AS I SEE IT
BY MARIANNE HERON
The Government’s Summer Economic Statement puts me in mind of a couple who have mismatched ideas about money. You know the kind, one half is the big spender, money no object character, and the other is a cautious watch-the-cents- sort. That statement – a kind of run up to the Budget – might as well be called Spend or Save (SOS).
The document reflects both kinds of thinking and you can see there will be rows ahead over who spent what. There is money there all right, the couple are the envy of less well-off European relatives, already shivering at the prospect of the chilly Trumpean tariffs ahead. There’s loadsa money – for now at least – it’s just a bit bewildering trying to make sense of the thinking behind it. Is it penny wise or pound foolish?
Of course, spending is needed on maintenance, aka infrastructure. You can’t have housing needs falling apart for lack of water and electricity or due to planning problems. So there’s a whopping €275 billion to be set aside for infrastructure projects in the coming decade, the biggest tranche going to housing and water. There better be, with the annual housing target jacked up from 33,000 homes to 83,00 but who will do the building?
You know the way profligate types like to spend on shiny new toys like a flashy car? Well, there is the future spending on the Metro, with a cool €2 billion set aside for that, just for starters. You can almost hear the pennywise half arguing, yes, I know you need to be able to travel from the airport to Dublin city centre but how about a more economical solution, like extending the Dart?
On the other hand, there are some belt-tightening warnings in the statement. The future may not be quite so rosy. We don’t know how much impact those 15% tariffs on goods going to the US is going to have on our economy or suppose that pharma, which accounts for 45% of our exports and IT industries decide to up sticks and head back to big daddy Trump. Bear in mind here that Foreign Direct Investment is a big pillar in the Irish economy, accounting for 70% of our exports which reached €223.8 billion with € 72.6 billion of that going to the US last year, according to the CSO.
So no, better not to give away too much in the Budget, despite the cost of living crisis – so don’t count on cost of living packages to help tide us over or any double payments of benefits. And don’t expect energy credits like the €250 we got last year, despite rising prices.
The hospitality industry hoped for the delayed cut in the Vat rate to 9%, back from 13.5%; well they can’t count on that, as it might cost as much as a billion euro and the cut has been delayed until next year. Never mind the way 612 cafes, restaurants and gastro pubs closed after the hike to the higher rate.
Then, like some families there are the irresponsible members who make serious holes in the budget. There’s Auntie HSE for instance, with her insatiable appetite and careless accounting. Look at those tens of millions auditors found in wasted money for stuff becoming obsolete and costly mistakes including payments from health insurers written off due to delays, not to mention two different departments paying €700,000 for the same invoice.
Or there is troubled relative RTE, with license revenue down by €58 million due to loss of public trust over the way the station has been run. They will be looking for another €725 million bail-out soon.
There’s the staff bill for keeping the whole show on the road to consider too, the number of civil servants having ballooned to 400,000 and the cost of the increase is estimated at €27.97 billion and how accountable are they about value for money?
We are a great country with a success to be proud of but one that has made us the second most expensive place to live in Europe. It might help if our financially mismatched couple had a spot of marriage counselling or accountancy tuition.
It’s not really fair when one half – that’s us – is trying to make ends meet while the other half is splurging.
