20 July 2009

INP boondoggle tagged for axe in Irish expenditure cuts

A decade old business/trade project between Ireland and Newfoundland and Labrador that seems to have generated only cultural exchanges and ministerial trade missions has been identified by an Irish government-appointed panel  as one area of government spending the Irish government could cut in tough fiscal times.

In the report issued last week, the Special Group on Public Service Numbers and Expenditure Programs recommends chopping public spending for the Ireland-Newfoundland Business partnership:

“…the discontinuation of programmes within the Department of the Taoiseach which are no longer justifiable given the significantly reduced Exchequer resources available and the existence of other more important priorities. Expenditure on the Active Citizenship Office and the Newfoundland Labrador Partnership falls into this category.” [Emphasis added]

In the report’s second volume, the panel cited a lack of an economic rationale to underpin the project as a key reason for recommending it get the axe:

This programme was developed to promote and develop cooperation with the provinces of Newfoundland and Labrador, Canada. The Group understands that the partnership developed from the recognition of extensive migration ties between Ireland and Newfoundland/Labrador and the desire to build cooperation. However, there is no significant economic rationale to underpin continuation of the scheme and the Group recommends that the scheme be abolished to save €0.3m a year.

In setting the background for the recommendations, the group noted that the Irish government is facing a projected deficit in 2009 of 18.4 billion Euros.  The panel was also aiming at reducing the Irish public service which had grown overall 17% in the past eight years. 

In some sectors, the report noted disproportionate growth “in the ratio of senior-level grades where, for example, the numbers at middle to higher management levels in the civil service grew by some 82% in the period 1997 to 2009 at a time when civil service numbers as a whole increased by 27%.” (page 12)

The government is looking for ways to return the budget to balance in the shortest possible time.  The scope of the financial problems being faced in Dublin are laid out succinctly in the opening of the report:

Consequently, Ireland is now in a position where we need to borrow more to fund a larger budgetary deficit, while paying higher costs for this borrowing. This means that ever increasing proportions of our tax revenues will be needed to service the national debt. In 2009 over 11% of estimated tax revenues will be used for this purpose, compared with a figure of about 4½% of tax revenues as recently as 2007.

In Newfoundland and Labrador, innovation minister Shawn Skinner expressed his belief that the partnership would continue but his comments suggest that either he hadn’t read the report or had been very badly briefed before speaking with reporters.

"They are physically moving the office of the INP to the Taoiseach's office which is like … the premier over there or the prime minister over there and that to me speaks to the significance that the Irish hold this office in," he said.

The report clearly indicates that the partnership is already housed under the Taoiseach’s (first minister’s) office so that is really no indication of anything. 

Moreover, given the magnitude of the country’s financial problems, no office was safe from recommended cuts.  Even defence, which had seen a reduction of 8% in staffing over the past eight years, is included in the projected cuts and rationalisation.

The CBC online story (linked above) erroneously refers to the report as being prepared by consultants.  This suggests something with far less official status than it does.  The review panel was appointed by the Irish government as part of a specific government financial management project.  It received technical and administrative support directly by staff from the country’s finance ministry.

Skinner also said:

“"They are very cognizant of the good work that's being down by the INP with the IBP and they want to see that continue and I have no doubt they will continue to fund this office."

Pretty well all the projects and offices proposed for the chopping block do “good work”.  Most do far more “good work” core to Irish domestic social and economic interests than the half-million dollar partnership.

The current Irish national debt is more than 65 billion Euros.

The report is now in the hands of a parliamentary committee for detailed review before the next budget is set in the fall.