Unseasonal budget a relative success – if still something of a shot in the dark

Political World with Harry McGee – harrymcgee@gmail.com

It’s the middle of October and we should be thinking of leaves turning brown and the season of mellow mistfulness as the clocks go back at the end of the month. Instead, unseasonably, we are talking about the Budget.

It just seems strange. That event is always associated in my mind with dreary December and the shortest days and all the darkness before Christmas twinkles us out of it permanent.

But we have had an October Budget this year. Why? Well, it’s got nothing to do with us, Gov. It’s Europe and its bureaucratic ways. Part of the price for going into the European Stability Mechanism was that there was more uniformity and predictability about how European Union member States were running their affairs. And that mean that all EU countries must present their budgets in October.

We had a Budget in October once before. That was in 2008, when new Taoiseach Brian Cowen and his new Minister for Finance Brian Lenihan realised the jewel they had inherited from Bertie Ahern was really a fake.

In an act of panic, they introduced an early Budget with a lot of crude cuts. Most were tolerable. But the one that really riled the citizens was the decision to remove the automatic right of over-seventies to hold a medical card.

It provoked an outrage and for the first time ever the gates of Leinster House were being stormed by a silver-haired and blue-rinse mob.

So, after that experience, there was understandably not much appetite to repeat an October budget.

But now we have had one foisted on us. It must be said the atmosphere has changed markedly since then and a lot of water has flowed under the bridge and a lot of money has flowed out of the Exchequer.

As it happens, for the second year in a row, the Minister for Health James Reilly has tightened up the conditions for over-seventies to hold medical cards and thousands will now lost that right.

But is there an outcry this time? Not much, if any. So many groups have been hit hard by successive austerity budgets that the well of sympathy – so evident in 2008 – has dried up almost completely.

The worst thing is that the Government has made a budget for 2014 based on an incomplete picture of how 2013 has fared out. At least with a December budget you have almost all the details that are required.

Before this week’s document was drafted we knew what money the State had taken in and spent for the first nine months but not the last three months. For example, the returns for the self-employed are filed at the end of October and November (if online) so we can’t say at this stage if the news is good or bad. Ditto with corporation tax, where November is also a very big month. And the CSO figures that tell us how the economy is faring overall (whether it’s growing or in recession) only take us to the end of June.

We will not know until long after the Budget has been announced if the country was in recession in the second half of the year.

For more, read this week’s Connacht Tribune.