Daniel McConnell: Spend, spend, spend - but no champagne corks popping

The biggest giveaway budget in history has seen overall Government spending balloon from €87bn last year to €106bn this year and €109bn next year
Daniel McConnell: Spend, spend, spend - but no champagne corks popping

Behal Paschal Expenditure And Minister Michael For Reform, 2021 And At Minister Government Pictured Buildings,dublin For Public Mcgrath Budget Julien Donohoe For Finance Picture:

Spend, Spend, Spend – the clear mantra of Budget 2021.

With a budget day package in excess of €17 billion, the two most prudent men in Leinster House, Paschal Donohoe and Michael McGrath stood up with gleeful abandon and splurged all around them.

More money for health? No problem here’s €4bn.

More money for housing? No problem, there’s €700 million for social and affordable housing.

More money for businesses and workers? How about a VAT cut to 9%, a new fund of up to €5,000 a week for companies forced to shut because of Covid and for kickers, we’ll give the Christmas bonus to nearly all on the Pandemic Unemployment Payment.

The biggest giveaway budget in history has seen overall Government spending balloon from €87bn last year to €106bn this year and €109bn next year.

And the list of goodies just kept on going and going. Michael McGrath doled out the cash on a scale that even Charlie McCreevy would have been envious of.

But unlike McCreevy, there was no champagne on show.

In their speeches, the two finance ministers sought to evoke the spirit of the Irish people in the face of adversity.

“This is not the time for an optimism unfettered to the reality of the challenge that we confront, but it is the time for hope that recognises our challenges, and a hope that strives with the strengths of our economy and our society to succeed,” Mr Donohoe said in his most fluid passage in an otherwise flat speech.

He concluded with a Seamus Heaney quote "if we winter this out, we can summer anywhere” adding: "So, as the evenings shorten and the leaves change colour, we recommit ourselves to the road ahead.”

Mr McGrath quoted no less than former US President John F Kennedy’s 1963 speech to Dáil Eireann when he said: “It is that quality of the Irish, the remarkable combination of hope, confidence and imagination, that is needed more than ever today."

For all the good news in the budget, speaking strictly in a political sense, the extremely muted reaction to it from the opposition and the public speaks volumes as to where the country finds itself.

“It’s all a bit meh. We’re spending €17bn merely to stand still,” was the frank admission from one government minister.

Justifiably, Government spending exploded this year to cope with the immediate and now longer-term consequences of the Covid-19 pandemic and also the looming threat of a no-deal Brexit.

That explosion will continue into 2021 and the two ministers made clear the commitment to continue to aid those who need it for as long as it takes.

“There will be no cliff edge,” was the declaration from Mr Donohoe in his speech and he insisted “we will prevail”.

Perhaps it is easy to make such a commitment when you are able to borrow €20bn this year and €20bn next year to fund this extraordinary splurge.

Paschal Donohoe. Picture: PA Wire
Paschal Donohoe. Picture: PA Wire

Mr Donohoe has been at pains to suggest his good work in recent years in making Ireland creditworthy and economically credible again has made that possible.

But there is a question mark as to how long such extraordinary spending can continue.

Despite the colossal spending increases across the board, the opposition did what they could to poke holes in the package but to little effect.

“It’s crumbs off the table – there’s nothing for renters, people on social welfare or pensioners and nothing in terms of childcare,” was Sinn Féin's Pearse Doherty’s assessment. He claimed the Government could have been “a lot more ambitious”.

“Where we need ambition and vision, we have gotten more of the same, papering over the cracks and trying to limp on. This is simply not good enough for the times we are in. Today was the time to give certainty and set out a new path to rebuild our economy in a fairer, stronger and better way. Unfortunately, this Government has, predictably, failed to deliver that and give that certainty,” he said.

But in the context of the major controversies which have dogged budgets in recent years, the criticism was mild and made little impact, notwithstanding the merits of his arguments especially in relation to helping renters.

His colleague Mairead Farrell on her first budget outing, was combative in her speech, but despite her energy didn’t really land a punch.

“Even working in tandem, these two old beasts of Irish politics have shown they do not have the vision, the ambition or the drive to rebuild the new Ireland we so badly need. Today, almost a century since this island was partitioned and the Free State was born, a new chapter in Irish political history is ready to be written. The bad news is that today's budget does nothing for ordinary workers and families, but the good news is that people should not lose hope. We in Sinn Féin have the policies, the politics and the people to rebuild Ireland, united, fairer and better,” she said.

Others like the Social Democrats’ Jennifer Whitmore hit out at the lack of increased funding for the childcare sector in the Budget, as the allocation will remain at the same level as 2020.

“Hopes for a more public model of early years carer dashed by this budget. Ireland will remain firmly at the bottom of the rankings in investment,” she said.

“Budget 2021 is not the systemic change we need to see to end child poverty. Some tokenistic changes but these will be absorbed primarily by cost of living and fuel increases,” she added.

Ultimately, this was never going to be a budget that would bring a government down and such a lack of danger was palpable on the day which turned out to be a damp squib.

While many ministers have been given plenty of money to play with for the year ahead, serious doubts remain over the ability of several of them to be able to deliver any meaningful progress with it.

The problem for them is that they can have no excuses if they fail. They can blame no one but themselves.

 

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