What's the point of this budget?

Sleepy

Given that a new government will be in power less than a financial quarter after it's passed, what's the point of bothering to hold a budget in December?

Obviously, there's a huge amount of work associated with putting one together and I'm assuming this leads to lots of overtime for the relevant staff in the Department of Finance, there's also the cost of paying expenses to our TD's so they'll actually appear in parliament to vote on the Finance Bill, the cost of printing etc. etc. etc.

And for what?

To calm the markets we won't be taking part in for 3 years?

To attempt to hamstring the incumbent FG/Lab coallition?

Surely any new government are going to hold an interim budget and / or pursue different policies than the current lame duck government?

I just can't see any benefit to holding the budget until after the general election has given someone a mandate to govern this country.

Permabear

This post has been deleted.

Sleepy

But any budget passed will only hamstring an incumbent government for a few months... there's nothing to say they won't rip up the passed budget to pursue different policies in a new Budget early in 2011...

I'm sure the EU/IMF will have something to say about any supplementary budget but given that they largely won't care where the 6bn comes from and they can stipulate that figure as a condition of the contingency fund/ bailout money being available, I don't see how the budget being passed makes any difference to their position...

senordingdong

So FF can cement the adjustments that they believe are necessary.

Bob_Latchford

An election is more important than a budget

North_West_Art

Dempsey was interviewed earlier on the news, and warned of grave woes and unthinkables if the budget isn't passed, but he stopped short of sharing with us what these woes would be.... Imf have contingency plans for when this type of thing happens, they have a plan for every eventuality and are used to political turmoil when they appear in a country.
Sick and tired of the government treating the public like school children.

Cannibal Ox

If we don't pass the budget, the IMF/ECB won't give the money and, as it stands, we can't afford the banks without IMF/ECB money. If the budget is delayed until after an election, it creates uncertainty and brings the markets back into play and puts the banks back at risk because the IMF/ECB money hasn't been put into play and in turn that raises the possibility of it spreading to Portugal/Spain. That's how I understand it but I could be wrong!

edit: Also, I'm not sure it matters who is in government. Our sovereignty has been overridden and the budget, at the end, is going to be the work of the IMF/ECB not FF, FG or Labour.

steamengine

Why don't they all (politicians of all parties), just rattle their heads together and get this budget over the line. The international media is watching our every move now and perceived prevarication is not going to serve any useful purpose. I'm not an FF supporter by any manner or means, but I do think they are correct on this one. Just get it done and dusted !!!

R P McMurphy

The EU want a budget and bailout agreed as soon as possible. I would say that the ability of the Irish government to dictate when they will hold an election is minimal. Chances are that Cowen would be told to get on with the budget and worry about election afterwards

Sleepy

the IMF/ECB won't give the money

I guess my question is: why not?

The budget is being prepared by a government that won't exist by the time it's even starting to be implemented.

Unless the entire budget is being written by the EU/IMF (and I would've hailed this as a good thing until I heard the nonsense about a sexist tax regime being brought into play) it's an utter waste of time. If it is being prepared by them, why not just state it publicly? Surely the markets would have more faith in them than the government being dimissed as total gob****es on the front pages of our press?

Riskymove

Sleepy wrote: »

I guess my question is: why not?

Sleepy you are correct, of course they will still bail us out, what does a month or two matter in the long-term picture?

what is the alternative?

The budget is being prepared by a government that won't exist by the time it's even starting to be implemented.

I agree that an election would be preferred but I dont agree with your OP where you suggets a new Government would have a new budget when they take office in March....I dont think there is any chance of that if a budget is passed next month

they may well obviously take a different approach in following years that the current Govenrment would but I still think all will stick to the general parameters of the 4 year plan

Sleepy

The 4 year plan is to get our defecit back to 3% of GDP. All parties bar the loonies are in agreement on this.

The IMF will be dictating large parts of this to whatever government is in place via their conditions for each tranche of the facility being drawn down.

The rest of the implementation (percentage of cuts vs. taxes, where the cuts are made, which tax mechanisms to be used etc.) will be down to the government of the day. The current government have no mandate to make these decisions, and given that they will not be around to implement them, are incentivised to pander to their usual vested interests in any budget they can lumber the implementation of onto the FG/Labour coallition that seems almost inevitable.

Bob_Latchford

If Ireland cant stand on its feet untill after an election by the Irish people then it is much better to let everything fall as we are then confirmed in Iceland territory, with debt so unsustainable that we cant have an orderly government by the people.

Cannibal Ox

Sleepy wrote: »

I guess my question is: why not?

The budget is being prepared by a government that won't exist by the time it's even starting to be implemented.

You'd have to ask them (there's no shrugging shoulder smiley!). Olli Rehn, EU officials in the irish times today, have all said they won't do it without a government. To me that makes sense in a way, they can't just strictly impose a budget on us, because it would be a little bit authoritarian.

Riskymove wrote:

Sleepy you are correct, of course they will still bail us out, what does a month or two matter in the long-term picture?

what is the alternative?

I'm not sure, and I could be entirely wrong and I'd really appreciate if someone who knows more about this could pitch in, but if the IMF/ECB money doesn't go through, then it effectively returns us to where we were last week for another two months. In which case, the banks are really going to struggle.

Bob_Latchford

Was on Newnight last night that the bond markets are relatively calm as they think Germany (IMF/EU/UK/Sweden) whoever has no choice but to get behind Ireland, wether in form of ECB or some agreement.

If we dont even have time for 2 or 3 months to get a new government then we should not be part of the euro as they would have let Ireland go to wall and trust would be broken.

dmaxontour

Sleepy wrote: »

The rest of the implementation (percentage of cuts vs. taxes, where the cuts are made, which tax mechanisms to be used etc.) will be down to the government of the day.

And this is why I would have deep reservations for any party to agree to the budget until they see where the cuts are coming from.
There need to be agreement on a budget so involve all the opposition parties now rather than trying to force whatever on December 7th.