Looked at from a top-down perspective, yesterday's abridged Estimates are a modestly good start to the budgetary process. Having ramped up spending before the last election, fears that the Government would use next month's Budget to engineer a pre-election binge were entirely justified. But if Brian Cowen's approach in December is consistent with the plans announced yesterday to increase spending by 8 per cent, then those fears will be laid to rest.
Nominal Gross Domestic Product - the economy's annual output expressed in value terms - is set to grow next year by about 8 per cent. And if yesterday's target is maintained, the level of Government spending as a share of GDP will at least remain steady (although whether that level is justified is another matter). Next year's targeted increase also represents a significant slowdown compared with this year's target of 11 per cent. Then again, the virtue of this achievement should not be overstated in a year when SSIAs are maturing and personal debt is ballooning.
From a bottom-up perspective, the picture is more mixed. In all likelihood only a portion of the €4 billion in extra spending announced yesterday will benefit the public in any perceivable way. Once again, the lion's share will feed the ever-growing costs of public sector pay and pensions. What is true for extra spending is also true for overall spending. Out of a total of more than €50 billion this year, surely there was considerable scope for significant cost savings that might have prevented the need for any spending rise? For individuals, households and businesses, achieving greater value for money spent is a daily struggle. Why should the Government be any different?
At a time when bulging State coffers may be telling the Government how much it can spend, the real question - how much it should spend - is easy to avoid. For the total spending figure targeted in yesterday's Estimates is not just the sum of departmental budgets. It is also the sum of policy decisions, on issues like benchmarking of public sector pay and decentralisation. And far from reducing public sector numbers by 5,000, as promised at the last election, the Government has increased them by over 40,000, with more to come. Cowen's mantra that such increases are necessary to deliver better public services sits oddly with the widespread perception that those improvements never seem to materialise.
As a problem that has accumulated over the last decade, it is one for which the Government as a whole should be blamed. But as Minister for Finance, Brian Cowen deserves some credit. In his first budget, he began the process of reversing an increasingly discredited system of tax reliefs. And yesterday he reversed a policy of using the Budget as an electoral tool - at least for now. The interesting question is whether the Government will maintain that prudent stance and, if it does, will it have room to cut taxes on Budget day?