As has been well documented on this forum, our looming budget deficit is of serious concern. The latest estimates state that the figure is of the order of €20bn. This is about €16,000 per household.
Our Constitution enshrines the position of the Comptroller and Auditor General. This is an independent authority to investigate wasteful public expenditure. Rather understandably, governments don't do a very good job at investigating their mis-management and thus independence is mandated. A similar, though far more important, principle of independence is maintained by the judiciary.
Over the past twenty years or so, it has become increasingly apparent that independent central banks keep inflation lower than those under government control:
Consequently there has been much reform to remove the minting machines from the hands of the government. Blair did it as soon as he took power, and it is best typified by European Monetary Union.
It seems the only place governments maintain free reign is in fiscal policy. This has advantages -- taxation and expenditure are extremely sensitive, political issues that should be processed through the democratic mechanism. However it is also inherently problematic. Frank Barry recently bemoaned the government's failure to oversee our public finances, and I look forward to Morgan Kelly spouting off about the government buying a failing bank.
I'm going to sleep on it, but I think there may well be a serious case for an independent fiscal authority. They should, of course, have only limited control over fiscal policy. However, given the dire state of our national finances, who are the government to say they should maintain responsibility. Both An Taoiseach and the Minister for Finance have been in government for the past ten years, overseeing one of the largest booms ever in the Western World. Two years ago the then-Tánaiste said we "did not need" the billions of euro of stamp-duty revenue. Eighteen months ago the then-Taoiseach suggested economists who predicted a collapse in the housing market should "go jump off a bridge". The ESRI's John FitzGerald and the aforementioned Morgan Kelly, among others, have been warning about the fragility of the government finances for several years. Journalists, less rigorous in their methods, have been predicting similar for even longer. Who is Brian Lenihan to suggest he should maintain complete control over our fiscal policy?
Who can argue that it would not be beneficial for this fiscal authority to have the power to prevent a large (>€100m) item of expenditure before it becomes a great waste? Who can argue that, in light of the government blindly ignoring economic advice, that some formal preventative measures should not exist? Who can argue that the government's wanton disregard for the realities of the business cycle does not provide support for an agency with the power to block tax cuts? Why do we not have somebody with the power to force the government to take note of the wall it is about to drive into?
It seems to me that the one lesson we have really learned over the past year is that the government cannot manage the affairs of this state properly, and it should at least do the decent thing to prevent such a ridiculous situation emerging again.