Government must be prudent after Trump’s madness

This annual budget media frenzy has now developed to the point where you’re entitled to wonder if it’s more about political performance than national welfare substance.

And all this circus tops off with the Ministers for Finance and Public Expenditure, this year that’s Simon Harris and Jack Chambers, taking part in an RTÉ radio interview the morning after which, without fail, produces diddly-squat.

Ask yourself: has anything of even the slightest importance ever emerged from such set-piece ridiculousness? And the answer is, never. Not once.

Having said that, the national budget is still a hugely important matter because it sets out the country’s fiscal ambitions for the next year. And, one way or another, it impacts on the welfare of each and every one of us.

People will make up their own minds, based on their individual circumstances, about whether this year’s budget was good or bad.

Whatever your view is, there is no denying that it involves a massive amount of money (spending of around €126 billion) and we must all hope that the Government, on balance, is managing our finances with some degree of care, and in a way that doesn’t risk another disaster as occurred about 18 years ago with the collapse of the Celtic Tiger.

One crowd that thinks the Government is fairly reckless in its handling of national finances is the Fiscal Council. In a blistering analysis, the Council says the budget is playing ‘fast and loose’ by smashing spending limits and increasing its reliance on high-risk corporation taxes.

The Council repeats an earlier criticism; that the Government will be borrowing huge amounts of money to put into long-term savings accounts and at the same time spending corporate tax windfalls that are unreliable.

In fairness, the Government is in a bit of a bind due to Donald Trump’s madness in the Middle East which has translated into an enormous oil-price shock that in turn has spiked inflation with all the usual consequences. These are real-life issues for us all.

The Government has had to reduce taxes on petrol, diesel and home heating oil to prevent a repeat of the fuel protests which crippled the country earlier this year. All that, including the postponing of higher carbon taxes, is set to cost billions.

That money has to come from somewhere, and it’s not from a money tree out the back of Leinster House. So either we borrow more, or cut spending elsewhere – or both.

These are turbulent and unpredictable times with competing voices demanding fiscal prudence on the one side, while on the other side people are insisting on more tax cuts and higher public spending.

The hope is that the Government strikes a sensible middle course, which is our only hope to emerge with a healthy economy when some form of stability finally develops in the international oil market.