OK. Let’s be vindictive. Time for a bit of satisfying revenge. Who is to blame for the economic collapse? How did innocent Ireland ever come to depend on the construction industry for its boom? Was it the Government? The unions? Property developers? Or the global credit crunch? All played a part, but none deserves the lion’s share of the blame.
First, let us point the finger. Afterwards it will be time to punish the offenders. A bit of old-fashioned retribution is overdue. The culprits: the bankers.
When Brian Lenihan introduces his October 14 Budget, he should start with the financial institutions and their hired guns.
For some unknown reason, the bank levy was abolished in 2006. Probably a hairbrained concession to the bankers’ puppets, the big business lobbyists in IBEC.
A bank levy would deliver €100m to Brian.
No one would shed a tear. The same bankers who overlent to gullible house buyers overlent even more recklessly to their greedy developer friends.
Now, as Armageddon threatens, the banks are more inclined to prop up the extravagances of the helicopter brigade at the Galway Races than the young couple struggling to hold onto their semi-detached in Lucan.
Ireland’s developers are threatening to pull the house down if they are put under pressure. The banks are backing off from challenging the developers. Repossessions are more their forte. Vulnerable house buyers are easier prey.
Brian Lenihan should put manners on them. Measure number one: bring back the bank levy.
All right, it will only produce a pittance; but it will teach them a lesson they will never forget.
All the bull from the bankers about “stress testing” first-time buyers is now ringing a bit hollow; but when it came to their big flash friends, the rules went out the window. They were allowed to conjure up a phantom industry, to create a fantasy world of transient work for thousands, to expand in anticipation of eternal demand for their product. Today, the apartments are empty, the workers are being laid off or heading home to Poland and the small buyers are being squeezed.
After the banks, Brian should tackle the quangos — the untouched players in the public finances theatre. The quangos will be Lenihan’s big test. Is the Finance Minister a prisoner of the current political culture which closes ranks the moment a quango is questioned?
On page one of this section we put Ireland’s superquango, FAS, under further scrutiny. Revelation after revelation about the extravagance, the loose regulation, the unorthodox culture and the political patronage at FAS have been leaking by the bucketful. And the leaks are still coming.
Behold a quango par excellence, with a €1bn budget, which is lashed by the Comptroller and Auditor General, and even by the Irish Times, for its strange ways.
Lenihan should not even bother to send in the auditors. They have been there already. And they have not liked what they found.
He should tell FAS director-general Rody Molloy to find him €700m out of his €1bn budget. FAS has played fast and loose with the nation’s money. Today that money is scarce. We want it back for those who need it. The nation can no longer afford FAS.
FAS has been dubbed a “slush fund for the social partners”. It is incestuous. It pays €55,000 for IBEC membership, an extraordinary club for a non-profit-making State agency to support. FAS is chaired by trade unionist Peter McLoone (paid €24,000 for his troubles). Its politically appointed board is stuffed with IBEC and ICTU luminaries, all drawing €14,000 from the State coffers as fees.
So let no one tell me that the State does not subsidise the social partners. It provides the perks.
The pattern of pillars of social partnership sitting on State boards, drawing fat fees as of right, is repeated across the semi-state sector. Gigs galore for the guys. Rotten for the rest of us. We pay for it.
It would take political courage for Brian to tackle the social partnership insiders and the junkies which feed off it.
Social partnership has spawned a very expensive industry. Insiders join to divvy up the State’s cake.
Brian could dismantle Peter Cassells’ ridiculous National Centre for Partnership and Performance; he could disband the National Economic and Social Council; he could abolish the National Economic and Social Forum; he could deliver the kiss of death to the National Economic and Social Development Office — all of them stillborn infants of the lavish social partnership marriage.
The omens are not good. On Friday the Government bought back into the old virus. They returned to the outdated game of summoning the “social partners” into Government Buildings — a photo opportunity, a chance to cook up a pay deal, to agree a programme for government to patch up the economic cracks.
Most of the activity is a desperate effort to preserve the status quo.
The status quo of social partnership no longer works. A pay deal will not rescue us from this mess. It could even make matters worse. It will send out all the wrong vibes to the remaining dynamic part of our economy, the multinationals. They have never caught the social partnership virus.
The Government should be partnering with the new wealth creators, not the old parasites. Today it is time to put the partners out of business. And out of government. The taxpayer would save a fortune.
Why? Because decoupling government from the dead stranglehold of social partnership would allow Brian Lenihan to dump many current taboos.
Social partnership has forced finance ministers to hold on to State assets. A time of crisis, free from the trade union embrace, is the moment for us to sell our 25.2 per cent stake in Aer Lingus. At current market values it would raise €220m. In the process the Government would save itself a heap of hassle.
At the same time, it can dispose of Dublin Airport, a State monopoly that could raise a billion at a stroke and propel the shameful slum into the hands of a commercial owner.
A time of crisis is the moment to examine the €300m subsidy to CIE .
None of our State assets should be sacrosanct. The ESB should be put on the block. So should Bord Gais, the VHI, Coillte and CIE. Each should be considered on a case-by- case basis. We cannot afford the luxury of ideological hang-ups when we are heading for the rocks.
Surely we want to ensure no cuts in education — the font of our current and future prosperity. School-building programmes, third-level research, broadband initiatives and other long-term investments should be accelerated, not delayed. The sale of a few moribund State assets could ensure better education.
Brian’s budget will offer no room for tax reductions, but there is no case for increases in direct tax either. With one exception. Brian is quite entitled to take a vindictive lump out of our beloved bankers, creators of the current crisis.