Labour ministers resort to bare-faced lies on national finances

“ I want to tell you Claire that that is a lie, and it should be nailed once and for all, now over to Stephen and he is an independent journalist, that isn’t true. The Shinners, the Shinners  and the party that negotiated it, Fianna Fail, come out from meetings and say “well, that’s not what they’re saying to us”. I’m saying that that’s what they’re saying to us and that’s what Fianna Fail negotiated”   Minister for Communications, Energy and Natural Resources, Pat Rabitte on 1^st December 2012, the Claire Byrne show on RTE – podcast here, from 42:00

He was responding to this comment from presenter,  Claire Byrne.

“But Stephen [journalist, guest], can I ask you a question, has it [the property tax] been imposed by the IMF, because the other political parties who meet with the Troika representatives on a fairly regular basis, say they don ‘t care where the money gets the money from, they’re not saying ”

This is what the Memorandum of Understanding with the bailout Troika says with respect to Budget 2013.

It says “Without prejudice to the minimum consolidation amount referred to in the previous paragraph and to the requirements to achieve the agreed fiscal targets, the Government may, in consultation with the staff of the European Commission, the IMF, and the ECB, substitute one or more of the above measures with others of equally good quality based on the options identified in the Comprehensive Review of Expenditure (CRE). “

In other words, we can identify alternatives and in consultation with the Troika, can implement these instead. The Troika, according to the Opposition, are primarily concerned with the deficit between spending and taxation be reduced, and that the country return to a balanced budget. This rings true, but regardless of Opposition claims, the Memorandum spells it out in black-and-white.

And on Friday last at midnight, the Department of Finance published its forecast of Government receipts and expenditure for 2012 and 2013, the so-called “White Paper”. This is the forecast for voted capital expenditure.

The budget for 2012 for voted capital expenditure is €3.6bn. This is OUR money which the Government agreed to spend in the economy in 2012. Estimates vary but seemingly between 10-17,500 jobs would be protected or created for each €1bn of spend.

It has been obvious in recent months that capital expenditure was being reined in to offset overspends in current expenditure, particularly in health and to a lesser extent, social protection. When challenged on this, Minister for Public Expenditure and Reform Brendan Howlin has repeatedly insisted – for example here and here and here and here and here – that no, although capital spend was running behind the monthly profile of budget spend, that by the end of 2012, we would be back on target.

“Information from Departments indicates that the bulk of their remaining capital budgets will be spent by year end. The spending pattern is in line with trends from previous years which show that the bulk of capital expenditure takes place in the last quarter of the year.” Minister for Public Expenditure and Reform, Brendan Howlin on 20th November, 2012 repeating a statement given in September and October 2012, when the monthly Exchequer Statements showed capital spending lagging behind budget.

Now we see that capital spend is forecast to be down €189m on the €3.6bn budgeted. That’s a loss to the economy of about 2,000 jobs.  And this is at the same time as Minister for Health James Reilly is dithering over a messy overspend in his Department, including on drugs and consultants.

Labour  and Fine Gael , together face a rotten set of choices on Wednesday next, and regardless of the bank bailout and bank debt, we must make progress with balancing our budget, but such challenges don’t justify bare-faced lies.