Fine Gael Budget Proposals

Fine Gael have released their budget proposals (though presumably not in time for the government to adopt many of them). The detailed financial breakdown of the proposals is at the bottom of the press release. There are a lot of proposals in here and they are, inevitably, a bit of mixed bag. For now, I will merely brandish a yellow card for unsportsmanlike behaviour at the idea that we can “save” €500 million in infrastructure spending by funneling it through an off-balance sheet vehicle.

8 replies on “Fine Gael Budget Proposals”

@Karl Whelan
I think you’re being a bit harsh. A verbal warning would have sufficed. NAMA is 130 times worse. The government will have crashed the entire country off the balance sheet soon, while half the media applaud and most of the other half tut tut.

Normally, opposition parties put forward alternative proposals at budget time in order for the people to see how much better they would govern the country.
It would seem to be a rather superfluous activity at the present time.


The idea is that investments in energy, water and telecoms should be financed ultimately through commercial activity and consumer charges, not through taxation. This is considered fairer and more efficient in most advanced economies. I would agree with your “yellow card” if FG had proposed to move investment in schools and roads off balance sheet (because these are more cheaply financed through Government borrowing repaid by taxation), but this is not what is being proposed here.


I know what the idea is Andrew and you always do a good job of defending it. But we’ve been over this a few times before. Most of the investments proposed are not profitable commercial investments and will only “break even” under optimistic scenarios and definitions of breaking even thay ignore inflation or costs of capital.

It’s not uncommon that government capital investments can generate revenue back for central government over time. But that’s not enough reason to pretend this isn’t real money really being spent by the government.

Interesting how FG don’t support a Carbon levy while there is broad support elsewhere for it (Labour, ESRI etc). Especially as FG have proposed cutting PRSI to encourage hiring, so they could have proposed for the two to balance out.

It is quite dispiriting to observe the amount of time and effort that goes into preparing these submissions – this appplies not just to the FG submission but also the TASC and Labour Party submission – when, even if they had been submitted well in advance, the Government would either have ignored or urinated copiously on them.

On occasions, as part of my work, I have the opportunity to engage with government and state company officials in states that, in effect, have one party government. Recent examples are Russia, China, Egypt and Syria. During informal, social occasions the conversation frequently turns to consideration of systems of governance as much of my work involves energy industry restructuring and the application of independent regulation. Some wonder and bemusement is often expressed at the western developed democracy luxury of having a “government-in-waiting”. It is generally seen, and this is the case particularly for the Chinese people I engage with, as a waste of valuable resources.

For many years I have advanced the idea of a “government-in-waiting” as a necessary cost to exercise democratic constraint on the executive. However, given the unfettered power exercised by the executive in both Ireland and Britain, it is becoming difficult to sustain this argument. Most other developed democracies have developed some system of checks and balances. These do not exist in Ireland – and this is part of the reason we are where we are.

Huh, a reference to NAMA and the evils of the current govt? What the….

Quick question: re the 10k redundancies. I don’t see any ‘cost’ side to that equation, so is it just included in the whole mix or what? Given that its gonna have to be relatively generous, this is obviously going to be a very large amount of lump sum money, as well as increased social welfare payments etc. Would be nice to see a bit of a breakdown on it.


FG is proposing a carbon tax, at €20 per tonne. The proceeds from this and other tax broadening measures will be recycling into cutting taxes on employment, as recommended by the Commission on Taxation.


My main point is that criticism that these investments are “off balance sheet” as if this was some type of accounting trickery is misdirected. These investments will be on the balance sheets of commercial state companies, where they should be and where you’d likely to find them in any advanced economy. You will find very little investment in water, telecoms or energy financed by Government borrowing in any other EU-15 country.

Assessment of whether investments in broadband, the eletricity grid and water will be profitable over time depend, of course, on any number of assumptions, such as oil prices, growth in demand for high bandwidth broadband and other matters. But I would make a number of observations:

(1) These are the sectors identified over and again by the NCC as imposing high costs and contraints on exporters;

(2) Regarding the electricity grid, the main proposal is simply to accelerate the timescale of the Grid 25 proposal prepared by Eirgrid, to take advantage of the spare capacity in the economy;

(3) 34 local authorities in Ireland pump over €1.3 billion a year into providing water to Irish households and businesses, over half of which leaks into the ground. Reorganising water delivery under one single commercial water authority to invest now to upgrade the entire system makes perfect macro-economic, micro-economic, environmental and fiscal sense.


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