Why is Paschal Donohue ignoring all the expert advice on the Budget?

I think it's useful to record what the institutions and experts are telling the Minister.

I could not find any international commentary. If anyone has any links, I would appreciate them.

Brendan

The Institutions
The Irish Fiscal Advisory Council

The Government’s medium-term plans are still not credible and the Government needs to develop a credible strategy. Link

The ESRI

we believe it may be necessary for the Government to run a contractionary budget in 2020 to prevent the economy from overheating. Link

The Central Bank

A prudent budgetary approach is critical to ensure the economy has sufficient resilience and policy has room to manoeuvre – Link



The Commentators
Philip Lane – former Governor of the Central Bank

Lane tells government to run a 'significant' budget surplus Link



John Fitzgerald

Budget 2020 proposals may not be the right answer

if there is no sudden Brexit shock, the appropriate budgetary response should be to take money out of the economy to reduce demand pressures. The current plan for the budget – to pump money into building and construction – when the sector cannot build much more, will lead to price rises rather than output increases. This was the situation between 2005 and 2007, and the consequences were unfortunate. Link


Dan O’Brien

A more plausible scenario is the opening up of a bigger deficit in the Government's finances. This could quickly bring Ireland into the debt danger zone.

Irish public debt remains among the highest in the world by most meaningful metrics. Nor has there been any progress in paying down that debt. On the contrary, whether measured in gross or net terms, the pile of Government debt has actually increased over the past couple of years. Link

Colm McCarthy

As public debt marches on, Paschal Donohoe may count the cost of past budget generosity Link

Cormac Lucey

If I were in Donohoe’s shoes on budget day, I’d stick the boot into public spending Link

Cormac Lucey: Paschal Donohoe has wasted our budgetary harvests — now we’ll reap what he’s sown Link

Jim Power

Dangerously high debt levels are keeping Ireland vulnerable Link

Brendan Burgess

This is a very dangerous pro-cyclical budget - the opposite of what we need Link

IMF said the following in July:

Noting the advanced cyclical position and external risks to the outlook, Directors encouraged the authorities to accelerate fiscal consolidation to alleviate demand pressures and build buffers. They saw merit in saving additional corporate tax revenue, broadening the tax base to reduce dependency on uncertain revenues, reforming personal income taxation to make it more efficient, and enforcing spending limits

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Why is Paschal Donohue ignoring all the expert advice on the Budget?

Answer: Because he's a politician and he does what he thinks will get his party votes rather than what might be financially better for the country.

Personally I think keeping the ship steady is a good thing. But they should do something to sort out housing.

Coyote
That is exactly what I was looking for. Thank you very much.

Brendan

There's an election next year and this budget has no real tax cuts and no headline social welfare increases. By Irish standards, this is the gold standard of budgets!

Delboy said:

There's an election next year and this budget has no real tax cuts and no headline social welfare increases. By Irish standards, this is the gold standard of budgets!

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Yep, the question is not how much damage this government will do but rather how much damage any alternative government would do. This is the least worst option.

Because the advice of the 'experts' is limited to what should be done and not how it should be done.
Once it is explained how what should be done, then its into the political arena.

One could argue that to shore up a deficit od €1bn corporation tax rates could be increased from their 'competitive' levels.
Or alternatively, we could close some hospital wards and increase third level registration fees.

These are the type of choices politicians have to make. The 'experts' dont have to make these choices and I find are generally coy about doing so.

WolfeTone said:

Or alternatively, we could close some hospital wards and increase third level registration fees.

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I hate that sort of comment. Why not get the hospital to stop wasting so much money by actually running themselves properly?
The big missed item in this budget, and every other one I can remember, is targets for cost savings through restructuring and efficiency. What other large organisation doesn't set those targets?
The Growth and Stability Pack makes the budget a side note anyway so why not change it into what it should be; a statement of intent on how we are going to best use our financial resources?