Although the principal members of the new Fiscal Advisory Council provide their services pro bono, the Council still manages to rack up costs of €0.5-1m per annum through its employment of economists and a “secretariat”. The Council was created at the behest of the bailout Troika, and the intention was to provide the State with an independent judge of government policies and their effect on the economy. It has been an unmitigated waste of money and attention since created, with its first reports acknowledged by the Government and then dismissed and ignored. The Council had been recommending faster “fiscal consolidation” or in layman’s terms bigger budget adjustments with more taxes and cuts.
Unlike its UK counterpart, the Council doesn’t provide independent predictions of the economy, it merely issues top-level advice to Government. The Council should have resigned last September 2012 when it issued its second pre-Budget report, which was the second to be dismissed by the Government, but no, they’ve held on.
This morning, the Council issued its second post-Budget report, and lo and behold, it now thinks the Government was right to ignore its previous recommendations because, given the provisional economic figures for 2012, the State is doing far better in its journey to reach a balanced budget. So, not only is the advice of the Council ignored but, as it turns out, it was rubbishy anyway.
The 100-page report is here, and a quick perusal begs the question about its purpose. In summary, it thinks the Government, using the required budget adjustments in the Memorandum of Understanding is on the right track. Do we seriously need to spend between €0.5-1m per annum for this? Is this what the Troika had intended when it inserted the creation of an independent council into the Memorandum?