Budget farce about to begin

Wednesday 12 December 2012 15.38

By David Murphy, Business Editor @davidmurphyRTE

Irish politicians treat Budget with air of reverence

When people are under pressure it is illuminating to see which values they hold dear.
Last year Norway was stunned by the killing of 77 mostly young people by Anders Behring Breivik. The country’s prime minister gave a fascinating address in the immediate aftermath of the atrocity. Knut Storberget said the proper answer to the violence was “more openness”.

Nordic countries place a great deal of emphasis on transparency. But it is something which many in authority in Ireland don’t sufficiently value. That manifests itself in many walks of life. But the run-up to the Budget is a very good example.

In other European countries, such as Germany, governments publish draft budgets. These are discussed widely, then ministers announce the final measures. No big deal.
In Ireland, politicians publicly treat the Budget with an air of reverence. They claim it is covered by Cabinet confidentiality (which is something of an oxymoron). As the softening-up process begins, some controversial proposals are leaked. If the reaction suggests people might take to the streets, then an offending proposal is frequently dropped. But after everything Ireland has learned from the crisis, is this really the way the country should be run?

The EU-IMF bailout has led to a clash of cultures between practices in Ireland and those of other European countries. Last year, to the horror of Irish politicians, Germany’s public representatives found out first that Ireland was going to increase VAT by 2% in the Budget.

Germany was following its country’s practice of openly debating major initiatives which affect people. While the leak was embarrassing, the fact there was discussion about a VAT hike before it happened did little harm. Everyone knew what the impact would be and politicians had an opportunity to digest the views of businesses and consumers before making the final decision.

So why not publish a draft budget in advance? Perhaps one reason is that politicians fear it would give ammunition to the opposition. But that concern is misplaced. The people who matter most are those affected by the changes – not those around the Cabinet table who agree to them.

The priority should be sufficient consideration given to major changes, with all alternatives explored fully before being implemented.

And yet the annual circus of the Budget happens year after year. Bring on the clowns.

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