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Public finances require surgery, not butchery

Issued : Thursday 16 July, 2009

The McCarthy Report is a significant contribution to the important debate that needs to take place on the economic options facing us. It is a great pity that the government withheld publication until the Dail was in recess and TDs will not have a proper to debate it until the autumn.

This is a serious report, that merits serious scrutiny and discussion, but it must be said that it is also a report that appears to put a price on everything and a value on nothing. Any analysis of the report and consideration of its recommendations must include an assessment of likely impact on people and communities.

Our public finances require surgery, not butchery.

It must be said at the outset that the report is a terrible reflection on twelve years of Fianna Fáil Government. The fact that so much waste and duplication can be identified, speaks volumes about the way that public expenditure was mismanaged during the boom. Intoxicated on plenty, Fianna Fáil had an agency for everything, and threw money at every problem. The adjustment that must now follow, though necessary, will be painful.

If there is over-staffing of 17,300 in the public service, then the first people to go, should be the Ministers who brought this situation about.

This report is one of a number of documents that are due for publication over the summer, including the Report of the Commission on Taxation. They must be considered in parallel, and a considered approach adopted in the budget which takes account of the need for reform in both taxation and public spending.

There is much in this report that can be readily endorsed. Examples include stream-lining the state’s investment in research, reducing the cost of ICT services, achieving economies in property management, making the courts function on a more rational basis, and rationalising state agencies.

Some of the recommendations are ideas that Labour has been advancing for years. Securing better and more independent evaluation of expenditure programmes, better Dáil scrutiny of what expenditure is achieving, obtaining economies in public procurement – which the report states can save some €300m - and sun-set clauses for agencies are some examples.

While expenditure must be reduced, what is required is surgery, not butchery. A careful and considered approach can produce a better and leaner Government. A slash and burn approach will do more harm than good.

Some of the proposals in the report appear to be ill-thought through. For example, cutting the number of small primary schools in rural areas might produce some savings, but at huge cost to rural communities, where the school may be one of the few remaining focuses of community life. Similarly, the saving of €1m from closing Garda stations is small, when compared to the cost to communities in terms of the sense of security provided. The proposal to stop recruitment of educational psychologists is utterly daft, given the knock-on effect for students and their families, and for society in general, given a saving of only €1.2m.

Labour will vigorously oppose any proposal to cut rates of social welfare. Equally, we believe it is vital to maintain investment in primary education, and will resist any proposals that will undermine the quality of our education system.

This report deserves careful consideration and debate. The Dáil should be sitting throughout July to debate it.