Archive for December 4th, 2011

In a traditional world, the proceedings at the EU summit scheduled for Thursday and Friday this week would be largely outside the control of a small embattled economy like Ireland’s and the Budget 2012 announcements tomorrow and Tuesday would be largely within our domestic control. As it happens, the truth is that both are largely outside our control, but that shouldn’t stop the Government pressing the national interest. But as we well know the deficit reduction in 2012 is dictated by the bailout Troika, who after all are patient enough to fund a deficit that will take at least eight years (2008-2015) to eliminate, so we have little freedom but we do have control in Budget 2012 over the mix of cuts, taxes and reforms as long as they end up generating the same financial result. It’s not easy for the Government with so little freedom of action, but in pursuit of some light relief, let’s remind ourselves of the reaction of Fine Gael’s now Minister for Finance to the Budget speech last year when Michael Noonan was in opposition. Let’s see how the following quotations from Minister Noonan just twelve months ago come back to bite him on the bum on Tuesday.

(1) “This is the budget of a puppet Government, which is doing what it has been told to do by the IMF, the EU Commission and the European Central Bank.”

(2) “This budget is in an ironic way a fitting tribute to this failed Administration. Fianna Fáil, like the Bourbons, has learned nothing and forgotten nothing, and it is destined to continue its mistakes in this its last budget.”

(3) “The Government never learned that one cannot cut and tax one’s way out of a recession. One can only grow out of recession.”

(4) “Think of the failure in the third year of investigation to forward a single file to the Director of Public Prosecutions.” [we’re now in the fourth year and ….]

(5) “When, however, bank debt became national debt, the position became unsustainable” [“Hear, hear” chimed in Lucinda Creighton, now Europe minister]

(6) “The Minister will recall that even though his four year plan published two weeks ago is based on a growth rate in 2011 of 1.75%, on 29 November, the European Commission marked that down to 0.9%.” [This year, the Government’s Four Year Plan published on 4th November, 2011 projected GDP and GNP growth in 2012 of +1.6% and +1.0%, the ESRI Autumn 2011 report published on 30th November projected 2012 GDP and GNP of +0.9% and -0.3%]

(7) “We need a fair and just society where the test of any policy is in the answer to two very simple questions  Is it a fair policy and does it protect the most vulnerable in society?”

(8) “Child benefit is down by €10 per child for the first and second child. What has the Minister got against third children? In his speech he stated there would be an extra €10 cut from the child benefit of the third child only… Did some third child beat up the Minister coming home from school when he was a young fellow? What is the conspiracy against third children?” [Minister for Transport, Leo Varadkar indicated today on The Sunday Show on Newstalk radio that in Budget 2012, the child benefit for the 1st and 2nd child should remain flat, but implied that the benefit for the 3rd child would be cut]

(9) “NAMA has destroyed the property market as it has taken everything out but put nothing back. Before leaving office the Minister should call people from NAMA into his office and tell them to put €2 billion or €3billion of property on the market at fire-sale prices. These may be sold too cheaply but at least that would establish a floor in the property market and people would start again. Currently, everybody is watching prices continually falling and nobody will get into the market because they believe prices will fall further and people are waiting until they hit bottom. Somebody must put a floor on this and the only people with a big enough pool of assets is NAMA.”

(10) “I wonder do members of the Government ever feel ashamed?”


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