BUDGETING FOR BREXIT

14 September 2019 No Comments by The Northern Standard

The Government are now setting about a task they have been repeatedly urging businesses and employers throughout the country to do in recent times – budgeting for Brexit.

Minister for Finance Paschal Donohoe TD yesterday briefed his fellow Cabinet members on the approach he will be taking to the frameworking of the national finances for 2020, indicating that the Budget to be announced on October 8 will be prepared in the expectation that there will be a no-deal outcome to the UK’s messy divorce from the European Union.

Opponents of the Government and cynical observers with no particular political axe to grind might well perceive this approach, and some of the preliminary noises the current administration have been making when talk has turned to Budget matters, as using the bogeyman of Brexit to carry out a little covert fiscal rectitude, and to lower the expectations of those who traditionally petition Mr Donohoe’s Department at this time of year with pre-Budget submissions.

When a Government talks up an economic recovery the way this one does, the public naturally expect them to walk the walk at Budget time and bestow the largesse of tax cuts, expenditure increases and generous funding food to feed the ever-avaricious mouths of health, education and transport infrastructure. Waving the Brexit stick at people living on crumbling roads or lying on trolleys in hospital corridors, or waiting on the arrival of the National Broadband Plan, is not going to spare the Government criticism that could easily translate into a damning verdict at the polls come next year’s General Election. October’s Budget is the last chance Mr Varadkar and his Cabinet have to make some inroads into these and other areas which have not received the kiss of life from the much-heralded economic phoenix that they say has risen from the ashes of the inferno that was raging in the national finances when Fine Gael ascended to the throne of power.

But, of course, budgeting for Brexit does not automatically mean tying a choke-knot on the Exchequer purse strings. The Government will have to spend on preparations for a no deal scenario and this is surely the most difficult of the economic balancing acts that Mr Donohoe must perfect in the weeks ahead. How much money will be needed and where it should best be spent is an extremely difficult thing to calculate in light of the many unknowns or unknowables of a post-Brexit landscape. Back in the days when the exploration of our planet was in its formative phase and great swathes of the world remained unknown to some or other civilisation, cartographers would sometimes inscribe the ominous phrase “here be dragons” on the areas of maps whose terrain was still cloaked in mystery. The briefings that land on Minister Donohoe’s desk from Departments trying to forecast what a Brexit, deal or no deal, will actually look like, will surely be replete with modern bureaucratic synonyms of this archaic phrase.

Maybe the Minister should look a little further afield for his guiding advice. If he spoke to the members of Monaghan Co Council, for instance, he would surely hear – more than likely from P J O’Hanlon – about the need to invest more money into the road infrastructure of our Border region in order to give businesses often depending on sub-standard road links to access supplies and markets a decent chance of coping with any adverse Brexit fall out. Councillor Pat Treanor, perhaps, would point to the urgent importance of securing on a long-term basis the steady stream of significant funding needed to turn the restoration of the Ulster Canal from a partially-realised aspiration to a fully-fledged and functioning tourism dynamo that would materially enrich the regions it passes through and symbolically forge a vital connecting artery between South and North that would countermand the potentially dangerous sense of isolation and insularity that a no-deal Brexit has the potential to foster in Northern Ireland communities.

And if the Minister decided to consult outside the local authority chamber, there would be no shortage of entrepreneurs, business owners and retailers who could explain to him the practical difficulties they anticipate from the UK’s European departure, and the tools they need from the Government to help them overcome them. Minister Donohoe would probably find that he would not have to automatically reach into his pocket to provide this aid – simplification and clarification of various rules and regulations is in many cases all that businesses along the Border are asking for from the Government in order to help them do their job equally as well and maybe even a little better in a post-Brexit world.

A Budget is always a fine line to walk for the man or woman who has to get up in the Dáil and take the hits for a package of measures upon which there is in reality a multiplicity of fingerprints. Give too little and the papers and the pundits will brand you a miser – give too much and the Opposition will hound you as a wastrel.

The thickening of the skin that will have naturally accrued to Mr Donohoe from his time in the Government trenches will deflect such sticks and stones with ease. But he and his Cabinet colleagues will be acutely aware of two things that lend more significant weight, and more potentially injurious fallout, to this particular Budget – it is probably the last one before Brexit, and it is almost certainly the last one before the next election.

In the wider scheme of things it is no big deal if the Government gets the Budget wrong from the point of view of Fine Gael’s fortunes at the polls next year – it is part of the political roundabout that the power the people giveth, they eventually taketh away.

It would assuredly be a much more serious thing if the Government gets this Budget wrong from the point of view of Brexit, certainly for those living and working in the circulation area of this newspaper. Yet how does one budget for the caprices of Boris Johnson, and the countless practical consequences of either an agreed or no deal departure that will only become manifest when the new trading and travelling landscape is in place?

The advices that Minister Donohoe chooses to seek out and heed in the weeks ahead will be particularly important ones. He should certainly have a receptive ear for those carrying the cadence of the Co Monaghan accent.

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