Writing here five months ago, just after the Budget, I pointed out that we should not allow ourselves to be misled about the scale of the deterioration in our finances that had taken place during 2001, adding that in the absence of any explanation of last year's €2 billion shortfall, it was difficult to take, without several grains of salt, the revenue buoyancy figures for the year 2002, writes Garret Fitzgerald
And I concluded by saying that in this situation we face the need to raise taxes by the end of the year.
I am afraid that in what I wrote then I under-stated the scale of the financial crisis we are now facing. During the past two weeks I have tried to make up for this understatement by arguing here that in view of the sharp deterioration in our public finances during the first four months of this year, this is now the key issue to be faced by whatever parties form the next government.
However, clearly few in politics, and so far as I can see, equally few outside politics, want to hear this message. What I have written evoked virtually no echoes from the contestants in this election until yesterday's unconvincing denial of any problem by Charlie McCreevy and little enough by way of echoes in the media, including The Irish Times, until yesterday's editorial.
This gross failure of our political system to face its responsibilities during this election debate must currently be generating something like despair among our public servants, as I know is the case among economically literate people outside the political system.
Let me briefly recap where we now stand. Last year the Government lost control of public expenditure. They spent €800 million more than they had budgeted for. Moreover, despite the fact that the value of GNP in 2001 fell short of the forecast level by only one half of one per cent, public revenue turned out to have been overestimated by €2 billion - a huge miscalculation for which no explanation has ever been vouchsafed.
Perhaps because of this, already this year we are seeing a repeat performance. Within the first four months current public spending has been allowed to run €500 million ahead of this year's budgeted rate and revenue from income tax and stamp duty are once again short of the forecast level - by €600 million already. Just one-third of the way through the year these developments have already produced a yawning gap of over €1.1 billion between budget and likely outturn. Nothing has so far been done to halt runaway spending, while our short-term economic prospects offer little hope of a reversal of the revenue shortfall.
This means that the underlying overall deficit already present in this year's budget - a black hole that was artificially plugged by a one-off raid on the Central Bank and the Social Insurance Fund to yield €1.25 billion -- is already topping €2 billion with eight months of the year still to go.
The Minister for Finance who has to bring in next year's budget looks like facing a multi-billion deficit that will require extremely drastic action in the form of spending cuts and/or tax increases. Listening to the political parties, reading our papers, or viewing television coverage of the election campaign, no one could possibly know that this is what now lies in store for us.
This election is taking place in a dream world, which may be about to become a nightmare. The key election issue, which should take precedence over all others, is surely what kind of government will have the capacity and the guts to tackle this crisis promptly and with sufficient toughness to save us from a quite unnecessary debacle that we do not deserve.
As to who should form the next government, the most one can say is that while poetic justice may seem to require that whoever got us into this mess be given the task of getting us out of it, common sense tells us the opposite. For what is abundantly clear is that Charlie McCreevy is in fact the last person who should be let back into the half-wrecked china shop of our public finances.
I say this without animus. For years I admired his courageous, and at times almost solitary stand, against his old political leader, Charles Haughey. He is full of ideas - some of them good ones. True, I disagree with his right-wing politics and with his attitude to the EU, but those kinds of disagreements are the stuff of politics.
But I cannot allow that personal regard to obscure the fact that, especially in the past 18 months, he has shown himself to be the most disastrous Minister for Finance since Charles Haughey played that role behind the scenes, disguised as Gene FitzGerald, during the period between December 1979 and June 1981. That 18-month period two decades ago was wasted covering up an appalling financial crisis that could, and should, have been tackled during the course of the year 1980.
The recent 18 months has, I believe, matched that earlier period in terms of the scale of the financial debacle that has been unfolding before us, although in fairness I have to say that this time it has not been covered up.
And I am afraid I have no confidence in Bertie Ahern's willingness to tackle the McCreevy problem. Our Taoiseach has many good qualities which do not, however, include any evident willingness to confront personnel issues of this kind. We now are in desperate need of a tough Minister for Finance, willing to tackle the dreadful financial mess left behind by the present Minister.
The Opposition have certainly not distinguished themselves by their failure during the election campaign to address the financial crisis. But a Finance Minister drawn from the ranks of the Opposition - and there are several able contenders for this post - would, unlike a re-elected Fianna Fáil government, be unhindered by a need to play down a crisis brought about by the present Government. Such a person would thus have some chance of getting our affairs into order in time to proceed by 2004 with the kind of plans that all our parties have been busy drawing up to improve our public and social services. In such a change of Finance Minister now lies our best hope.