Sir, – Thank you, Barry Walsh, for highlighting the gross mismanagement of the public finances by our tax-and-spend government (“Taxation and spending policy”, Letters, August 22nd).
Those of us who are old enough to have been through a number of government-inspired crashes in the exchequer finances can only despair. We have seen this movie before and sequels are never great.
Of course none of this discourages the two Ministers charged with the responsible management of taxpayer money from taking every opportunity to tell us what a great job they are doing. In fact, they and their immediate predecessors have blown a gilt-edged opportunity to use what they describe as windfall tax receipts to put in place a programme of infrastructure projects which would benefit our children and grandchildren. The temptation to splurge on current expenditures has been too much for them and they are hardly likely suddenly to discover religion in the run-up to a general election.
The annual circus of pre-budget season is a very tired charade. As Barry Walsh points out, massive increases in current expenditures are a given and we spend months watching kites about “tax cuts” which typically do not even keep pace with the rise in inflation.
It seems to be an article of faith that spending increases or tax cuts can be financed only by increased borrowing or by tax increases in other areas. But hiding in plain sight is the existing enormous expenditure stack of about €100 billion per annum.
There is never any suggestion that necessary new expenditures or reductions in taxation could be financed by cutting out the waste we all know is there. What does the Department of Public Expenditure and (lest we forget) Reform actually do?
A saving of a mere 5 per cent would provide ¤5 billion each year for other more worthy spending programmes, meaningful tax reductions, a reduction in government debt or some combination of the three. It is hardly inconceivable that a root-and-branch review of our public spending could throw up a saving of 5 per cent or more.
In Capitalism 4.0, Anatole Kaletsky writes that it is absurd to equate the quality of government with its cost and continues: “In Britain . . . a reduction in (government) budgets of 10 per cent, spread over three years, is described as a ‘horrific’ squeeze. If the directors of any private company sent their line managers instructions to cut costs by 3 per cent a year, this would not be considered an insuperable challenge, still less a managerial nightmare.” – Yours, etc,
PAT O’BRIEN,
Rathmines,
Dublin 6.