Donohoe rows back on scathing watchdog rebuke
PUBLIC Expenditure Minister Paschal Donohoe has rowed back on his stinging criticism of the State’s budgetary watchdog.
The Irish Daily Mail revealed yesterday that Mr Donohoe hit out at the Irish Fiscal Advisory Council (IFAC) for criticising what it claimed was ‘fiscal gimmickry’ in the last budget, with the minister describing the IFAC’s commentary as ‘unwelcome and undermining’.
Documents obtained by the Mail show that the minister dismissed the watchdog’s scathing critique of the budget as being ‘crafted to command front pages of papers’.
In December, the IFAC warned that the level of spending in the October budget risked repeating the mistakes of the past and that it would add to inflationary pressures and potentially overheat the economy.
Internal departmental documents revealed criticism by Mr Donohoe and his officials of the IFAC in the wake of its controversial budgetary commentary on December 7. In a note to his officials on December 13, Mr Donohoe said the IFAC’s report was ‘an unwelcome departure’ and stated ‘it undermines a carefully crafted reputation [of IFAC] for authority and impartiality’.
The fallout from the report has led to a fissuring of relations between the IFAC and the Government.
However, asked yesterday about the comments to his officials, Mr Donohoe sought to defuse the tensions.
He said: ‘IFAC are an extremely important organisation here in Ireland and they played a really valuable role in helping us develop the right budget policy for our country.’
Mr Donohoe said figures published by the CSO show that the Government is ‘getting the balance right’ and said falling inflation ‘shows that the overall budget strategy for the country is making a difference to supporting living standards and not stopping inflation from falling’.
The Mail also revealed that, two days after Mr Donohoe’s comments, his department and the Department of Finance proposed cutting by half the daily fee paid to the IFAC chair.
‘I have in all the decisions that I’ve made, as is the case for Finance Minister Michael McGrath, shown full respect for IFAC and supported them in their growth as an organisation. And any of the discussions in relation to pay have now been resolved,’ Mr Donohoe said yesterday. Labour Party finance spokesman Ged Nash said: ‘The unseemly spat between the finance departments and IFAC shows me the watchdog is doing the job it was set up to do after the crash. The council is not a nodding dog for this or any other government.’
‘IFAC played a valuable role’