BUDGET ‘FUDGE’ ONLY SHOWED CARE FOR RE-ELECTION AIMS

THE concept of the Budget as an estimate of income and expenditure for a set period has had a slow death: What we are presented with annually is a “fudge it”. Even if the clocks were not going back this month, the sky would still be dark with all the kites hoisted by a Government testing which way the political winds blow.

On its eve, after all the meticulous mathematical planning and financial fine-tuning, the Finance Minister emerged to inform us, fortuitously, that he had located a magi- cal billion from the multinationals. We had been teed-up for a big idea on housing, with Taoiseach Leo Varadkar acknowledging that 10,000 homeless people was an “emergency”. So what has he done? Frankly, not much.

If you are looking for a game-changer, you won’t find one. If there is a “big idea”, it is to win the next election. A little for all. There is some good news for families, and pensioners. But on housing and health, the two critical issues most in need of radical reform, we get more of the same: Throwing more money into black holes without the radical reforms required to guarantee a return is folly, as we know too well.

Budgets can not fix everything, but they ought to be an indicator of Government vision; if there is one, it is myopic and blurred. This is disappointing 10 years after the crash. Housing and health have hardly distinguished themselves in either meeting budgetary or performance targets.

Yet Finance Minister Paschal Donohoe has rewarded both, by sinking billions more into them. This is akin to pumping the tyre without fixing the puncture.

He has allocated a further €2.3bn to the housing programme for next year. Yet how can we know houses will be delivered and if they are, will they be affordable? As we have pointed out before, sitting on sites as property values soar has ramped up demand.

Meanwhile, those reliant on renting a home will be rightly aggrieved as they appear to have been forgotten. The third annual European Buy-To-Let League Table from WorldFirst could not have been more timely yesterday. The group shows how Ireland is now the top target for international buy-to-let. Small wonder, the vulture funds continue to be favoured with low tax as renters are fleeced.

Since the crash, and indeed throughout “the lost decade”, taxpayers understood that it was not about having more, but about making do with less. As Mr Donohoe promises to deliver the first balanced Budget since 2007, does Budget 2019 indicate the necessary lessons have been taken on board? The answer has to be no. The shadow of Brexit looms large, as does the potential for EU tax reform and global interest rates hikes. We can not rely on more “magic money” to be found. What provisions have we made to absorb the impact of any or all of these shocks? This Budget was commended to the House as a caring one: the care it reflects is the Government’s one for its own interest in securing its re-election.

Billions were sunk into housing and health – pumping the tyre without fixing the puncture