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THE BODY WHICH independently assesses the government’s budgetary objectives has said another tough Budget is needed next month.
The Government can send a strong signal “reinforcing its stated resolve to rectify the remaining weaknesses in the public finances” by adopting a “prudent budgetary stance” the Irish Fiscal Advisory Council has said in its pre-Budget statement.
The body, chaired by Professor John McHale of NUI Galway, warns against any measures that would lead to a return of boom and bust economic cycles, saying…
We are now entering a crucial period for breaking this pattern.Fiscal policy must remain focussed on the goal of repairing the public finances even in the face of short-term improvements in key indicators. This is required in order to underpin a return to sustainable medium-term economic growth.
Finance Minister Michael Noonan has said several times in recent weeks that we can expect a fairly neutral Budget, but the Council advises the Government should stick with its initial planned adjustment level…
Going into Budget 2015, the latest data suggest that macroeconomic and fiscal developments in 2014 have been significantly better than expected. This means that uncertainty regarding the likelihood that Ireland will meet its short-run Excessive Deficit Procedure (EDP) targets for 2014 and 2015 has been substantially reduced.
This is a welcome achievement and means that a full Budget adjustment of €2 billion would most likely comfortably secure compliance with the 3 per cent ceiling in 2015.
The Irish Fiscal Advisory Council is an independent statutory body tasked with providing an independent assessment of official budgetary forecasts.
It comprises of five Council members and a Secretariat of five.
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After 5 years of suffering, mass emigration and austerity, is anybody else getting sick of well-heeled white-collared ‘advisors’ telling the government that the solution to our woes is MORE belt tightening?
I think its a safe bet that none of the Fiscal Advisory Council members children have collapsed in school from hunger, or their spouses been left on a trolley in A&E for 3 days.
They’re advising prudent fiscal discipline. If this government were proposing a give away budget you’d be screaming auction politics.
And I assume your own kids are falling down from hunger to qualify you to give advice?
Just the usual hysterics from a SF employee…
Spot on O’Reilly.
‘SF employee’?
http://www.thejournal.ie/profile/189176/in-fairness-paul-murphy-sinn-fein-stance-oppose-2914804/
O’lielly once again earning his nickname, and trying to label anyone who doesn’t obediently bleat the government spin.
I think it’s fairly safe to say that no amount of auction politics will save the majority of fine Gael or labour seats. Maybe if noonan and his ilk kept their election promises (no water charges, separate private debt etc…) then there would be no need for these semi austerity budget that will be so ‘difficult’ for them.
Spammin, you’re a SF stooge. That is all…
Is it worth pointing out that the Fiscal advisory council aren’t advisers? They aren’t closely linked with the government at all.
Every other serious democracy has independent bodies outside the Ministry of Finance/ Treasury which can offer an independent view on government plans. The UK as the Office for Budget responsibility and fiscal outlook (OBR) and the US has the Congressional budget Office (CBO). These aren’t bodies which try and make policy of advise the government, they just offer independent non-partisan analysis.
The people on the council are good people who would much rather be doing their day jobs of research or teaching. They are doing the job because not having a proper budget process is what got us into the mess. They aren’t economic advisers the government, they aren’t looking to work in the department or for the Taoiseach.
So I feel pretty happy saying you are terrible person.
The Journal is riddled with troll accounts or fake accounts designed to push an agenda. If The Journal stamped down on this there’d be sea change in the level of debate and comment on this.
Has the government ever listened to the Fiscal Advisory Council, another useless Quango.
Its very useful actually.
For who though?
The economy I would imagine. Just because you don’t like the advice doesn’t automatically mean it’s wrong, part of some conspiracy or from vested interests. Unless of course you yourself are an economist, in which case, please share you expert insight
Useful to the Government. This is a Quango that was set up to be the “bad cop”, so that when the Govt don’t do all they suggest, they’re the good guys. Just the normal budgetary kite flying, spin & manipulation so…
Nail on the head Charlie. The agenda has been set and set in Frankfurt. Any advisory group is just a quango to support the illusion that we somehow govern ourselves. Same goes for the minister’s advisors.
The Fiscal Advisory council is just another neo liberal Troika economics echo chamber, that ultimately operates in the interests of the banksters and top few percent.
Mass unemployment remains right across the Eurozone…. but wait, the important thing according to these neo liberal shills of the IFAC is the 3% deficit target of the Orwellian termed ‘Stability & Growth’ pact (which promotes neither).
That would be 3% annual Gov debt accumulation in a ‘fiat’ currency, actually created from thin air. Where there is no justification whatever for paying interest rates above those being paid by non-Euro sovereign currency states like UK, US, Japan etc. Nor is there +any+ long term need to repay the ‘principal’, because these so-called ‘loans’ are in reality a highly useful ‘deposit’ facility, ‘parking’ money, for the Financial sector. That is, the Financial sector want an ongoing deposit facility, analgous to a household bank deposit account, that continues to grow along with economic growth of society. (That is why the Gov bonds of UK, US, Japan, paying interest +less+ than the rate of inflation – ie making ‘investors’ a small +loss+ – are still fully subscribed.)
BTW, I think citizens should know exactly where this 3% max deficit target came from….. it was dreamt up in a moment during a ‘phone call at the Elysee French Presidential palace. The President was being pressed for a deficit limit figure, so he asked an official for a number. ’3%’ was what came back, selected at random. There was not a +single+ academic paper or other study done to arrive at this figure. No research at all to establish why it should not be 4, 5, or 6%, or whether it should be some multi-year average… Or, whether, in a ‘fiat’ currency, it has any real importance whatsoever… considering it is just a ‘number’ in a fiat currency…. some might have thought that conditions in the real economy… oh, say, (near) full employment, might just be a more important metric? (This is 100% true…. as they say… ‘you couldn’t make it up…’ )
All of which, including economists like McHale’s cluelessness generally in the run up to the Financial bust itself,(along with his fellow intellectual frauds) just demonstrates how bogus the state of mainstream macro economics is. ‘Bogus’ that is, as regards the interests of the majority of citizens…..
There is only one reason for the Austerity cuts that McHale and co. continue to call for.
That is because it is what the top few percent elites are insisting on, as it operates in their interests, pushing down wages and conditions, and rolling back the role of Governments in looking after the majority of citizens’ interests. All so that +their+ profits are greater, and they also have a convenient deep ‘bust’ cycle which enables them to buy up assets for cheap,and force privatisations of public assets, again at distressed sale prices. So they can rip you off for ‘rent’ into the future.
This nonsense, and the neo liberal design of the Euro currency system itself, has been going on for decades…
There is no meaningful democracy at all…. mainstream economists and media commentators alike have been educated in a narrow ideologically based framework that works solely for the interests of the top – the Capital owners, Bankers etc. Citizens and politicians are being kept near 100% clueless – deliberately – about how the monetary system (clue, it’s +not+ a ‘commodity’!) banking and the +MACRO+ economics of a whole economy actually works.
It is designed to flow unearned ‘rent’ money ever upwards, in both ‘boom’ and ‘bust’ phases – exactly as we see it doing. And the elites & political classes could not care less about what happens to the majority of citizens.
Brilliantly put contribution Mike. Much appreciated.
+1
Neo liberal design of the Euro currency! Go on outta dat Mike. Throwing big words at around hoping to sound intelligent. Talking through your hat.
-1
Very good posting Mike Hall.
Somehow the cycle needs to be broken – the slow ‘coup detat’ of democracy by the Financial Sector needs to be rolled back somehow although I get the impression its too late for a single democracy like Ireland to change direction (new parties would probably be required).
With the banksters effectively ruling the USA, UK, Germany and other major economies, they would probably have the power to treat any dissenting country in a similar way to Cuba or Venezuela and would be able to sell their stance globally on the basis that a “socialist” Government has been elected in Ireland with little or no economic acumen – next stage is bond rates rise etc.
Jeez, tough decision for FG, do what’s best for the country or make decisions based on the election in 2016………What to do, what to do……………….
All the king’s horses and all the king’s men……………………………………..
The only place that hasn’t had austerity is Leinster house time to bring it on and cut those 5 pensions and those golden handshakes and start running the place like it was in the private sector.
Martin Luther King also had a dream once.
How did we forget those boys Patrick I’m sure they would be more than willing to cough up their fair share .
How much do advisors get paid ? How many advisors are there ? If nobody is listening to them, do we need them ?
Advisors gives the idea that they are walking around government buildings fiddling with the budget or lobbying ministers. That isn’t what they do.
They look at the figures and give and independent analysis so that criticism of the budget can be based off more than political sound bites or analysis from lobby groups. It’s an utter disgrace we didn’t have them until recently.
If nobody is listening to them it’s all the more reason to have them because they offer truly unbiased analysis. How much would you have paid for there being a political cost to being so dependent on stamp duty in the 2000s? More than a few million?
Any economist who proposes cutting the budget deficit in the teeth of a recession is not worthy of the name. It is only the government sector that can act counter cyclically to private sector economic oscillations. This means running a budget surplus during a boom and so draining money from an overheating economy and a larger budget deficit during a bust to maintain aggregate demand and hence employment. The correct budget deficit is one which drives the economy to full employment. Austerity is not turning the country around nor can it ever do so. Austerity takes money out of peoples’ pockets which would have been spent in the domestic economy and so reduces aggregate demand and inevitably leads to job losses and so further reducing domestic spending in a vicious circle.
Austerity is based on the false premise that nations need to reduce their budget deficits and ultimately ‘balance the books’. This is nonsense in a macro economic context. Most countries run a budget deficit most of the time and it makes perfect economic sense to do so. It’s really only the Eurozone countries that are required to borrow their own currency in the market at an interest rate determined by the market. Fiat currency issuing nations like the U.S and U.K do not need to obtain dollars and sterling from the bond markets to finance a budget deficit for example. When they do choose to issue government bonds the primary objective is to implement monetary policy (e.g. drive their chosen base interest rate to target) not as a necessity to raise revenue. In addition, when those countries do ‘borrow’ in the market, they effectively decide what the yield/interest will be unlike the Eurozone nations subject to the tender mercy of the speculators.
In fact with the fiat floating currencies we’ve had since the 1970s there is no need whatsoever for a currency issuing government/central bank like the U.S. or Japan to ‘borrow’ at all in its own currency. They can simply create the currency at will. This is a major factor in why sovereign currency issuing governments actually control bond interest rates regardless of the state of their economies. For example, Japan has a far higher debt to GDP ratio than Ireland and yet its bond yields are much lower. The government ‘debt’ market is in reality an extremely generous, risk-free, interest bearing deposit facility for the large financial institutions and ultra wealthy. Continuing this neo liberal agenda, the Eurozone was deliberately designed to allow private banks (markets) to profit to an even greater extent from member state debt and so allowed them to set the borrowing rate for Euro countries on an individual basis.
We’re not in a recession, haven’t you heard? It’s over. This is the recovery.
However we are still enforcing an “austerity plan”.
The counter-argument to the economic advisors is to now allow some water to the green shoots – this is a very sound policy – a tough budget will kill consumer spending which assists the Irish economy, more taxes (and public spending) will not throttle growth in the private sector.
Tell that to all the people that can’t get jobs
It’s a Pantomime that’s all
- “We need a tough budget”
- “oh no we don’t”
- “oh yes we do”
Etc. etc.
Politicians play their electorate like the fools they know well from the last polling day….. Lube up….
We’re still borrowing almost a billion a month. But the domestic economy needs disposable income to drive on. A reduction in the USC coupled with spending cuts to balance would be prudent…
Social welfare & health is where the bulk of the budget sits. Health is a hard one to argue but there is scope in SW…
Wait for all the red thumbs O’Reilly saying ‘Ah, ye can’t cut me dole’ from some of the usual suspects here
I’m not worried Vocal. They’re not up yet…
There’s 1000s of ‘long term’ dole recipients (people who have been on the dole even during the debt tiger) that need to be forced to sign up to an employment/springboard project or let them ****off out of this country. If they won’t work then they shouldn’t have the right to stay here.
Anyone who is willing, needs the full support of the government, local businesses and training/education centres (schools who run PLCs, training colleges etc).
Too many people here pulling the piss and bleeding the system. You see the country’s underbelly in every village, town and city across the country.
We would earn millions if we cut the practice of letting companies write off expenses before tax.
Save by reducing public sector management. I worked in the public sector, I’ve seen it all. Empower the front line staff and you’ll see such an improvement.
Cut medical cards to people who can afford not to use them. And to those who use them to visit the doctor on a whim.
Stop importing food that we are growing here and exporting at the same time.
Get rid of consultants and pay doctors (who we train) properly and give them a decent working week.
Take control of our natural resources.
Get rid of Or is Water and use the money to fix the leaks.
Remove religion from schools. Use that to me to bring in a new subject such as IT.
There are a thousand things that we can do that will combine to save us a fortune.
But all the above and more, will be useless if we have to pay this debt that isn’t ours
What a load of old shite O’Reilly. You appear to have glossed over the fact that not so long ago your beloved government hit the Dail bar, got hammered and subsequently banged through a rather expensive piece of legislation that converted a promissory note to sovereign debt. I wonder where the fiscal advisory council where when they drove that train at speed through the station.
It might be an idea to get your tiny mind around the fact it was not those on social welfare that ran us up €100billion+. It was a roomful of gainfully employed suit and tie wearing bureaucrats shuffling about with their pants down around their ankles that facilitated that process.
“Prudent” appears to be the word of the day on planet O’Reilly. I suppose it was prudent to see Maire Geoghegan-Quinn off with in excess of €400,000 to help her adjust to life after Brussels. Prudent to throw roomfuls of cash at Irish water to pay consultants and lawyers their cut on the deal. The list of fiscal indiscretions facilitated by those at the top end is long and gets longer with every passing day. Fiscal Advisory Council my arse. It’s a feeding frenzy at the top end and it can’t be any wonder that those on the bottom end of the social spectrum want their cut. The fish rots from the head down boyo.
Tail wagging the dog here.
All aload of crap just to make the government look good come budget day.
Current government expenditure is €1 billion per month above income from taxation. As much as half the population receive more in benefits than they pay in taxes. The combined national debt is north of €200 billion and growing by €1 billion per month plus interest. If your household budget was in a similar state would you be planning a holiday for the kids in Disney Land and a new car, or would you. be signing-up for a tax-free contract in the Middle East to earn the cash needed to clear your debts?
OK, please explain to us less informed how it all works.
he will do what ever his masters tell him for he cares no more for the Irish people than his pay matsers the crown do
Ok then…
More sewer pipe economics from FG…… Sh*te flows down….. If we make the stinking rich, richer then hopefully their jacks spews out something for the masses down the pipe
Whether its FG or FF in power, they will all be faced with the same decisions. As the elections draw closer every party leaves a ‘Hanzel & Gretel’ trail of sweets to try and improve their chances but unfortunately the same decisions are faced. We spend more than we take in. The only big difference for me is that FF put us in this situation, not FG. The day they are back in power is a day too soon.
Just making it up as ye go along lads!!!
Costs of Fiscal Advisory Council going up by about 50% on 2013 costs.
https://www.kildarestreet.com/wrans/?id=2014-01-15a.408
Less than 1 million euro to have real independent analysis of government policy. You realize how cheap that is in comparison to the benefits, right?
If we had a FAC in the 2000s then we would have a respected body saying that the government was dangerously dependent on stamp duty. It wouldn’t have solved every problem, it wouldn’t have stopped the crash. But it would have meant real economists studying the budgets in a hugely important way who didn’t work for the Department of Finance.
Don’t be talking that D 4 banker shite on here, it’s youser fault the country is the way it is, #gobsh****
More scaremongering. Let people think were fighting the cuts and Noonan will look good. Were too long in the tooth for these games now.
ever notice how its always those who are less likely to be affected by austerity who are first to call for it to continue? these guys are probably on something like 100-150k per year or 2-3 grand a week at least, so let the first of any ‘cuts’ to their pay and pensions for a change.
sorry, last line should read ‘let the first of any cuts ,be to their pay and pensions for a change.’
Have a look at the lineup online, all academic cosy Fatcats who inhabit their own over privileged bubble. Full of theory, but unlikely to have any experience of State sponsored misery , and austerity.
Advisor is American English, should be Adviser
And neither useful.
Fiscal Advisory Council needs to lower the bar on our current Finance Minister, Mr. Noonan, for some 2015 Budget Day tax relief for Ireland’s hard pressed tax payers.
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