The Politics of the Last Announcement

In December the Irish Fiscal Advisory Council (IFAC) published a comparatively critical review of the government’s Budget 2024. Criticisms of ‘bad budgeting’ arose from the ‘lack of transparency,’ and the use of ‘fiscal gimmickry.’ IFAC defined the latter as ‘creative accounting techniques’ used to make the numbers ‘look more favourable than they are.’

The Irish Times described this as ‘an extraordinary broadside against the Government’, with RTE referring to IFAC’s assessment as ‘controversial.’ However, as IFAC made clear in February, they were standing firm behind their ‘perfectly valid’ analysis which they stated was backed by ‘substantial evidence and reasoning in support of this conclusion.’

This episode had me wondering whether similar kinds of “fiscal gimmickry” are at work outside of budget time, specifically when Ministers are out making what are nominally ‘new’ funding announcements. You will of course be familiar with this type of thing.

It goes something like this: a Minister appears on RTE, or broadcasts via their social media platforms, that they are ‘delighted’ to be announcing x million for some initiative. Now the ordinary person probably never stops to consider whether this is new expenditure for a new program, additional expenditure for an existing program, or simply existing expenditure for an existing program.

But to be fair to the average voter, there are a few Ministers that probably never to stop to ask this question themselves. What matters to them is that they are out and seen to be doing things – energy in lieu of action. If taking a bit of creative licence results in positive media coverage, then some see that as all well and good.

I must confess that for some time I’ve been puzzled by how some Ministers seemed to be making ‘new’ multi-million announcements every other week, whilst for others such announcements were few and far between. So, I thought I would investigate the matter. As we’ll see, this is where a kind of “fiscal gimmickry” meets the ‘the politics of the last announcement.’

In Table 1 we can see the number of funding related announcements made by all our current government ministers (excluding the Taoiseach) in 2023. We have a total of fourteen Ministers spread across seventeen Departments. The median amount (think middle value) of funding announcements made last year was 11.5, so just under one funding announcement per month.

As we can see, half of our Ministers made less than this, and some significantly less. For instance, Messrs McGrath (6) and Donohue (5), perhaps the two Ministers most associated with the word ‘prudent’, were certainly amongst the most judicious. The same goes for Minister McEntee (4), although she was off on maternity leave for a period.

Just three Ministers; Harris (32), Martin (30) and Humphreys (21) were significantly higher. But to be fair to Heather Humphreys she is Minister of two departments (Social Protection/Rural and Community Development), so it’s really just Harris and Martin that were so far ahead of the pack.

Frank Armstrong commends Micheál Martin for laying out his political philosophy, but takes issue with his claim to occupying a 'liberal' middle ground.@frankarmstrong2 @paddycosgrave @BowesChay @MichealMartinTD @vincentbrowne @connolly16frank https://t.co/JjCnwzRIc2

— CassandraVoices (@VoicesCassandra) June 8, 2023

What’s the explanation?

Could it be that they occupy larger spending Departments and hence their respective Ministers need to make more funding related announcements? Considering neither of these Departments is in the top five in terms of expenditure, however, and indeed Martin’s is forth from bottom, that doesn’t seem to account for it.

The second largest spender is the Department of Health, but Minister Donnelly made one of the fewest amounts of funding announcements (6). In fact, the size of a Department’s expenditure seems to have almost zero relationship with the number of funding announcements that its Minister makes.

As we can see from Figure 1 there’s no statistically significant relationship between the size of a department’s expenditure and the number of funding announcements its respective Minister makes.

Minister	Department(s)	No. funding related announcements (2023)	Department(s) Gross Expenditure €000/rank (2023)	Comment
Simon Harris	Further and Higher Education, Research and Innovation	32	€4,092,446 (6th place)
Catherine Martin	Tourism, Culture, Arts, Gaeltacht, Sport and Media	30	€1,165,509 (13th place)
Heather Humphreys	Social Protection/Rural and Community Development	21	SP – €23,901,145 (1st place) RCD – €428,981 (17th place)	Minister for two Departments
Norma Foley	Education	13	€10,025,107 (3rd place)
Charlie McConalogue	Agriculture, Food and the Marine	12	€2,164,509 (9th place)
Roderic O’Gorman	Children, Equality, Disability, Integration and Youth	12	€5,931,759 (5th place)
Darragh O’Brien	Housing, Local Government and Heritage	12	€6,414,089 (4th place)
Michael Martin	Defence/Foreign Affairs	11	Defence – €1,209,737 (12th place) FA – €1,057,144 (15th place)	Minister for two Departments
Eamon Ryan	Transport/Environment, Climate and Communications	10	Transport – €3,516,269 (7th place) Environment – €1,066,060 (14th place)	Minister for two Departments
Simon Coveney	Enterprise, Trade and Employment	7	€1,621,413 (11th place)
Michael McGrath	Finance	6	€600,240 (16th place)
Stephen Donnelly	Health	6	€21,358,420 (2nd place)
Paschal Donohoe	Public Expenditure	5	€1,670,513 (10th place)
Helen McEntee	Justice	4	€3,428,623 (8th place)	Maternity leave for a period

 

We’ll zoom in on new Taoiseach Simon Harris for three reasons. First, he’s the most prolific in terms of making funding announcements – averaging almost three a month; secondly, he’s the new Taoiseach so it could provide a window into what his tenure might look like; and thirdly he’s the only Minister I am aware of that has ever been accused of making re-announcements dressed up as new spending measures.

In January Simon Harris appeared in DCU for a carefully choreographed photo opportunity. This was off the back of a big announcement he made about seeking Cabinet approval for a ‘new’ student housing policy. Note: this policy is almost indistinguishable from its predecessor.

Off the back of this he appeared in DCU with the big funding announcement that he was there to ‘unveil plans for 500 student accommodation beds,’ something he again alluded to during Fine Gael’s Ard Fheis over the weekend. The glaring problem with this was, of course, that he’d already announced it last year, with an almost identically choreographed photo opportunity.

The Students Union of DCU had clearly got wind of the Minister trying to pull a stunt and were there to confront him. Soon after the Union of Students Ireland chipped in accusing the Minister of recycling old announcements which amounted to ‘engaging in smoke and mirrors’ in the hopes that ‘no one will look beyond the headlines.’

So, is this characterisation of Harris fair? Let’s take a look at some of his other creative accounting announcements. In June 2023 he announced: ‘Today I am launching a €9 million fund for higher education institutions to improve access to higher education for students with an intellectual disability.’

It was in 2022, however, when he first launched what was then a €12 million fund. It was to work as follows; €3 million would be disbursed in 2022, with the remainder disbursed over 2023-25. So, essentially it is €3 million a year over four years. Yet with Harris’ approach €12m can be announced one year, €9 million the next, €6m the year after and then €3 million in the final year!

If you weren’t following closely, you would be forgiven for thinking this has been a total of €30 million (12 + 9 + 6 + 3) rather than the €12 million that was originally set aside. Now the Minister could surely counter that what he said was technically correct, and he would have a point.

Such announcements, however, as the USI pointed out, are made on the assumption that most people don’t look beyond the headlines. Or read the Department’s press release which will usually contain explanatory notes.

In October in the wake of Budget 2023, where the Minister was severely criticised for having produced no new funding for student accommodation, he suddenly appeared to announce that he was ‘Delighted to announce a new €434 million student accommodation partnership, which will help build over 2,000 beds on college campuses across the country.’

Delighted to announce a new €434 million student accommodation partnership, which will help build over 2,000 beds on college campuses across the country.

Thanks to @EIB and @HFA_Ireland for the initiative. Applications are now open. pic.twitter.com/PDaenm2VxI

— Simon Harris TD (@SimonHarrisTD) October 26, 2023

This one seemed to catch everyone off guard, including the universities, his Cabinet colleagues and the opposition. One of the glaring problems with this announcement was there was nothing new in it. Not only can the universities already borrow from the EIB, they already have significant borrowings. Their issue isn’t being able to access borrowing, it’s their ability to repay the money sustainably. Several universities are already grappling with financial deficits this year. Indeed, the entire sector has to deal with a core funding deficit of over €200 million, which is a hangover from the Austerity period – a shortfall he was supposed to address but has now left to his successor to sort out.

If his past Ministerial performance proves a good indicator of Simon Harris’ future performance as Taoiseach, then we can expect big announcements, and then big announcements with even bigger bells on. But scratch beneath the surface and you’ll probably find some fiscal gimmickry afoot. I just hope that when these big announcements come, they will be met with equivalent levels of scrutiny by our media and state broadcaster.