Ireland's Tax Deficit will exceed € 8 billion

Ireland's Minister for Finance Brian Lenihan (left) has said that he will take "remedial steps" to reduce government spending after the latest Exchequer figures revealed a very sharp deterioration in the country's public finances.

The new figures show that the shortfall for this year is now set to exceed € 8 billion, which is almost € 2 billion more than the government expected just two months ago.

November is the most important month in the tax collection calendar for the government, since it includes all self-assessed taxes as well as a larger proportion of corporation and capital gains taxes due for the year.

According to the new Exchequer figures there has been a massive shortfall of close to € 7.5 billion in the amount of taxes collected by the government during the first eleven months of the year.
This is a much more than was predicted, and analysts now expect the tax shortfall for 2008 to exceed € 8 billion, which is about twice as much as the amount allowed under EU guidelines.

Richard Bruton (right), the deputy leader and Finance spokesman of the opposition Fine Gael party, accused the government of "rushing the 2009 Budget" and of "making a bad economic situation much worse".

As a neutral observer and analyst I cannot help but agree with Deputy Bruton, who is regarded as one of Ireland's most capable experts on fiscal politics.

But what is even more significant is the fact that for years the Department of Finance - under Brian Cowen and now under Brian Lenihan - got every single forecast of taxation totally wrong. So-called 'experts' of the government and the highly paid senior civil servants in the department alike seem to have no clue about the real economic and fiscal situation in the country.

During the boom times they were each November "surprised" by a sudden surplus of several billions in extra taxes they had not expected to rake in. (But they saw well fit to waste them very quickly on needless projects and - more significantly - on themselves and their luxury lifestyle.) And now they are equally surprised that the shortfall is much larger than it was calculated only a few weeks ago.

One has to wonder what qualifications these people have to hold their senior positions. There are very few economists among them, but plenty of pig-headed apparatchiks whose inflexibility has cost the country already dearly - and it will get a lot worse next year.

No-one in the government, and especially in the Department of Finance, listened to the regular and steady warnings that some well-known and highly qualified Irish economists like David McWilliams, Senator Shane Ross and George Lee (of RTÉ) have issued over years. They predicted with amazing clarity everything that has happened during the past months of rapid economic decline, and I have contributed my own two-pence of analysis and advice as well.

It becomes ever more obvious that our current government, and in particular its majority party Fianna Fáil - which is in charge of the Department of Finance for more than eleven years now - is completely incompetent to govern the country.

Furthermore, the government is directly responsible for many of the elements that caused the current crisis.

But instead of doing the decent thing - resign and call a general election - the clueless and highly overpaid scoundrels muddle on and pretend that they understand what is going on.
Every day they cling on to their power - and the beloved perks it brings them - the situation for our country and economy will get worse. It is now time for the people of Ireland to take matters into their own hands, stand up and be counted.

People power has recently made a huge change in the USA, and people power has also just forced the corrupt government of Thailand to resign. We could learn a lot from those examples, and if we still care for ourselves and our future, we need to act now.

The Emerald Islander