If what the Sunday Business Post claim is true, the Government has committed a profound breach of trust with the Irish people – a breach which should be urgently investigated by the appropriate Dail Committee.
The SBP’s front page article on November 17th – ‘Revealed: Secret Deal to Spin Budget’ (behind a paywall) – claimed to have had sight of a secret memorandum which
‘ . . . reveals that the coalition agreed a communication strategy with the troika to present different accounts of the budget to different audiences . . . a nine-point communications plan was agreed by both sides which emphasised their agreement . . .’
Apparently, the plan, which was laid out one week before the budget, was to present the budget to the Irish people as a €2.5 million adjustment while at the same time telling everyone else outside the country that the adjustment was in fact €3.1 billion. In any other country there would be outrage at a deliberate attempt to mislead – whether it was to a domestic or international audience. I know this, had a Chief Financial Officer presented different company accounts to creditors and shareholders he or she would be cleaning out their desk by noon if not becoming the subject of a legal investigation.
This explains the fudge over the adjustment in Budget 2014. I highlighted the potential for this in a post before the budget. However, the SBP shows that this fudge went beyond providing cover for the Labour Party (who was publicly demanding a lower adjustment figure) or part of a general pattern that started with this Government – where there is considerable evidence that there has been more public spending cuts than the Government has owned up to.
If the SBP story is true, it reveals a deliberate plan to mislead – a plan carried out with troika participation.
It has been extremely difficult to ascertain the actual level of adjustment in Budget 2014 (an example of this is when the HSE claimed the budget imposed cuts of €1 billion on the health sector, even though the Government claimed it was €666 million). The Government publicly claimed the adjustment was €2.5 billion but in theEconomic and Fiscal Outlook they refer to ‘additional resources and savings’ of €600 million which are not detailed. However, the Fiscal Advisory Council refers to these ‘savings’ as ‘temporary and once-off’ – which means that, in truth, this can’t be sold as part of fiscal consolidation package of €3.1 billion (you don’t consolidate a temporary measure).
The SBP article claims that the secret memorandum outlines the ‘additional savings’:
- Special dividends of €250 million
- NTMA savings of €250 million
- Disposal of State Assets: €150 million
- Central Bank surplus of €20 million
- Live Register savings: €150 million
The memorandum goes on to state a further €80 million in measures need to be found.