Department of Finance Strategy Statement Post author By Philip Lane Post date May 10, 2012 Department of Finance Statement of Strategy 2011-2014 Categories In Uncategorized 75 Comments on Department of Finance Strategy Statement ← Nama Scheme Increases Recorded Property Sales Prices by Approximately 7.5% → European Commission Spring Forecasts 75 replies on “Department of Finance Strategy Statement” “Since 2008 pay and non-pay costs have fallen significantly reflecting a fall in staffing and associated supports. This fall in investment in the Department makes it impossible for us to achieve our overriding strategic goals set by ourselves and by the Government.” Some people are indeed stuck in the extravagant mindset of the early 2000s. The Department might start by ditching its monthly deposit trends report which it launched with much fanfare in January and which tried to pull the wool over our eyes by claiming that deposits were “flowing” into Irish banks. They were. In the UK where Bank of Ireland has a JV with the Post Office, deposits were indeed growing. What has that to do with the Irish economy? And if it weren’t for a slip of the slide in a presentation to the IMF we might never have established that the “flowing” deposits were flowing outside Ireland. So much for the Department and its unquestionable obsession with building confidence. Presumably producing this information was properly the job of the Central Bank but the Central Bank would at least be accountable for its information and would need respond to questions on non-Irish deposits. The Department still produces its monthly deposit information though without fanfare since we found them out and can see that most deposit growth is outside Ireland. Maybe if the Department dropped these gimmicks it would have more resource available to devote to important areas of focus. As for the Strategy document issued this morning, the absence of measurable goals is startlingly predictable. Dep Fin has over 100 at Principal Officer level, yet when the Imf came to town we found out they don’t even do regular financial reporting, let blood modern financial control. A redundancy programme is needed, along with hiring of appropriately skilled people – now is a good time to do it. Sad , very sad. It was always a non sovergin balance the books type outfit anyhow. Post 1987 they have become completely addicted on harvesting external credit flows…… even if these sourses are drying up their entire strategy still orbits around this monetary event horizon. Look to the UK but don’t look at their GDP which is the most blunt of economic metrics. Look to their transport data…. which gives a real world indication of how activity can be sustained by a sovergin country in a declining energy BTU envoirment despite its catostrophic investment decisions of the past. After reading the pig headed AECOM / Goodbody rail report they did not once touch on how NIR has record passenger numbers and IR is going into the toilet….. irs a small bloody island lads. Its the Monetary envoirment dummies. If you want to reduce raw material waste while maintaining activity , one of the most effective methods is the production of interest free treasury paper. You cannot “grow” out of this with Bank credit….. you need more BTUs to waste first. These guys are either ostriches or grossly retarded. They will physically destroy what remains of this country for a commercial bankers idea of money. How absurd is that ? So…. they’re having a moan about not having enough budget, enough staff and too much work eh? Welcome to what life’s like in the private sector lads. So we should vote ‘Yes’ to save these guys from having to revise their plan? Could we Junk this term … ” the sovergin debt markets” They are private debt markets , bankers create credit out of nothing to buy “sovergin” debt. This LTRO is a criminal subsidy to worse then useless banks …. a mechanism to bail them out of their catostrophic credit investments via a Yield differential. that extracts deposits from your account. Countries don’t need private markets to sustain their medium of exchange function as they were once independent countries which can legally declare the coin of the realm and its quanity. “We will insist on the highest standards of transparency in the operation of NAMA, on reduction in the costs associated with the operation of NAMA, and that decision-making in NAMA does not delay the restoration of the Irish property market.” FOI for Nama? Lower fees for advisers? No interference in property market? Aren’t these the guys who are imposing staffing reductions on the broader Public Service and issuing edicts for the entire Public Service to do more with less? Looks like the new Head Honcho has been captured by the “we are so special and clever in the DOF that we can micro manage the entire public service (even without any specialist qualifications or operational experience) but we can’t do it without our minions” agenda! @awaaf that would be D/PER youre thinking of there “We will establish a strategic investment bank” How will they know what to invest in if we don’t have enough tokens in the country ?……. there is no flow to speak of … the bankers stopped it dead. Will they make further misallocations of capital ? You Betcha – its a almost certainty. The Investments made especially post 1987 were made in a credit hyperinflationary envoirment where people did not have enough wages relative to their productivity. They will now seek to make investments in a money deflation phase where people again do not have enough wages relative to their productivity. You could not make this stuff up. What a total and utter load of cobblers. Just looking at a few of the 54 – 54! – commitments that interest me and might be of some interest to others: – We will re-commit to structural reforms required to accelerate growth, job creation and debt sustainability Why? Should they not have been fully committed since the initial EU/IMF MoU of Nov. 2010? Are they admitting that they seriously dropped the ball and have let the various narrow sectional economic interests steamroller them over the last 18 months? Because this is as plain as a pike-staff to anyone paying attention. – We will create an integrated decision making structure among all relevant State Departments and Agencies to replace the current fragmented approach of State bodies in dealing with the financial crisis. What in the name of goodness have this lot being doing for the last three years? I suppose this has to do with this half-arsed rationalisation of largely unaccountable state agencies whose proliferation occurred under previous governments to evade effective democratic accountability and to fill the troughs for the various sectional economic interests. – We will establish a Strategic Investment Bank. aka the Labour ‘slush fund’ to reward its clientelist network. But wait its repeated: – We will create a Strategic Investment Bank that will become a provider of finance to large capital projects, a conduit for venture capital and a lender to SMEs. They’ll have to sell BGE’s energy supply business a few times – or else have to raid the NPRF or pension funds even more. What on earth are these expensively recapped Pillar Banks for? – The Government will put in place a parallel, commercially-financed investment programme in key networks of the economy to support demand and employment in the short-term, and to provide the basis for sustainable, export-led jobs and growth for the next generation. Streamlined and restructured semi-States will make significant additional investments, over and above current plans, over the next four years in “next generation” infrastructures in energy, broadband, forestry and water. These investments – and the accompanying semi-state restructuring process – will be financed and pro-actively managed by a New Economy and Recovery Authority (NewERA), which will absorb the National Pension Reserve Commission. OK. So they’re going to swallow the NPRF. And this ‘next generation’ nonsense is really frightening. User and consumers of these services will pay even more through the nose. In addition this NewERA beast is hidden behind the walls of the NTMA as a non-statutory body without any scrutiny or accountability. That’s why the ESB and other semi-states have been able to get awy with economic murder. If or when it appears on a statutory footing, everything will have been stitched up. – We will establish an independent Fiscal Advisory Council (FAC), separated from fiscal decision-makers in government, that would undertake official fiscal macroeconomic projections and monitoring. Its functions would include identifying and advising on cyclical and counter-cyclical fiscal policies and structural deficits; the cyclical or temporary nature of particular revenues; and the need to maintain an appropriate and effective tax base. The Fiscal Advisory Council will be independent of Government and will report to the Dáil and the public. and – The modelling assumptions and inputs of the Fiscal Advisory Council will, as far as possible, be open to public scrutiny and its outputs would be freely available to external bodies, including in particular, the opposition parties. and – We will open up the Budget process to the full glare of public scrutiny in a way that restores confidence and stability by exposing and cutting failing programmes and pork barrel politics. On IFAC, note ‘identifying and advising’. And as for ‘independence’. Yeah, right. About as ‘independent’ as the current economic regulators are. Also note the weasel words “as far as possible” when it comes to inputs and assumptions. And they’re waxing lyrical with the ‘full glare of public scrutiny’ and ‘exposing and cutting…pork barrel politics’. The lyricism is inversely proportional to the future reality. – Specifically, we will make an external appointment of an economist of international repute to head up the Department’s Budget and Economic Policy division. This will probably get a few people here excited. It’s probably the only part of this whole shebang where at least one person will be made better off without making most other citizens worse off. What a way to run an economy. Since 2008 pay and non-pay costs have fallen significantly reflecting a fall in staffing and associated supports. This fall in investment in the Department makes it impossible for us to achieve our overriding strategic goals set by ourselves and by the Government. I wish I didn’t have to be negative but this is a pathetic little document that says virtually nothing about the operations of an organisation that failed when tested by fire but lists 54 mainly budget commitments and details other national policy goals. Performance measures will include among others: Per capita income; International surveys of standards of living; Distribution of income; Levels of employment. – – as if anyone will be held to account. There is a reference to staffing but I cannot find the actual number and the Irish Times didn’t report it earlier in its story. A figure of 636 was used in another document for 2011 which included Howlin’s offshoot. Together with the CSO that is a staff of 1,500. The 600+ are not gathering data but analysing, forecasting, budget preparation, EU liaision etc ‘Impossible’ indeed. This seems excessive for the finance function in a small country. The argument is that boomtime staff levels and pay/pensions are need to do the job well… …a different world In December 2005, 30 members of the European Parliament (MEPs) flew to Hong Kong to “monitor” progress in the Doha trade talks, where they demanded almost daily updates from Peter Mandelson, EU trade commissioner, despite the fact that as parliamentarians they had no role in the negotiations. The total of trips by official parliamentary delegations in 2005 was 43. Three Irish ministers brought an entourage of 21 civil servants to the same meeting. The 24 Irish officials were joined by 16 other Irish freeloaders from lobby groups such as IFA (farmers) and IBEC (business) and representatives from groups on behalf of the world’s poor. If every one of the then 149 WTO countries brought numbers at the same population ratio as the Irish, it would have been some barney! Dipak Patel, Zambian Minister of Commerce, Trade & Industry in 2005, who was the Chair-Co-ordinator for the Least Developed Countries at WTO negotiations Jan-Dec 2005 said: “…the Financial Times has a bigger trade team than our entire trade division.” PR Guy.. Did you help write that pile of fertilizer? For instance “We will do this by providing independent, impartial and well informed advice to the Minister and Government on the most appropriate economic, taxation and budgetary policies to reduce national debt to more sustainable levels. We will also advise on and implement the policies that will ensure that Ireland’s financial system will be able to operate on a stable, sustainable and commercial basis.” They forgot about the bank guarantee and the PN debacle. “Well informed advice” I’d hate to see their other advice… Btw, did they move the goalposts to 2014.. Didn’t Noonan say we would be back in the markets in 2013. @Paul I get the feeling they think investment creates demand…… tokens in my pocket creates demand…… if the investment is not adequate or sub optimal from lets say a resourse usage standpoint it creates inflation of physical goods & services. Why invest if there is no demand ?…… its a relic if the credit hyperinflation era me thinks….. the post 1987 social meme remains – create the demand via credit – it does not matter if it is not there. Look lads & lassies – the banks have stopped the flow in the economy to save their Stock of Dodo credit investments – NAMA is the most classic of these examples. We clearly have a major energy import problem in this country as a result of the physical envoirment created by a multi decade hyperinflationary credit event but you need not kill everything stone dead to stop those imports. You merely increase the base money and tax stuff such as Cars & oil central heating. The problem would be solved without enginnering a major social breakdown to save lumps of concrete. In fact now that I think of it these guys in Goverment should rename their parties the Lumps of concrete party as that is all they are. “completion…of a vibrant,secure and well regulated financial sector” This shows a lack of knowledge of how our system of money creation and deletion operates. Even if bank’s only lent to credit worthy people, someone would still default. This is because what’s in circulation is the principal of the loan and what’s owed back is the principal plus interest. It’s impossible to have a secure banking system in this case unless there’s a significant source of debt-free money in the economy. Cash used to achieve this function. We’re proposing a portion of the money supply should be debt-free digital money. hmm I think I’ve found the executive summary hidden away on page 15. And it’s just three words: “7.3 Enhancing our Resources” Provisional oil imports for Y2011 :8761 KTOE Prov. Y2011 oil TPES (inc non energy) :7058 KTOE Oil imports priced in Euros Y2011 :5.168 Billion (a record) Oil imports Y2002 :10,476 KTOE Oil TPES Y2002 (Inc non energy) : 8,719 KTOE Oil Imports priced in Euros Y2002 : 1.533 Billion. So in Y2011 we imported 1,757 KTOE less oil then in Y2002 yet paid 3.635 billion euros more in return for less economic activity !!! Only a Fiat system and not the corrupt Euro double entry Debt money system can deal with this catostrophic bank credit misallocation of resourses. The 1.8~ mainly credit created private cars on the road need to be taxed out of existence…or at least until it gets near a 1990 figure of 0.8 billion. Our oil imports alone were higher then our food imports for Y2011 of 4.999 Billion… that is not sustainable and when you add in our Nat Gas imports of 1.353 billion…………. We have a dramatic stock and flow problem because of this oil thingy. In conjunction with a positive flow Fiat system a doubling of lets say VRT taxes should rapidly bring some sense to the domestic Irish economy without a destruction of the new currenies value. If the currency value is destroyed we won’t need to tax. Either way the stock and flow problem will be solved. It’s striking that given the crushing of internal dissent during the bubble that an outsider doesn’t make it clear that internal and external dissent is welcome. Of course the old culture still prevails. So anyone angling for a quango or state board appointment or membership of those odd contraptions known as taskforces, steering or review groups, steer clear of this thread. Any negativity is bound to be noted and you will forfeit a handy earner and the honour of being dubbed an ‘expert’ by RTÉ, or a ‘person of standing’ by David Begg, former central banker. Just to forestall some vested interest calling me be a begrudger, I have never asked for anything for myself from an department or politician, irrespective of party. When I was at UCC, I did draft a letter to the DoJ for an illiterate neighbour who wanted to become a peace commissioner. He did get the position. It shows the power and capacity for delusion of a bureaucracy… If an individual or team had their track record they would be afraid to open their gobs… But put hundreds of them together, they will create their own reality and come back and produce something like this… http://www.irishtimes.com/newspaper/opinion/2012/0418/1224314874720.html In an address to the Institute of Public Administration in 2007 on the topic “Building Capacity”, the late John Murray, a highly respected professor of business management at Trinity College, defined capacity as having these elements: The ability to deliver services to meet citizens’ expectations. (This is the function that draws most heavily on managerial competence, as it involves getting work done through others.) The ability to provide effective advice to the political decision-making process. (This reflects the entirely legitimate preoccupation with serving the Ministers.) Then Murray added “ . . . and in a manner that only those living in captured and corrupt systems can fully appreciate, it [capacity] relates to a value base that owes unswerving allegiance to independence, probity and a commitment to speaking truth to power”. I think people are focusing a little too much on the vessel (DoF) and not enough on the contents (54 ‘commitments’). This is a pretty detailed statement of near term government economic policy. Obviously public expenditure is excluded (and ‘reform’ – whatever that means), but much can be mapped back to the PfG and to ongoing revisions of the EU/IMF MoU – and the rest covers territory where the Government seeks to exercise its discretion. There is a concerted effort to put the DoF back as the spider in the economic web. Its traditional control was weakened with the creation of this plethora of ‘independent’ regulators and agencies. And they also lost control of the bodies these regulators and agencies were supposed to be keeping tabs on, because all ended up being captured. For example, the ESB has been out of control for the last decade – and BGE and some of the others haven’t been far behind. And even now they haven’t been brought to heel in any meaningful sense – mainly becasue they’ve being running riot for so long. This is a major downside of having Labour in Government. And it never does Labour any good being obstructive on behalf of what it sees as its constituency. It still attracts all the opprobium and loses seats. But it never seems to learn. It’s in power on average every decade and a half and each time it chooses something different about which to be obstructive. They probably cherish some naive hope that ‘this time, it’ll be different’; but it never is – the only difference is the geographical distribution of the seats they lose. @Cetereisparibus “PR Guy.. Did you help write that pile of fertilizer?” I don’t do fertiliser! But if I did, it would probably be the best fertiliser in the world! It’s almost as bad as the Irish private financial sector. There used to be 4 of them quoted in the FT Weekend newspaper. Anglo and AIB have disappeared and BoI and ILPM are bottom feeding. First, to be fair, have you ever seen such a ‘statement’ that wasn’t populated by hot air, waffle and empire-protection spin? Second, enough of fairness. “Department of Finance Strategy Statement” “Since 2008 pay and non-pay costs have fallen significantly reflecting a fall in staffing and associated supports. This fall in investment in the Department makes it impossible for us to achieve our overriding strategic goals set by ourselves and by the Government.” I was going to go with something like: Wasn’t there a similarly toned parchment about pay and conditions found in the officers’ quarters of the Marie Celeste? but @Paul H has muddied the Sargasso with: “I think people are focusing a little too much on the vessel (DoF) and not enough on the contents” That’s too confusing, hence resorting to: “We Googled it so now we know what it means (after first accidentally selecting Stratford upon Avon, which revealed some nice conference facilities we haven’t visited yet)” This is a pathetic document by pathetic self serving people. Mr Moran has gone Native in less than a year – amazing. If Mr Moran had any balls this document would be saying I need to get rid of all of the eejits working for me whose only interest is themselves . Privatise the whole operation should be what he needs to be saying. There is not a single commercially minded qualified accountant in the staff complement of over 600. Yet they tell us they are managing the finances of the country which has not yet learned what the accruals concept is about. Cash accounting for a Budget of €50 Billion. Unfunded liabilities of Billions of euro are limited to a line of text in the CAG Annual Report.When you cannot add up the figures the story is buried in myriad reports and the Boss gets a pay off and better job in Europe. If any business was operated by this lot the ODCE would have them in the Courts for breaking the Law. Give us a break Mr Moran and do the decent thing and resign to go back to the Fruit Juice bar. @ TRP +1 Could not agree more with your comments except one thing the ODCE would get many years to get its files in order and obtain the evidence etc @ TRP +1 Could not agree more with your comments except one thing the ODCE would take many years to get its files in order and obtain the necessary evidence etc Mr A’s record to date would not fill one with confidence would it I understand the oligarchs and the Fine Gael Landlords Association still have total control of the cabinet and the PS. Should copmmercial tenants,who employ hundreds of thousands of Irish workers, be allowed market rents. be allowed market rents?. Not a good start for the new Secretary General when the first thing he does is try to build a bigger (and better paid) empire. I work in the PS and you’d weep for Ireland to see some of the errors on documents and funding requests that go into the DoF that are never picked up. On one particular major area of infrastructure spending (I better not give too much away) the DoF doesn’t even realise that it inadvertently approves two separate budgets for the same item of expenditure. And, as you can imagine, the service that has the overstated budget gets to spend it in ‘interesting’ ways. @ All The source of this rubbish is the Public Service Management Act of 1997. http://www.irishstatutebook.ie/1997/en/act/pub/0027/index.html Talk about back to the future! The first step in any radical programme of reform would be to question the legislative basis on which work hitherto has been carried out as it has clearly not functioned well. There is not an inkling of either (i) the radical nature of the crisis affecting the country and (ii) the need for a radical approach by way of solution. The impetus for this must come from the Government. ‘We will bring new talent and skills into the Department of Finance’ If only 🙂 Apologies to all the decent follk in Merrion St Couldn’t resist I assume David McWilliams would never be selected by the DoF; Once upon a time I recommended to Kutz McCarthy that the Department of Justice be abolished – as there is no justice in Ireland. Now, as there is no finance in Ireland (that anyone with any will own up to having), and as the IMF/EC/ECB run the place, if the Department of Finance were to be abolished – would anyone miss it? @David Begg Your ‘stance’ on Citizen Michael Hennigan’s ‘standing’ has been noted by Blind Biddy. A public statement on the Vincent Browne Show, in the presence of Citizen Hennigan, will be sufficient. Your ‘wibbeldy wobbly’ stance on the Ficscal Corset is also noted. @Dept of Finance Open the place up. To personnel, information, data, and discourse. DoF should be grateful we’re not Greeks, hanging on to our Euros for dear life and not paying their dues. http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_10/05/2012_441589 This is a very interesting reaction from the Greek public. @John Corcoran – Sandwich-board economists are hardly what the country needs now (if ever). @ TRP I contacted the DoF’s tenders’ section a few years ago seeking a breakdown of procurement spending by major category. The total used be about €16bn annually. I was told that the information was confidential. There appears to be no system to collate cross-departmental spending by category, never mind including local authorities. How can spending on IT, rental, stationary, travel etc be better managed if nobody knows what is spent across the public service? FoI requests are the means to drag some information from the system but some departments ignore them and usually a PQ is replied to with partial information. So with a Victorian era culture in the bureaucracy and an Oireachtas of 216 who are mainly mules rather than race horses, progress if it happens at all is ever, ever so slow. We prefer argument and point scoring to what is viewed as boring process. About €2.5bn can be spent annually in the science area and we are less than 8 months to a new dawn – – recognised internationally as ‘a world class knowledge economy’ – – back on terra firma, its in reality the countdown to another fairytale fading into the ether and nobody, including the mainstream media, wonders about so much money flowing down a sink hole. It is also another metaphor for how a beguiling permanent prosperity was transformed into a terrible dénouement. @David O’Donnell David, Vincent isn’t everyone’s cup of tea. Irish Times today: “I am very happy to debate with Deputy Adams but I do not do the Vincent Browne programme,” the Taoiseach said. The Irish Examiner has a very good editorial today on our well-entrenched national hypocrisies: http://www.irishexaminer.com/opinion/editorial/same-sex-marriages–be-honest-on-how-we-live-our-lives-193510.html Even on what we used to call “the national question” many of us were more pragmatic than philosophical. A great number of us were far more worried about what Britain might pay for our cattle than we were about the plight of the minority in the North. We pretend that Irish is our national language and lavish hundreds of millions a year on trying to revive what is a linguistic dodo. Wasting that money is bad enough, but the time spent in schools pushing an increasingly irrelevant language on disinterested pupils is almost criminal. Currently, the most bizarre instance of this à la carte citizenship is the campaign by some unions against the EU fiscal treaty, even though they insist that they hold on to their very own security blanket —the Croke Park deal. Responding to US President Barack Obama’s announcement that he would support the idea of gay marriage, Taoiseach Enda Kenny, predictably, kicked to touch and said the issue could be dealt with at the constitutional convention. That may be the case, but surely it’s time to acknowledge reality and celebrate the simple fact that some men love other men, that lots of women love other women and that they want to spend their lives together as a loving, married couple? Maybe this could be the issue on which we end our hypocrisy, the issue on which we have the courage to join the reality all around us by not pretending one thing and doing the other. Surely it’s time to set aside the dishonesty that has all but destroyed this country and celebrate love and dignity no matter how it is expressed. @Michael Hennigan We’ve a way to go yet to beat some national hypocrisy: “Six leaders from South Korea’s biggest Buddhist order have quit after secret video footage showed some supposedly serene monks raising hell, playing high-stakes poker, drinking and smoking.” Alternatively, you could simply view it as one way of celebrating Buddha’s birthday. It’s how I do! Apologies to Grumpy for ‘muddying the Sargasso’, but these ’54 commitments’ present as detailed and comprehensive a statement of near-term government economic policy as we’re likely to see. Let’s look first at what they plan to do, and then we can worry about their ability to do it. I would like people to pay a bit of attention to this NewERA beast. As a giant semi-state (and state asset) holding company it is bigger in proportion to the economy than any South Korean chaebol ever was – and they’ve dismantled most of theirs as they rapidly move up the technology value curve. NewERA was developed by FG from a concept advanced a few years back by the ICTU. FG decided to go down this road because it knew it would have to do something about the semi-states (many of which were running riot), but it expected it would need Labour to form a majority government so it would have to come up with something that Labour might swallow. A modification and development of the ICTU’s concept proved to fit the bill. Apologies had to split comment: It, along with this farcical Constitutional Convention and the half-arsed reforms of selected professions and competition policy, comprise the most stupid policy decisions the Government has made. and again: Yet we have hardly a geek from our leading economists. I wonder why? Oh yes, I forgot. They don’t have the resources, they don’t have the expertise, their specialisms are in other areas, it would be unprofessional and inappropriate to pronounce on areas outside of these specialisms, and so on. And so we have a blog on Irish Economy, but large parts of the economic and economic policy are largely ignored. There’s probably a case here under trade descriptions. It should be called “Parts of the Irish Economy”. @ PR Guy Sure, to paraphrase Benjamin Disraeli, every country is an organised hypocrisy. It’s no harm to highlight it in Ireland because it applies across the idelogical spectrum. An Economist contributor has an interesting comment on North Carolina, God (he or she?) and hypocrisy: http://www.economist.com/blogs/democracyinamerica/2012/05/gay-marriage-0 @ All This thread is going off topic faster than most. The Public Service Management Act 1997 is the genesis for the “strategy statement” of the DOF and other departments. It is probably one of the most vacuous pieces of legislation ever committed to the statute book. Departments do not need strategy statements. What is needed is the definition of strategies for particular areas of the economy to which ALL competent to contribute are invited to do so, coupled with the appropriate mix of resources – both public and private – to achieve the objectives agreed. It is a standard feature of the approach to government in Scandinavian countries. What we have instead are strategies established for sections of the bureaucracy which can only incidentally be related to national objectives as these sections are constantly being morphed into one another as a function of the division of spoils after each election. This phenomenon is most evident in the adoption of fancy logos and suitably impressive publicity material which has little to do with the broader public interest. What is most remarkable is not that nothing has been done to examine critically the performance and structure of the state sector, which must start with the civil service proper, but that the need to do so is not, on the evidence, even generally recognised. @trp +2 +3 +4 Its a basic concept. @ DOCM It makes one wonder about politicans when they move from opposition to government. One of Noonan’s advisers presumably wrote the intro but the minister must have glanced through the document. It would have been expected that Noonan would have provided some real world input given the recent history and an official investigation of the department. In 2010, when Robert Zoellick, World Bank president, got a draft of a report on how an economy should recover post a conflict, he rejected it as too academic and instructed the report’s team to give a finance minister in a civil-war battered state a kind of roadmap for action. @ MH “Maybe this could be the issue on which we end our hypocrisy, the issue on which we have the courage to join the reality all around us by not pretending one thing and doing the other. ” I think that would have to be abortion @PH “Yet we have hardly a geek from our leading economists. I wonder why? Oh yes, I forgot. They don’t have the resources, they don’t have the expertise, their specialisms are in other areas, it would be unprofessional and inappropriate to pronounce on areas outside of these specialisms, and so on. And so we have a blog on Irish Economy, but large parts of the economic and economic policy are largely ignored. There’s probably a case here under trade descriptions. It should be called “Parts of the Irish Economy”.” Careful now. Your heading into “this blog’s merry band of malcontents” territory there. Find a mirror and practice a bit of “Do I look bovvered? Does this face look bovvered?!” (btw was that peek, are the predictive text nerds censoring you?) “They don’t have the resources, they don’t have the expertise, their specialisms are in other areas, it would be unprofessional and inappropriate to pronounce on areas outside of these specialisms, and so on.” Do you think that stops them voting? @Michael Hennigan “to paraphrase Benjamin Disraeli, every country is an organised hypocrisy” Very good. Hadn’t come across that one before. @Docm, In the spirit of your comment I have gone though the 54 ‘commitments’. I have divided them into the three broad categories of the EU/IMF MoU – Fiscal Adjustment (F), Bank Resolution (B) and Structural (relating to improving economic competitiveneness and reducing the cost base of the economy) (S). These relate to Colm McCarthy’s injunction “fix the deficit, fix the banks and reduce the cost base of the economy”. There are three which cross-over B and S (relating to the repeated commitment to establish a Staregic Investment Fund and the impact of NAMA on the proeprty market). I have further subdivided the remainder into High Level (or Aspirational) (H) and Detailed or specific (D). This gives B+H – 6 B+D – 13 F+H – 5 F+D – 23 S+H – 4 Much of the high-level stuff could be pulled together to avoid repetition and to provide some sort of strategic to which the detailed actions could be linked. There is little evidence of ‘joined-up’ thinking. But this probably doesn’t matter very much because the B and F categories are tightly governed by the EU/IMF MoU, even if the Government has considerable discretion in detail. And will of course exercise this discretion for politcial ends and to frustrate the intent of the Troika. The S category, though nominally governed by the Troika, is the area where the Government has most discretion and has exercised this to totally frustrate the intent of the Troika so as to pander to the various sectional economic interests affected. And even here, the DoF has little direct control because the biggest element, NewERA, is parked behind the walls of the NTMA. It’ll be interesting to see how this plays out as the EU policy thrust is increasingly latching on to structural reform as the most effective means of counteracting the necessary fiscal adjustment. They will find it difficult to conceal the combination of stupidity, cute hoorishness and economic policy illiteracy they’ve managed with these so-called ‘structural reforms’. 6.Revised Structures in the Department. The new organization chart is very badly designed. Why? There is nobody in charge of balancing the budget, except at the level of Secretary General. This does not make sense. 1.The Financial Office and Fiscal Office should not be separated. There should be a single individual in charge of both departments. Under the new organization, who does one ask to balance the budget? It is not clear to me at all. 2. Why is there a need for a Financial Services unit? Surely this is a duplication of the work of the Central Bank/ Regulator’s office. Again there is a case for making this unit part of the strategy/forecasting unit. The new structure appears flat and not focused. Responsibility for results is divided up into departments. Who other than the SG can say that they have their hand on tiller of the State finances? It will not work. It is designed not to work. @docm “There are three which cross-over B and S (relating to the repeated commitment to establish a Staregic Investment Fund and the impact of NAMA on the proeprty market).” I think Paul and I- scratch that – almost everyone without a direct interest in pretending otherwise, would contend that very rudimentary manipulation of B and S identifies a central and problematic characteristic of Irish governance. @Grumpy, I think you’ll find that governance is every democratic polity is characterised, to some extent or other, by your rudimentary manipulation of B and S. Some of the stuff I encounter in the UK and at the EU-level (and which I try to tackle in other forums) is simply wondrous to behold. It’s just that Ireland operates at the extreme end of this spectrum. BS defines, rather than being a chacteristic of, the process of governance. There are simply far too many people with knowledge and competence whose livelihoods, status and prospects of advancement are dependent on either producing this BS or pretending it isn’t being produced. The key problem is that we have all the trappings of a fully democratic polity – a constitution, fully free and fair elections, elected local governance, a three house parliament – with even a directly elected head of state, a government elected by one house of parliament that is theoretically accountable to parliament, an independent judiciary, a largely uncorrupted, but excessively expansive and generally unaccountable, state apparatus, a free press, a multitude of civil society associations, etc., – but the reality is that we have government, exercising excessive executive dominance, and an excessively expansive and centralised government machine, with both captured almost completely by an array of narrow sectional economic interests and with the elected government almost always being forced to confront voters directly en masse without the effective mediation that a properly functioning parliament and local governance would provide. An enormous volume of BS is required to keep this show on the road. Its production has led to the establsihment of a very large, labour-intensive and profitable ‘industry’. There are no resources, nor any incentive to provide resources, to contest and counteract this overwhelming wall of BS. Most of those who wish to influence the government (or the government-machine) have easy access behind the scenes. Those who don’t have to shift for themselves. Any oppostion in the Dail is simply political posturing and opportunism. And those who see themselves as being outside ‘mainstream’ Official Ireland – in particular those on the ‘left’ – produce their own confection of BS that often seems as if it comes from another planet. And so we are where we are. “An enormous volume of BS is required to keep this show on the road. Its production has led to the establsihment of a very large, labour-intensive and profitable ‘industry’. There are no resources, nor any incentive to provide resources, to contest and counteract this overwhelming wall of BS. Most of those who wish to influence the government (or the government-machine) have easy access behind the scenes. Those who don’t have to shift for themselves.” Just listening to Pat Kenny on radio and it confirms Paul’s assertion above. It appears to me that Pat is blatantly biased in favour of the Yes camp…or am I imagining? Looking at the recent AECOM Goodbody rail report. In its investigation of opening up old / new rail lines it uses a crude scoring & weighting metric without truely understanding the envoirment through which lines would operate. These include 1.Aggregate station catchment population / rail line Kms 2.Degree of integration of rail infrastructure. 3.Quality of competing bus corridors. 4.Competing road type. It takes the Youghal line to one side and declares it has a poor cost benefit. No1 Criticism : It states it has a poor population per route KM with Youghal the only significant settlement No 1.Dork Response : Passenger Train lines work best with nodal population centres… the population per km of a linear line is not very important. Whats important is the population withen a few kms of a station Youghal town has a very concentrated population by Irish standards. It is unusual for a southern market town in that its central population ,Youghal urban has increased its population by 9.3% since 2006 to reach 6,990 while Youghal rural has increased its population by 55.3% to reach 1,202. As for Mogelly ED …well it population may be only 592 but it is withen spitting distance of Castlemartyr with a estimated population in & around its envoirns of 2500~ Killeagh ED has also experienced a significant increase in population of 25.4% since 2006 to reach 1,330. What population straddles the line between Killeagh ED and Youghal (Clonpriest ED 1,060) is of little significance as there is not a station for many miles. No 2. Stockbroker Criticism : Poor integration because it is a branch line Youghal is not a gateway or hub. No.2 Dork Response Midleton is a branch line you dummies , yet it has been a great success. The line goes to Kent station , to the second biggest city south of the border. A line to Youghal would mean more people getting on the train from Kent which means the train would probally become a 4 carriage DMU rather then its current 2 carriage DMU setup – making it a more effiecent service in terms of resourses. Youghal may not be a tradional gateway or hub but it is a tradional holiday spot for the Cork masses – there is a social meme of getting on the train for Youghal. A typical Midleton resident might also wish to go for a walk on Youghal beech on a Sunday, it would be a cheap excursion. No. 3 criticism Decent bus corridors…. No .3 Dork really -when was the last time Goodbody types got on a Bus ? The non expressway services (3 of 18 outbound) run through Moogely which is some miles from the N25 slowing down the service considerably. The Midelton and Youghal town centres are also some distance from the M25 with the envoirns of Corks Parnell Place bus station even now in these austerity times experiencing considerable traffic. A skeleton Bus service always bypassing Mogelly completly would be adequate after a rail line was constructed. Goodbody :And finally the N25 itself , its great Ok … thats true but Cork and indeed Midleton is a long way for a Youghal commuter…the Diesel is not getting any cheaper (although it looks like it will now temporally crash as western people simply get poorer) When or if the monetary system changes the dynamics of this will change dramatically. Also the old rail route is much more direct then the new N25 The general tone of the document is to spend more on the Cork to Dublin line to save 15 minutes or whatever. Ok I have no problem with them putting down good quality TGV rails for this important route but electification ? Me thinks they should first at least try to make Kent a second mini rail hub of some kind – this will subsequently increase the amount of Cork to Dublin passengers as Kent will have a larger catchment with the Youghal line opening. They put the cost of a single track 120km rail line at 3.5 million a KM… given the intact and uncomplicated nature of the Youghal route it should be much cheaper. This simple dismissal of routes using lazy standardized auto man like analysis is sadly very typical of a over centralised Dublin Apparatus who simply don’t know the meaning of the word elegance. Thanks, Dork. You’ve de-railed us once again. and at the end of the list in the DOF strategy document We will exempt farm diesel from further increases in the carbon tax. now isnt that lovely…. The one sector which has a special fuel made for them, which has agents of the state employed at general expense to stop others using that fuel, is given another concession…. @Paul Thanks Paul, I do my best and all. But this growth through car strength thingy clearly is not working – we are entering a second great European dip. That Goodbody report used a standard fuel cost at 1.30 / litre !!! this will only happen in the depths of this forthcoming Summer / Winter European recession as Spainish oil is taken away from the Spanish to feed others. If we can’t have a stimulus all road project money including most of the road mainataince stuff should be directed towards rail improvements & new rail lines such as Youghal. I think its about 25Km~ from Midleton to Youghal so at even 3.5 M a Km thats 87.5 million. Thats chickenshit. People need to realize we will be entering a completly different monetary envoirment soon. We should do the easy Victorian stuff in a modular fashion rather then hoping for superfantastic DART underground thingies. We can therefore keep the skills for when/if we do the big projects. We do NEED a DofF that is fit for purpose and many of the changes were recommended in the Wright report. That siad, my question is how is the economic section goign to overlap/work with the government economic service (under DPER)? Are the DofF setting up a alternitive power structure? Listening to Sec Gen Moran on Rte radio talking with Sean o’Rourke yesterday and in reply to O’Roukes question – ‘Was there anything that surprised you about DOF when you assumed your new role’ – Mr Moran replied – ‘what astonishes me is how hard and how much effort in the form of long hours etc above and beyond the call of duty DOF officials are working on behalf of the people of this Country.’ And this load of drivel is part of the sum of their hard work and ‘effort’ on our behalf? This Country is well and truly ‘goosed’! @vinny, You’re being a tad harsh. Those down the ranks don’t give the orders; they obey them. I have enormous sympathy for those required to put in long hours doing things that are stupid, wasteful and unproductive. The ultimate boss is the Minister – this nonsense of the Minister and his or her Department forming a ‘corporate sole’ remains – and senior officials try to deliver what he desires or to anticipate what he might desire or to steer him, usually, in a sensible direction – but, unfortunately and quite often, in the early 2000s, in a self-serving direction. And the poor saps down the line have to put in the effort – with the minimum of questioning. Departments – and this is particularly true of the DoF – will be able to ‘run’ a Minister who has no real interest or capability and is only focused on the political angles, but they will still have to accept his bidding in most instances. I’m sure several example spring to mind. But they will respect a Minister who has capability and interest – even if they will obstruct him on occasion. The problem is that there is no formal internal or external challenge to much of the nonsnes propagated – and then implemented. In its absence, why would anyone take it upon him or herself. One would want to be a right eejit. @Paul Hunt Your point is well made. I should have clarified that my focus was at ‘mandarin’ level and I also accept that job/career will usually take precedence over fulfilling the effective,in policy and service delivery terms, task of a Department, even though we are currently and for the foreseeable future, very much on a fiscal/financial and economic ‘burning platform’. Most of those in the ranks have commitments and mortgages to pay,so you ‘toe-the-line’. @ Paul Hunt I admire your stamina! However, to take a standard piece of Irish wisdom, if I were you I would not start from here. The difficulty with the Public Service Management Act (PSMA) is that it muddies the waters as far as the distinction between political and administrative responsibility is concerned. That is why civil servants now appear before Dáil committees. The Buckley Report did the same with regard to the status of public servants and public representatives by linking the salary of TDs to that of a Principal Officer in the Civil Service. It is absolutely imperative that this link be broken. @ Michael Hennigan The crux of the problem is that neither side – the “temporary government” and the “permanent one” – have any interest in changing this situation (nor the other vested interests linked by an entirely spurious but cast-iron system of realtivities, including the universities). @ All For an example of a successful (i.e. objective oriented and free of cant) form of government on one page cf. this web page from one Scandinavian country, in this instance Sweden. It would be equally true of the others. http://www.sweden.gov.se/sb/d/3145 Tom O’Connor in THE Paper of Record is not too impressed ‘ Believe it or not, the Government’s No 1 goal is: “A resilient Irish economy founded on sustainable and balanced growth and leading to significant increases in employment numbers.” Can this really be the austerity government of the past 15 months? It has done everything possible not to achieve this goal. Its austerity has reduced the employment rate from 62% to 59% since mid-2009 and driven the unemployment rate from 12.7% to nearly 15%, while GNP fell 3% in 2010 and 3.4% in 2011. Read more: http://www.irishexaminer.com/analysis/reality-gets-ignored-in-latest-strategy-193532.html#ixzz1ub2cCTcN @ Dork Have you come across “the end of energy” by Michael Graetz ? It’s superb. @Seafoid No Seafoid , I have not. Its may not be so much a ending of energy but a transfer of Energy from Euorpe to Pegged $ China , at least for a period. Although a collapse and rebound of global trade caused by a collapse or monetization of the euro could have very weird effects. There are 3 Sumo wrestlers in this Ring and I am afraid the European trainer wants us to loose big as his bets appear elsewhere. The BRICS would have never happened without European wage deflation / capital export / wage arbitrage post 1980…(see that famous BIS paper about where the “excess savings” really came from ) The dynamics are very complex – to predict the outcome one must get into the mind of a slave trader me thinks. @DOCM, I don’t know about my stamina – I just happen to think this document (even if it’s only a not fully formed turd from a factory in the BS production industry) deserves thorough scrutiny, but you seem to be taking a bit of your own advice about not starting from here: “The crux of the problem is that neither side – the “temporary government” and the “permanent one” – have any interest in changing this situation (nor the other vested interests linked by an entirely spurious but cast-iron system of relativities, including the universities).” Even the Indo is weighing in: http://www.independent.ie/opinion/editorial/finance-must-set-an-example-3104807.html I just keep wondering: where are all the economists? We even seem to be running short of them here getting to grips with the multitude of challenges. Is it all just a bit too hard and frightening? If ever there was a time when they should be coming to the fore, this is it. But I think you’ve put your finger on the problem. Keep the heads down, lads (and lassies), and it’ll all blow over. Stick the heads over the parapet and they’ll get lopped off – and the rest of us might end up in deep doo-doo as well. If so many citizens weren’t being confused and gulled by the ‘raid, tax and spend’ brigade and the keepers of the flame of the Mythic and Transcendental Republic a much bigger number might begin to realise that, at the end of the day, they are paying for this entire, expansive state apparatus and the means of keeping Official Ireland in the style to which it has become accustomed – and they might begin to ask: what, exactly,are we getting for all of this? @ Paul Hunt Two obvious conclusions are, indeed, being avoided. The first is simply a statement of fact; that the present system has not worked and re-hashing it on the basis of the lead department fulfilling a statutory obligation dating from 1997 to produce a largely meaningless “strategy statement” is not in proportion to the depth of the crisis. The second is the failure to pose the obvious question; where is it done better? Scandinavia is a good place to start. Oddly enough, the proposal to abolish the Senate may provide the necessary catalyst. The Scandinavian approach is reliant on a much greater involvement of parliaments, a topic close to your heart, in unicameral systems. That and a no vote in the referendum! @ Paul Hunt In case any one has missed it, Sweden, with a population of over 9 million, runs its central administration with a civil service staff proper of 4,350 approx! As can be easily imagined, there is no difficulty in distinguishing between those responsible for policy formation and those responsible for its implementation. The latter is carried out through agencies which recruit staff with the necessary “skill sets”, to adopt the modern buzzword. These are far too complex to be boiled down to a simplistic choice – as in the Indo leader- between “gereralists” and “economists”. But the main problem remains that of the general failure to recognise – right across the body politic – that a radical crisis requires radical solutions. Unless, of course, the population knows otherwise and the crisis is less deep than it is touted to be. @DOCM, Let’s start at the end. There is a deep and long-established resilience in the Irish population. Despite economic hardship there is a resigned ‘mend and make do’ attitude and an expectation of ‘muddling through’. Generally in terms of historic levels of prosperity, health and well-being, most people are better off than they’ve ever been. In addition, as is always the case, this crisis, like any crisis, is impacting in a variegated manner. And all human life is there. There are huge variations in perceptions and expectations. This is not a seedbed for radicalism. And Irish people are generally ‘conservative’ – with a small ‘c’. They are proud of, and happy with, the full trappings of a democratic polity. The parts they use – fully free and fair elections and TDs as mini-ombuspersons (in their wrangles with bureaucracy) and as constituency advocates – work to their satisfaction. These are the ‘efficient’ parts they encoutner on a regular basis and seem to treat the rest as being, if not ‘dignified’, possibly ‘decorative’ – until, of course, a policy decision is made that annoys enough of them. But, generally, those who exercise power and influence are able to go about their business without any effective scrutiny or restraint. And a whole ‘industry’ has emerged to shield, rationalise and justify their activities. An extremely expansive and centralised (let’s ignore the recent perverse acentralisation) state apparatus provide opportunities for employment and serves to reduce possible friction between the ‘clients’ and the ‘providers’. Furthermore, there also seems to be a lingering preference for a benign dictatorship or a benevolent despot. Many people seem to be prepared to accept An Taoiseach’s pre-eminence and a cabinet tyranny once they are comfortable they can end it at the next general election – and elect another taoiseach and cabinet to operate in the same mode. Perhaps, as is often noted in Britain, a majority of people prefer the ‘smack of firm government’. A government that is purposeful and determined, even if wrong-headed, may be preferred to procedures that might restrain it – since these could be manipulated by unrepresentaive political forces or lead to ‘gridlock’. Finally, the only sustained opposition to the status quo is presented by what I describe as the ‘raid, tax and spend’ brigade and the by the keepers of the flame of the Mythic and Transcendental Republic and many citizens seem to be able to maintain a lingering affection for these fantasies in their hearts while marginalising them in their heads. Adding all this up and it looks like ‘steady as she goes’. At the end of the day, it just happens to be galling for those of us who see the potential to make reforms that would advance prosperity and well-being and to ensure a more equitable distribution of opportunity and outcomes. But that’s our problem; not anyone else’s. @ph “at the end of the day,, itjust happens to be galling for those of us who see the potential to make reforms that would advance prosperity and well-being and to ensure a more equitable distribution of oppurtunity and outcomes” Can you say what these reforms, in a general way, might be, and how they might be achieved, or at a minimum advanced. @Gearoid, I suspect you’re new here (unless you’re Baron Adams in diguise!) – and have not experienced the pain of reading numerous comments of mine on almost innumerable threads, but my focus is on reform of governance. Get this right and many good things will flow from it – particularly in the economic policy area. In essence it involves re-balancing the powers of the Oireachtas and the Government and the re-establishment of effective local governance. My comment here: http://www.irisheconomy.ie/index.php/2012/05/13/an-independent-irish-economic-advisory-service/#comment-281630 might give you a flavour. Ultimately it for enough citizens to demand change – and those they elect will follow (for fear of not being re-elected). @ PH Thanks you for that succinct answer. Therein lies the problem, how to persuade enough citizens to demand change. The political landscape is not encouraging, or are we innately as a society given to supporting, always the tooth fairy. I think we need something fresh on the political scene. Comments are closed.