The Return of the King, Bertie Defends the Boom(ier) Times

Bertie Ahern was back in the country after whirlwind speaking stops in New York and Honduras on multiple speaking earners. Senor El Berto was back to talk to an Industrial Relations Conference where he rather unsurprisingly took the gloves off on detractors of his two primary economic legacies; partnership and the boom years. It wouldn’t be Bertie though without the whiff of rough about it.

“If anybody tries to persuade me that it is a bad thing for governments to talk and reach agreements with employers, trade unions, community activists and farmers, they are talking to the wrong person.

“Quite frankly, I have no time for the alternative argument. I do not have any time for the proponents of anti-social partnership. They have been proved wrong,” he said

Quite. It is that hallmark of tolerance that will forever leave him marked out as the man with the ‘inner gurrier’ and the man for whom getting the deal was as important as its contents (or more so?).  El Berto was not done though, not alone were people clearly begrudging his judgement on partnership and the way it saved us from the IMF, they also begrudge his dealing with the boom.

“Those who say we blew the boom forget that in my time as Taoiseach we actually recorded budget surpluses in 10 of 11 budgets.”

He said that his administrations had also used resources to invest heavily in the welfare of people. He said that 80 per cent of the current spending in the 10 years had been allocated to health, education and social support.

“Our approach was the right one, and we balanced increases in spending with the need to reduce the national debt.

“During my tenure as taoiseach national debt was halved and this country paid out €1 billion less in interest payments.”

That is the Bertie we all know, love and still don’t miss. It was the Ahern who had no interest in taking a stance on policy and alongside Charlie McCreevy and Cowen decided that the golden rules which applied were;

1) if you have it spend it and if you don’t you can’t.

2) make sure you have it in the two years before an election.

Yet the above argument fails in a couple of instances. Yes he spent but he did so with a complete lack of accountability. Audit within the health system is still as lacking now as it was when Fianna Fail took office, the increase spend occluded the need for reform.

Ministers still do not know where the money goes and the result is a HSE that can run up billion euro deficits despite budget tightening. No audit was the politically expedient policy with little concern for the long term sustainability of a system now set for cuts back to levels last seen in 2004 or earlier, as if five years of government hadn’t happened.

The government also decided to retain many of the property incentives that we see elsewhere in today’s Irish Times allowed major earners to pay an effective 20% tax rate. This was the government that during the good times didn’t take a look at the kind of tax and innovaiton system we needed for sustainable growth. It was the one that ended up under investing in innovation;

In 2007 less than 1% of bank lending went in to high tech – computer hardware, software and research and development.

Not on my watch, not my fault will be his refrain but the reflection on his tenure will be very mixed. Paying down national debt only to facilitate an explosion in unsustainable private debt is a double edged sword. As is a property boom that was in the government’s best interests thanks to a skewed tax policy. It ain’t all rosy, no matter how much he protest.