By Fionnán Sheahan Irish Independent
Donohoe practises ‘Bertienomics’: keep shovelling in the cash
Big spender: The Finance Minister has gone from Prudent Paschal to Determined Donohoe.
Then we’d get the real policies on economic development, housing, health and education.
The ones that are being hidden away out of sight at the moment – because of Brexit, of course.
The so-called no-deal Brexit budget was pitched on a no policy change basis, begging the question: what policies?
Like the fellah outside the pub supposedly straining for a fight, Donohoe is being held back by Brexit.
The void of vision is being clearly exposed.
The only ideas being tabled are in the naked pursuit of constituency gain.
The parish pump box-ticking is blatant.
The last budget before the next general election highlighted all the problems of the New Politics and Confidence and Supply era.
In the absence of any political or economic dogma within Government, you get a Budget that attempts to cover too many bases.
The defining character of this Budget shifts from Brexit budget to climate change budget to general election budget.
By failing to land firmly on any theme, Donohoe has resorted to appeasement and hasn’t satisfied any appetites.
Fianna Fáil cleverly didn’t attach any red line to the continuation of its arrangement so will pick and choose what aspects it suits to align itself with.
Donohoe’s 41 references to Brexit through his speech allowed him to cast a hint of caution over his fourth Budget.
He outlined a €1.2bn package to help the sectors most affected by a hard Brexit.
But he’s going to borrow more than half of this money if it is needed.
It’s a bit like letting your neighbour store all their firewood in your living room and then saying you’ll take a loan out from the bank for an extinguisher if the inevitable happens.
Why set up a rainy day fund if not for this scenario?
Brexit is a downpour far worse than Storm Lorenzo.
Businesses are already feeling the impact of the uncertainty of Brexit and having to put administrative preparations in place.
If they don’t have them already, any business dealing across borders immediately needs to register to clear goods through UK Customs, set up a deferred payments account, confirm tariffs to be paid, review contracts with suppliers and appoint a clearance agent.
Donohoe’s economic outlook now resembles that of his Dublin Central predecessor Bertie Ahern.
The dependence on windfall taxes like corporation tax is fuelling the economy like the Celtic Tiger of old. And the Government is running only a modest predicted surplus of €609m this year.
The central tenet of ‘Bertienomics’ was to keep shovelling out the cash coming in and everything will be fine.
The pursuit of reforms in the public service is gone out the window, replaced by the return of the side deal pay claims and overspending.
The lorry of money for the health service overspend is being loaded up again.
Eurostat figures show we spend one in every five euro on health. Our expenditure of 19.6pc is well above the euroarea average of 15pc.
Yet we have one of the youngest populations in Europe. We’re not getting bang for our buck.
Instead of getting to grips with the problem, Donohoe is lauding the euphemistically titled ‘leadership’ of the health service for their efforts in halving the overspend.
The extra €1bn he is providing next year will be swallowed up by this year’s overrun, that funding being spent again next year and next year’s overrun.
The establishment of a Health Oversight Group won’t stop the rot either.
The alternative policy on health is to spend even more on the Sláintecare pipe dream.
Fine Gael spin doctors were gushingly saying the minister was “determined” in his preparations for the Budget.
Prudent Paschal is replaced by Determined Donohoe, who proclaimed the “measures in this Budget strengthen our foundations and deepen our resilience”.
A finance minister hasn’t been this delusional about what lies ahead on Budget day for a decade.
In the draconian Budget 2010, the late Brian Lenihan assured the nation “the worst is over” and it was “going to be the last of the very difficult budgets”.
And he infamously claimed: “Our plan is working. We have turned a corner.”
Unfortunately, right around that corner was a sheer drop off a precipice.
Eleven months later, the country was forced to sign up to an €85bn EU/IMF bailout.
Brexit will potentially be as bad.
The ESRI estimates that over a 10-year period, the costs of Brexit to the economy adds up to €50bn if there is a deal and €100bn in a no-deal scenario.
The British are already drawing up lists of the problems facing this country from Brexit. A worldwide recession is brewing.
Donohoe will no doubt claim his plan is working too.
We’re turning the corner – again – ill-prepared for what’s coming our way.
Brace yourself for the impact.