The leaking of the budget is now as traditional a part of the fiscal scene as is the moaning about how the whole thing is nakedly political rather than financially strategic.
It isn’t that the criticisms are wrong but we do sometimes need to acknowledge that when things don’t change it’s often because we don’t want them do.
As the British are discovering, democracy can sometimes deliver perverse results.
Indeed, on both sides of the Atlantic, reaction against the sneering elites is currently a very powerful political force. Our own elites should pause for thought before they indulge in their annual sneering at the budgetary process. Minister for Finance Michael Noonan and his colleagues are merely giving us what we ask for. Or, at least, giving to those of us who ask the loudest and most often.
How do we reconcile the demands of democracy with good governance? Is there any way of improving the way we decide our taxation and spending priorities?
Can we not set taxes according to some strategic ambition that accords with the will of the majority but does not tyrannise those who disagree? Taking fiscal powers away from politicians and giving it to technocrats, similar to the way interest rates are now set by independent central bankers would appear to be an undemocratic step too far. But the reality is that we have done this already: the annual budget doesn't matter much in the overall scheme of things – €1.3 billion is not that big a deal – because of rules set by Brussels. All of the furore is really the narcissism of small differences.
Steps forward
It would be churlish not to welcome some steps forward. For instance, a commitment to lower the debt to GDP ratio to 45 per cent over the next decade looks good but comes with caveats. First, there is the well rehearsed debate over the inadequacies of our national accounts – perhaps 45 per cent rather than EU-mandated 60 per cent is our answer to this.
Second, this commitment will be for someone else to honour; there is little detail of how we get from here to there. Targets are all very well but it helps to have a well articulated vision of how you intend to meet them. Otherwise all we have are aspirations or maybe just pie-in-the sky. There will probably be another recession some time during the next 10 years: what’s the contingency plan?
Economics gets a bad rap these days, mostly for good reason, but the baby is at risk with the bathwater. Economists do, occasionally, have something sensible to say. Yet again, we see a Government ignoring the soundly based advice that if you increase housing demand, all you will get is higher house prices.
It is beyond reasonable doubt that demand is not the problem: the issue is supply, particularly with the costs of building houses.
Sensible tax
The USC is a sensible tax: it is progressive and broadens the tax base, something we badly need. Its abolition is another purely political exercises that makes little economic or financial sense. In terms of strategic thinking, all we hear is the intention to cut further when circumstances allow. This amounts to a hope that some other revenues will turn up from somewhere. Not much of a plan.
One of the unwritten laws of politics is that you must say and do nothing to offend pensioners. But it is true that we look after the older generation relatively well, better than in many other countries, and that the current State pension arrangements will, over time, prove to be unaffordable.
They may even provoke their very own financial crisis. Younger readers should not count on the veracity of the State pension promise: future taxpayers may not be as co-operative as today’s.
Universal benefits for children, childcare or anything else are rarely a good idea, particularly when you still have to borrow to pay for them.
While we may be moving towards a world where the State guarantees a minimum income, we are a long way from being able to afford it.Those minimum income ideas are being floated as a response to globalisation and the assumed linkages to populism.
It is taken a holy writ that trading with China and other cheap-labour countries, along with immigration, are responsible for stagnant incomes and still high unemployment.
Unskilled jobs
All of the available evidence is the problem is not with globalisation or immigration. It’s the global disappearance of unskilled jobs, thanks to automation: foreigners aren’t taking the jobs, either here or abroad, machines are. Where is the strategic vision for how we are going to face this most fundamental of challenges? At the very least, the lack of resourcing - or even a practical financial plan - for the university sector is negligent in the extreme.
In her recent 'speech that sunk the pound' Theresa May, the new British prime minister, quoted from one of the Tories favourite philosopher's, Edmund Burke, saying that Conservatives learned from him that if you want to preserve something important you need to be prepared to reform it. Burke probably didn't have the Irish budget in mind when he said this, but it is actually quite apposite.
We might be perfectly happy with our budgetary circus but there is an air of unsustainability about both the politics and, especially, the economics. It really is badly in need of serious reform.
Burke, a Dublin born Irish man said quite a lot of sensible things about politics , much of which May and our own leaders would recoil from. In particular: “Your representative owes you, not his industry only, but his judgment; and he betrays, instead of serving you, if he sacrifices it to your opinion . . . Parliament is not a congress of ambassadors from different and hostile interests . . .but is a deliberative assembly of one nation, with one interest that of the whole; where local purposes, not local prejudices, ought to guide . . . the general good”.