The Government is loaded, but don’t ask what they’re doing with it By Fergus Finlay WHAT would you do if someone gave you €13.6 billion? I know the standard answer — you’d probably add a few bob to it and pay your debts. But when you stop to think about it, it's a lot of money an awful lot of money. Even if you had a lot of parties, and invited all the neighbours to each one, you wouldn't make a hole in the first million. Even if you gave them all a car to drive home in. €13.6bn. This is what it looks like when it's set out in figures €13,600,000,000. Do you get the picture? It's almost too much money for any of us to get our heads around. It's actually the equivalent of around €3,500 for every man, woman and child in Ireland. There's no doubt about it, if you were the Government and you had that amount of money available to you, you could solve an awful lot of problems. But guess what? That's exactly the amount of money the Government can expect over the next few years. I'm talking about extra money, not the money they spend at the moment, or the money they raise in taxes. This is extra money they're going to get, year on year, from now to 2010, adding up to the astonishing figure of €13.6bn. What must the Government do for that extra money? Nothing. Zilch. Nada. They just have to count it. They don't have to raise taxes, they don't have to rob a bank (and there isn't a bank big enough to give that kind of heist anyway). They just have to sit and wait, and the extra money will roll in. This is the good news the Government doesn't want us to know. They're afraid we might want some fairly urgent and pressing problems dealt with if we find out. But it's the truth. That enormous pot of extra money will be available to the Government over the next few years. Where's it going to come from? It's not magic, it's the fruit of economic growth, the direct extra payoff to the state from a rapidly-growing economy. Last week, the Central Bank published its annual report. A dry old document, it has to be said. I'd seriously recommend it to anyone who's having difficulty getting to sleep at night. It has an awful lot of sentences like "The former aims at assessing short to medium-term determinants of price developments, focussing mainly on the assessment of current economic and financial developments and the implied risks to price stability." But in the course of publishing the report, the governor of the Central Bank, John Hurley, had some almost jolly things to say about our prospects for future economic growth. Pointing out that the economy had grown by more than 5% from 2003 to 2004, he went on to say: "Looking further ahead, most indicators would point to the Irish economy continuing to grow strongly at a rate of about 5% over the next few years. As a very open economy, the performance of Ireland is significantly dependent on the global economy, the prospects for which are broadly favourable." Now the Central Bank is not given to making jolly predictions about the future. I've often thought they were afraid the politicians would go mad altogether if they gave even the slightest hint that there were good times coming. So, when the Central Bank predicts that our economy is going to grow at the rate of around 5% a year, you'd better believe that that's a reasonably conservative estimate. Now, at the end of 2003, our GNP (one of the usual measures of the wealth of the economy) stood at around €112bn, according to the Central Statistics Office. It has already grown very fast, as you know in 2000 it was €88bn. At around 5% growth a year, it will increase to almost €160bn by 2010. That's a growth rate of between €6bn and €8bn a year. And guess what? Without lifting a finger, or raising taxes by as much as a cent, the Government takes a third of that extra GNP every year in its existing taxes. I'm not arguing that that's a bad thing far from it, if the extra money is spent wisely and fairly. But I do think we should all know that it's there. As I told you already, the Government's share of that extra growth, by the time we get to 2010, will have amounted to €13.6bn. And that's a conservative estimate. Money beyond the wildest imaginings of any government in my lifetime. The capacity to solve any problem we want to, or at least to address the major priorities. SO, when they tell you they can't afford it, it's codswallop. When they tell you that improving essential public services will only lead to extra taxes, that's scare tactics. Properly managed, there is more than enough money in our economy to address any social issue we want to. That's the rub, of course. Proper management. We have more than enough evidence to know that this Government is incapable of managing the wealth of the economy. There are ministers in this Government you wouldn't send to the shops to buy a jar of coffee. They'd bring back the wrong change, they'd buy the wrong brand, and they'd spend half as much again on sweets. And this is the crowd that has just awarded itself a huge pay rise. I've always believed the labourer is worthy of his hire, but if this Government was subject to performance pay on any objective criteria, it's a pay cut they'd be looking at. But given half-decent management, there are issues crying out to be dealt with that could be fixed overnight, and without making a dent in the extra money that is flowing into the Government's coffers from our extra wealth. At one end of the scale, for example, it would cost almost nothing to put a properly resourced and run home help service in place, with a decent career structure to attract people in, so that elderly people could live in the community with dignity and choice. At the other end of the scale, we could make real inroads into the accident-and-emergency crisis, in the only way that will work by opening public beds in our hospitals. This week the Tánaiste announced a hare-brained scheme to pour public money into the building of private hospitals on the campuses of our public ones. Even if they get built on the scale she is proposing, which is highly doubtful, it will only happen if the already very rich private medical sector gets tax breaks and cheap land. And they will concentrate heavily on elective work, leaving the emergencies to the public hospitals. Every bed they build runs the risk of draining the best medical, nursing and non-nursing staff out of the public sector. We can afford better than that. And if the Central Bank report tells us anything, it tells us that we have earned a better service from our Government than that, too.
Wednesday, July 20, 2005
€13.6bn budjet Surples
Article from Irish Examineer by Fergus Finlay. Interesting points raised about the budjet surples the government is going to get due to increased econmic growth. But as is expected from Fergus "I am the Labour Party" Finlay it is quiet scadding of the Goverment. So what could this 13.6bn be spent on well i think it could be spent on a lot of things. if I had this money to spend I'm not sure roads health servicing the national debt are the ideas that come to my mind. However as we have the second lowest debt to GDP ratio in the EU maybe we should just focus on the roads and health.