Bertie Ahern on the Economy: ‘Euro Eroding Competitiveness’

Bertie Ahern was delivering a speech to IBEC today where he admitted that since 2002 our competitive position has been considerable eroded by the strength of the Euro and price rises. He is still talking positive on the economy as it “enters a period of transition” but with consistent downgrading of expectations by major institutions he is perhaps going to need to parse down his own positivity. Ahern has begun with Cowen and the HSE to send clear signals that this years’ budget as well as that in the coming years will be far tighter that we have seen in the past ten years.

This is unsurprising considering that the income to the exchequer from construction and stamp duty, for so long that which fuelled the boom and sustained budget increases, are now in extreme contraction. As Keith has pointed out over at A Random Walk, it seems unlikely that this situation will change with the plummeting of sentiment among managers in the sector.

It is interesting then that he begins to talk of fiscal prudence to the same audience that last week began to embrace a model of Keynesianism which would spend into the impending budget deficit so as to help promote economic growth. However at a time when our population is highly overdrawn and overborrowed our government are clearly signalling that they intend to stay as debt-free as possible in the coming years. That debate is likely to be thrashed out in another month or two as we face cuts to front line services.

One particular line that gets me however is the following;

“But we must also ensure that the resources that are put into these assets are efficiently allocated and are achieving value for money. We need better performance information, more meaningful indicators and more precise measurements.”

The government has negotitated numerous social partnership agreements without a care in the world being given to audit, the tracing of money as it goes through the departmental spending system and onto the frontline. Lack of audit affects services in very real ways, it obscures those areas where money is needlessly spent and doing very little, it obscurse those parts of the bureaucracy where money becomes trapped and wasted, it obscures those whose delivery of services is bloated and inefficient for the money that is going in. Vitally is prevents the measuring of new and innovative ways of spending and distributing funds to the ends of government policy.

The entire concept of audit is bound up with information gathering and analysis. The government in this country is notable weak at gathering and maintaining the sort of information and metrics which assist in the audit process and ensure prompt delivery on policy thanks to a better system of government. Audit is not a concept of ’small government’ but one for people who believe that a government needs to deliver what it promises in the best way possible for public and public servant alike. This government has repeatedly failed to take those lessons on board and implement those changes when it was most necessary to do so, as budgets ballooned.

It would be fine if this is something observers as well as government have remained ignorant of but there are numerous texts on both our model of delivery as well as specific sectors (notably the health service and immigration) where audit has been highlighted as a clear and necessary addition to the current system. Ahern and FF after ten years in government spending the biggest budgets ever is only now worrying about audit as the money dries up.

It seems a completely different position to that presented in May by most parties, very few were talking about losing competitiveness, losing tax revenue and managing down expectations on service improvement. Even less budgeted for it in their estimates.