolute nonsense," he declared, before he repeated Fianna Fáil's list of promises.

Safely returned, the new Cabinet reviewed spending since January. In all, Ministers were told that €300 million had to found. Nothing more than the usual mid-year pruning, says Mr McCreevy.