Monday, March 30, 2009

Cowen is just 3 weeks behind this blog?

When I was updating my budget deficit forecasts last week, I noted that the Government has been catching up quickly with my predictions from December, followed by February forecast for a shortfall in revenue.

Now, like Ireland behind Iceland (with an alleged 3-months delay), our Government is about 3 weeks behind this blog. Today's papers report that Brian Cowen now expects a tax revenue of €32bn in 2009. Well, I'll be damned... see my latest update here projecting €31.4bn in revenue.

Of course, a speculation is due - the results are to be released on the 3rd of April. Last month, Biffo didn't bother to read these in advance, nor did anyone else in the Government. This ended up looking like the Government that can't handle its own figures (which, obviously, the can't) let alone deal with the crisis in the entire economy (ditto). Maybe this time around Brian^2+Mary decided to set aside some time to govern? Fat chance. I think the entire drip-feeding of new - downward - figures is designed not for the public consumption but for the clandestine Partnership Talks going on.

Per information I gathered from the sources at that Partnership Table, last week, the Government managed to present a half-baked argument that things have bottomed out in the economy already. Improvement is around the corner and thus we can borrow our way through this. Documents I have seen - given to the Partners - showed relatively rosy forecasts for 2009 and 2010. The Government, it appears, also believes that it has resolved successfully the financial institutions crisis via a mix of past policies and the forthcoming scheme for dealing with 'bad' loans. It further claimed that it will be delivering a stimulus package, icnlsuive of some enterprise credit support measures - alongside the mini-Budget next week.

Well the latter might have something to do with a forthcoming document from one serious international organization that we are the members of which (later this week) will show that compared to other developed countries around the world, Ireland finds itself as:
  • the worst economically governed in the world;
  • in deepest trouble when it comes to housing markets declines to date;
  • the country that is applying all the wrong (uniquely Irish) remedies to its fiscal problems; and
  • the country that is least well positioned to come out of this recession any time soon.
Incidentally, the same document will show that some 90% of the bonds spreads for the developed countries is explained by the underlying risk of debt default... Hmmm... should we send our DofF 'commentators' (see here) back to school?..

But back to our Taoiseach's pronouncements on fiscal policy matters. At the same time as delivering 'good' news, keeping public pressure on the Partners by sending 'bad news' messages is a relatively unsophisticated practice that our Triumvirate is well capable of. So go figure.

By all measures to date, however, it looks like the March Exchequer returns are going to be very bad, even by our recent standards. Remember - you have read it first here. Biffo is still 3 weeks behind...

No comments: