OUR RULERS STILL HAVE NO CLOTHES
Too optimistic. Astonishing. Bizarre. Putative. Writing in The Sunday Times, columnist Damien Kiberd might well have just used a phrase like ‘plain bonkers’ to describe Government projections for its tax intake over the next few years.
“There have been plenty of warnings that the austerity programme will not work. These have come from august sources including Paul Krugman, Nouriel Roubini, Joseph Stiglitz and Martin Wolf. We have been warned, but it looks like we are determined to ignore these voices,” Kiberd says.
Kiberd has done us all a huge favour by taking the time and effort to spend €10 on the Budget 2011 book from the Government Publications Service and to wade his way through to expose the ludicrous charade. If he’s right – and he invariably is in economic matters – the numbers just don’t stack up.
“The budgetary projections show tax revenue growing from a derisory €31.5 billion this year to an astonishing €44.4 billion by 2014. This putative surge of €12.9 billion in tax revenue is the most critical factor in reducing the budget deficit to €5.2 billion, or 2.8% of gross domestic product (GDP) by 2014,” he notes. “Even making the most generous assumptions, it is difficult to see how the €44.4 billion target can be delivered on the back of an economy where the money value of GDP in 2014 is still just €183.5 billion.”
Kiberd questions the growth projections in Budget 2011 and ponders the likely outcome in a column that makes for sober reading.
“If the official growth forecasts fall, the tax targets will fall with them and so too will the targets for the budget deficit. If that happens, we will be forced to enter into second or third round talks with our rescuers in the EU and IMF,” he concludes.
Even as they approach a very bitter end, it appears our rulers still have no clothes.