Burton argues for budget reform

Today’s Sunday Independent is interesting for what appears to have been an in depth interview given by Joan Burton. The interviews is here and the analysis here.
Among the items which have been picked up is that the Minister admitted what many believe is obvious and said that Ireland will need a second bailout, she also took a gentle swipe at constituency colleague Leo Varadker. There are those including Veronica, who feel that such interviews and indeed other disagreements on policy are best kept to the Cabinet table.

More notably form a political reform perspective is one part of the interview which has attracted less attention which is her views on opening up the budget process. The Budget, of course, is an example of the extreme executive dominance in Ireland and of course of the Minister for Finance can even keep his own leader in the dark until the last minute on changes which dictate much government policy.
Burton has called for the information and the options (some of which found their way into the Bundenstag) to be published openly well in advance. That would be almost revolutionary from an Irish perspective. She also said that the detail should go to parliamentary committees “Each committee should take all of the option papers and look at the options wherever they came from.”
If this were to happen and the committees had power to make recommendations then this would go a long way to rebalancing the various arms of government here. After all if the Bundestag can debate out budget in advance why should not our own TDs?

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14 thoughts on “Burton argues for budget reform

  1. I wouldn’t be holding my breath about such real issues as this being discussed at the recently postponed Constitutional Convention – (Taoiseach has yet to meet the Opposition like he promsed before Christmas). What about the political system that got us into to this mess? We bloggers seem to exude a sense of powerlessness. One guy was told to get lost on this blog because “this is for theory – if you want action go to Dame St.”
    Not much joy there for those people wanting change. re. Ms Burton What about Stephen Donnelly and yourself and a few others getting together to prevent FF taking all the Labour seats which will be going abegging after the next election.

    • Of course I meant going abegging during the NEXT election local or general;

      Wouldn’t a new party led by Joan Burton and Stephen Donnelly have educated straightalking to go for it at least?

      Cardinal Kenny has just given us all general absoulution “You are not responsible for this crisis”.

      Bad news is we are all responsible.

    • Usual tripe from minister. Ramples on about a ‘non problem’. No mention whatsoever about the actual predicament; excessive debt (caused by unregulated emission of credit) coupled with declining incomes (personal and state). So she defends measure that will further reduce both sets of incomes – and we will emerge?

      Government has to say clearly, bluntly and finally: “The government will only fund day-to-day expenses from taxes – no more borrowing! No more deficit budgets!”

      This would mean that the problem we face would never arise again. This has a probability of -1.01!

      Politicians seeking re-election have to have ‘bags of goddies’ to hand out at election time. Appearing with an Ollie Twist begging bowl – and whining, “Please taxpayer, may I have some more taxes!” is likely to get you very short shrift indeed.

      Brian.

  2. The Minister has effectively recanted from the remarks she made to the Sunday Independent, or what she claimed as their interpretation of her remarks, on the second bailout issue on today’s ‘Morning Ireland’ and declared herself in full harmony with the views of Minister Noonan and the Taoiseach on the matter.

    On support for reform of the budgetary process, both the Irish Independnet and the Irish Times published editorials in early December decrying the ridiculous ways in which the Budget is framed in Ireland and demanding change. These leader articles were provoked by the leaks’ campaigns in which Minsiter Bruton and later, Minister for Health, James Reilly had seemingly engaged with various newspapers in the run up to the Budget.

    Perhaps it was understandable frustration with the budgetary process that inspired these Ministers, or their advisors, to resort to either planting speculative stories or engineering the circumstances in which such information on cuts to child benefit and health cards entitlements came to news media attention at that time? But it was both politically ill-judged and anti-democratic in its effects, which I am sure would have been contrary to their intentions. Personally, I am fully in agreement with Minister Burton’s views on opening up the Budget process in line with the practice in most other EU countries. But then, so is everyone else including the two main broadsheet newspapers in the country.

    Minister Burton needs to convince her Cabinet colleagues on this point in the first instance, since it is they, and only they, who can make the decision and one which, from various comments made by the Minsiter for Finance during the Budget process, they are quite open to. My argument in the post over the weekend is that, in her position, she is best placed to put forward her ideas on how this may be achieved at the Cabinet table where she is likely to have greater influence on hearts and minds than by airing her views through the columns of the Sunday Independent, which may, regretably, only have the effect of alienating her colleagues in government.

    • @veronica,

      As usual, your observations are astute and perceptive, but, perhaps, you have missed the irony of the government, projecting the optical illusion of allowing the representatives of the serfs to perform some effective scrutiny of fiscal policy and, possibly, of being able to exercise some restraint, having a messy public debate about how this might be achieved, when they have absolutely no intention of allowing this optical illusion to have any substance whatsoever.

      The representatives of the serfs should be demanding this; and the government should be responding to this demand. It is not for government to decide how much of the workings of government the serfs or their representatives should be allowed to see and affect. It is for the representatives of the serfs to decide, subject to the requirement to ensure effective governance securing democratic legitimacy.

      The chain of command is back to front. That’s what got Ireland into this mess – and it will struggle to extract itself while this chain of command remains arse-ways.

      • Paul,

        You are arguing for the primacy of parliament over the executive or, at least, an end to the executive dominance of parliament, with which I agree. It seems to me that this will require constitutional change (?) although a lot could be achieved on the fiscal policy, as Jane Suiter points out in her post, by simply taking Joan Burton’s suggestions on board. It seems like the vast majority of parliamentarians don’t care much about reforming the Budget framing process, unless they are members of the PAC or Finance Committee. So the impetus for reform is going to come from the Minister for Finance of the day in the first instance. From various remarks he’s made in the Dail over the past few weeks and his colleague, Brendan Howlin as well, I think, neither of the parties of government are averse to opening up the process.

        The Sunday Indo is a campaigning newspapers and there’s nothing wrong with that, so long as readers and contributors – including various columnists and political interview participants – remain alert to that. For the moment the paper seems to be latching onto a ‘second bailout is necessary’ campaign; on which opinions are divided both amongst politicians and economists as to either its necessity, practicality or the wisdom of broaching the issue in the public domain at this point. For members of government, there is a particular difficulty as anything they say publicly is likely to be picked up by external interests who not unnaturally are going to wonder abotu what is the real position of the Irish Government, which may give rise to all sorts of unintended consequences that would nto be in the country’s best interests. Which is why there’s an old convention, as I understand it, of Ministers not commenting in public on the briefs of their government colleagues. Or at least being circumspect in those comments and, in particular, knowing what the score is likely to be when going so far as to entertain a journalist from a campaigning media outlet with its own specific agenda to a wide ranging interview on a host of issues external to your own portfolio of responsibilities in front of a roaring fire in your own front parlour.

  3. @Veronica,

    “..neither of the parties of government are averse to opening up the process.”

    Oh dear. Not you as well. Please confirm that they haven’t been successful in pulling the wool over your eyes. There are only two reasons why the Government will ‘open up the process’ and neither is related to ensuring the process is conducted in the public interest. The first is to project the optical illusion internationally, and to satsify the Troika, that Ireland has a ‘world class’ budgetary process. (All governments are into ‘world class’ arrangements or ‘best international practice’. We used to have ‘world class’ bank supervision and financial regulation. Look where that got us. And, believe it or not, they would still have us believe we have ‘world class’ policy and regulation in all other sectors. And as for the few limited areas where it might fall a tad short, all that is needed are a few tweaks here and there What a load of cobblers.)

    ‘Opening up’ means that the Oireachtas can see and ‘debate’, but not touch. They will set out what they propose to do – and what they have decided to do. Then, having released some data and information in a modern version of the ‘dance of the seven veils’ and allowed a decent elapse of time for a debate, they will whip the lobby fodder to enact what they had decided at the start. The second is where they might not have decided in detail and they want to fly a few kites. This also provides an opportunity to entrap the opposition factions in to supporting what they have decided – or force the opposition factions to come up with such hare-brained alternatives that they lose public credibility.

    No government anywhere will voluntarily make arrangements for effective scrutiny of or restraint on their activities – and this is the case particularly, as in Ireland, when they currently endure no effective scrutiny or restraint. This has to be imposed on them. Anything they concede voluntarily will be worse than useless. Who in their right minds would fashion a rod for their own backs?

    We want the old Veronica back, please 🙂

  4. Paul,

    I’m afraid it’s the same old Veronica you get all the time!

    The way I see it is simple: either we have total revolution or incremental progress on a number of fronts. ‘Total revolution’ does not imply violent uprising or social unrest per se. What I mean by it is that there is not just parliamentary reform – strengthening the powers of committees, abolition of hte parliamentary whip, reform of the Seanad, establishment of a Fiscal Advisory Council with teeth, constitutional amendments to lessen the power of the executive etc – we also, simultaneously, need to fundamentally reform local government by reducing the number of councils and devolving responsibility for services provision to the new revamped authorities and, third leg of the stool, make electoral reform a priority.

    Incremental reform means to me that whatever can be extracted from this government should be grabbed with both hands. That includes reform of the budgetary process. Total revolution may be preferable but, as a resolute pragmatist, in the meantime I’ll settle for whatever can be got.

    All that said, neither the present Dail, Government, nor the people of this country, are clamouring for the ‘total revolution’ formula at this time and certainly not in one big bang moment. I believe the situation would have to be catastrophic for such an appetite for such wide ranging, and potentially disruptive, reform to take hold. My personal view is that the side effects of what’s going on are bringing more than enough catastrophe to bear on the lives of so many people that no-one could reasonably wish such an exceptionally large dose of catastrophe that would risk dismantling the vestiges of civil society at large.

    Also, I’m not disposed to view this government, nor the one that preceded it, nor any that may yet follow it, as comprising some sort of ‘conspiracy’ against the people. At the end of the day, their hearts are most likely in the right place in wishing the best outcome for this country even if, at times, their heads, their notion of political priorities, and their judgement are all over the place.

    • @Veronica,

      Phew. That’s better. Yiou had me worried for a while 🙂

      I too am an incrementalist. My focus is on what is necessary to encourage enough people and their public representatives to claw back some power from government. Once the process starts it will become easier – reversing the process used by governments, over time, to emasculate the Oireachtas. It’s an argument for some balance. The balance has tipped too far in the directon of government and its agencies.

      I have no desire to see a ‘revolution’ or the ‘catastrophe’ that might provoke it. Nor do I view government as a conspiracy against the people – though I would apply this to all large companies (until they proved themselves not to be). And I bear Lord Acton’s dictum in mind. The worrying aspect is the extent to which government, the government machine and the quangocracy have been captured by narrow sectional economic interests.

      Some struggle is inevitable within defined rules and procedures and using adversarial disputation based on facts evidence and analysis. The smothering, suffocating ‘consensus’ among ‘stakeholders’ that government and its agencies promote to suppress any possibility of conflict between various interests does serious damage to the interests of a majority of citizens and consumers who are not represented in the process.

  5. It crossed my mind at the time of the Bundestag incident back in November that the government would be forced into making some changes. The risk of further future embarrassment will ensure this if nothing else, that is unless they want this to become an annual event, with the Irish public and parliament learning of upcoming budget details from the Bundestag every year! (at least while we’re still in the bailout programme, which may well be quite a long time). Obviously, the Troika will demand plans for tax and spending before they hand over money. And, naturally, the German government, as the biggest contributor, will want to know these too. And, consequently, the Bundestag budgetary committee will then have a right to this information. It doesn’t make good PR when foreign MPs know such information before our own Dáil. Presumably, our government doesn’t have the power to cut off the information supply to their budgetary committee or silence German MPs! 😉 So, if for no other reason than to save some future blushes, I have a feeling that budgetary details (at least those given in advance to the Troika) will be released much earlier to the Dáil next year! 🙂 I hope, though, that reform of the budgetary process and Dáil involvement goes several steps further than merely the earlier release of plans given to the Troika.

    • Finbar,

      Interesting. What you’re saying is that, yet again, the pressure of external events will force reform of the budgetary process. Our lot will have to give up some of their power, which is what all this budget ‘secrecy’ is largely about, in order to be seen to retain their power of choice and control over fiscal options. The Bundestag incident was the game changer as up to that moment not even the most experienced pundits, like the Indo’s Brendan Keenan, were aware of the extent to which information was being transferred and open to scrutiny and prior approval by lenders. With the cat out of the bag, there’s no alternative for the government except to change the way it does the business.

      • @Veronica
        That’s it in a nutshell. It seems the EU commission has a legal obligation to distribute such documents to all 27 EU governments. That might not be so embarrassing if such information remained strictly with those governments. But recent German constitutional court rulings, late last year before our own budget, bolstered the role of the Bundestag budgetary committee in EU bailouts. Essentially, the German government needs their approval with regard to bailout decisions, and they are therefore also legally entitled to any such info (the tranches cannot be given out without them seeing such documents). And it’s not so easy keeping a diverse group of 41 German parliamentarians quiet! And some of their comments last year didn’t particularly indicate that they would be prepared to do so. One commented to the effect that, while he understood the sensitivity of such information, this was the kind of information we’d just have to share given that we were now in the bailout programme. Another commented that there was no reason German MPs had to be informed of such information before Irish MPs! I suspect there’ll be an element of making a virtue out of necessity in any reforms to the budgetary process here.

  6. There cannot be an ‘incremental reform’ process with respect to fixing our disasterous fiscal situation. Its as daft as saying I will incrementally break the eggs to make my omelette. You either break ’em or you don’t.

    Budget reform, or whatever you want to call this, has to involve a constitutional prohibition on deficit budgets for day-to-day spending. This forces the government to extract enough revenue through taxation, to pay for day-to-day expenses. Borrowing for day-to-day spending must cease. Borrowing for long-term infrastructure projects will have to be on an interest-free basis. Please don’t dismiss this as idiotic. Its math based, not ideology.

    Clearly such a drastic change would be most difficult to put through. But the alternative (leave things as is) mandates we never exit from this fiscal mess, except:

    1. We ‘grow’ exports by 7% per annum for the next 10 years.

    2. We issue a sovereign default notice.

    [The idea that we may exit, in a decade, is so ludicrous that it beggars belief. But that’s a story for another time and place.]

    Its one or the other. If you want to dispute this with me, fine. But you had better explain how you intend to grow G*P at a faster rate than our debt is compounding. Its not mathematically possible, but you are welcome to try. That’s the predicament: the math.

    If this matter of constitutional prohibition is not on any budget reform proposal, then the reform proposal is one big sack of political bullsh*t.

    Brian

  7. BW is right. We need something a bit more chunky in the increment than “you will see the numbers a lot sooner, you can ‘debate’ them, but you can’t change them”. Philip Lane has posted on migration patterns on Irish Economy:
    http://www.irisheconomy.ie/index.php/2012/01/16/net-migration-patterns/

    The Irish economy is settling in to a ‘stagnation equilibrium’ which occured previously for a few years in the mid-50s and mid-80s when emigration eased all sorts of pressures and the ‘comfortable majority’ were, well, comfortable. This equilibrium is only temporary, but it may be sustained for quite a while. Eventually the reality that it is not sustainable indefinitely forces some change. In the late ’50s and the late ’80s it was senior officials (and others) persuading senior politicians to implement a major shift in policy.

    This time we have the Troika, but it may not have the desired effect. The Government and its senior officials, of course, will convey the public impression of being compliant on the top-level targets, while retaining discretion in detail – and there will be the usual ducking and diving to try to pull the wool over the eyes of the Troika, but the underlying stance, particularly among the senior officials, will be defensive and reactive, rather than pro-active and forward-looking as their predecessors in the late ’50s and late ’80s were.

    The required policy changes will have to come from within, but the prospects are not auspicious. But, one way or another, they will be forced eventually.

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