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News : Irish Last Updated: Sep 23, 2010 - 5:07:55 PM

Irish Public Spending: Bord Snip report recommends spending cuts of €5.2 billion; Most radical overhaul of local government since 1898 but other Victorian era relics to survive
By Michael Hennigan, Founder and Editor of Finfacts
Jul 16, 2009 - 5:44:04 AM

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Taoiseach Brain Cowen with trowel in hand, ready to help. As with the long-dominant LDP party in Japan, the mutual dependence of the dominant Fianna Fáíl party and the Irish construction industry, has also brought economic ruination to Ireland.

Irish Public Spending: The Bord Snip report, which will be published today, recommends a raft of spending cuts amounting to €5.2 billion and involving 17,000 State job losses; a €300 million reduction in the Health Service Executive’s paybill and the most radical overhaul of local government since the Local Government (Ireland) Act 1898.However, the decision of Taoiseach Brian Cowen to reverse his position on publishing the report does not mark a departure from other Victorian era relics in Irish public governance; endemic conservatism and opacity. With the Oireachtas on its 2-month summer holiday break, he hopes that the prospect of the usual vested interests building up steam on the basis of leaks, will be thwarted while the Opposition will have to outline their positions on the cut proposals.

An Bord Snip Nua, officially titled Special Group on Public Service Numbers and Expenditure Programmes, under the chairmanship of UCD economist Colm McCarthy, was mandated to propose cuts worth €3.5 billion annually but was not allowed examine the State’s capital spending and public pay bill.

It's not that these two areas do not merit examination but the politicians and senior civil servants do not of course wish to have to change such perks as the earnings indexed-for-life pension scheme.

With the ESRI forecasting that GNP per capita will fall to the 2001 levels, who among the political leadership and the senior public service, knew that the average benchmarking payment of 9% was based on a fraudulent premise? Were they all eejits or self-interested participants? In addition to the Bord Snip report, the forthcoming Commission on Taxation report, is also expected to make a significant input to Budget 2010 in December.

However, with political leaders in denial as to primary responsibility for the crash of the Celtic Tiger - - the second monumental period of mismanagement in a generation - - the key issue for all politicians and senior civil servants is that the implementation of cuts and changes to the tax system in the next Budget, will only be a short-term band-aid response.

Without transparency on public spending and a change in the buck-stops-nowhere governance system with senior management not held accountable but self-assessing themselves for public bonuses, the recipe for the next disaster will soon be in the making.

While the people who sat idly by or participated in the spoils, will continue to live a very good life, they have destroyed the lives of tens of thousands of people.

Nobody will be charged in a court for economic crimes, but  the collateral damage they have been responsible, will affect the people who will survive, for many years to come.

It's also rare for a people to collectively look in the mirror and take lessons from the plundering of the best hope we as a country have had, to put the Irish economy on a sustainable basis.

The recent worshippers of the gods of property in the political leadership have switched to blather on the so-called "smart economy" with the help of cheerleading from the politicised State agencies - - as if the ignorant use of American marketing jargon, is going to produce the "high value" jobs, like manna from heaven.

When the Irish were the second-biggest investors in commercial property across Europe, who cared?

We can blame it on colonisation as Africans tend to do, but we need to face an inconvenient truth - - there is no constituency for parsimony in using public funds.

To the victors go the spoils and vested interests are all socialists when it comes to plundering the public purse.

Update: Lenihan publishes Bord Snip report; Proposes €5.3 billion in spending cuts and public sector staff reductions of 17,300; Says public pension cost at 30% of salary

SEE Finfacts articles:

The Waste Land - - Bord Snip, Irish Public Spending Transparency and the motto "Never do anything for the first time"

The 2001 economic consensus that paved the road to economic ruin

Celtic Tiger Aftermath: Guilty Irish politicians remain in denial and clover while ignoring their victims

Report says Irish Financial Regulator’s failure to control property bubble contributed to economic crash and consumer wealth losses

Based on official leaks, the Bord Snip report recommends the merger of county and city councils in Cork, Limerick, Waterford and Galway; says single councils should serve two counties in a number of cases, including Sligo-Leitrim and Carlow-Kilkenny, and calls for town councils to be abolished; It targets allowances for State employees worth hundreds of millions of euros; a cut of €1.5 billion in the social welfare budget; the abolition of the Department of Community, Rural and Gaeltacht Affairs and an examination of the role of the Department of Arts, Sport and Tourism

Minister for Finance Brian Lenihan said on Wednesday that the public must accept that there are hard choices ahead, adding that €4 billion must be cut from spending or raised in extra tax next year. “There is no doubt that implementing the scale of adjustments required means that we must all take some very difficult decisions,” he said.

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