Ireland is promoted in the EU as a model of austerity but what does that say about austerity in Greece,Spain and Italy? In Ireland,austerity has been very crude,with draconian tax increases,poorly managed spending restraints and savage cuts in capital programmes,many of which would have been useful.Cuts have not had much impact on excessive civil service pay,which is still around 50% higher than the private sector average (UK is about 13% higher,while France and Germany are lower). This is coupled with failure to reform many inefficient government departments and local government.
Looking at some details of cuts,lack of compulsory redundancies hampers retention of key staff,especially in departments that are short of managers and specialists. Many departments have had to rehire redundant employees as contract workers. As well,the numbers of pensioned off workers is rocketing in voluntary redundancies as employees close to pensionable age and fearing pay cuts rush to secure their tax free lump sums and pensions based on existing salaries.
Savage cuts in capital spending programmes mostly hit the private sector so they are preferred to politically difficult cuts in current spending. This includes shelved construction projects like Metro light rail to Dublin Airport and a whole host of government software projects.
Meanwhile,current spending programmes continue to be driven by health care costs. Despite the fact that preventive care of the kind provided in primary care trusts (eg for diabetes and dementia) prevents the need for a lot of expensive hospital A&E visits,the rollout of PCTs has been very slow. As a result,the HSE is resorting to appalling cuts such as in relatively low cost carer services which likely will force many into nursing homes charging maybe €1,000 a week.
The failure to reform local government was evident in a recent timid reform that consisted mainly in cutting council numbers but there was no response to the call for real democratic power to be devolved to councils from largely unaccountable county managers. As demonstrated in the US and the UK,councillors are likely to be better at managing counties and responsive to people because of their grassroots knowledge. I have noticed some very wasteful council construction projects in my local hamlet which an empowered council could have done at a fraction of the costs. One road project bypassed a very dangerous right angled bend by buying up acres of land and building maybe half a mile of new road.Instead,the council should have bought the modest house on the bend sometime in the past 40 years when the opportunity presented and straightened the bend through the site of the house.
Some empowered councils might act irresponsibly,in which case it's up to the voters to elect new councillors. If the national government doesn't trust them,it could create an inspectorate to report on their activies and spending.
In the next two years,with the economy taxed out and diminishing returns in taxes setting in,austerity is going to be very painful.Front line services likely will be rationed severely in many hospitals,for example. Given the government's servile pandering to public sector unions on Croke Park (Broke Park!) wages,it will resort to more tax increases which will have the effect of depressing consumer spending and business expansions in the small and mid-size business sector responsible for most employment. Maybe by mid 2013,it will belatedly realise that Croke Park will have to be ditched.