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A hypocrite, but one who created basis for prosperity
Shane Coleman Political Correspondent



"As a community we are living way beyond our means. . . we are living at a rate which is simply not justified by the amount of goods and services we are producing. To make up the difference, we are borrowing enormous amounts of money, borrowing at a rate which we just cannot continue. . . We have got to cut down government spending. We will just have to reorganise government spending so that we undertake only the things that we can afford" OVER a quarter of a century on, it is impossible to ignore the ironies at the heart of Charles Haughey's televised address to the nation a few weeks after he was elected Taoiseach. Replace the word 'we' with 'I', and omit the word 'government', and Haughey might have been revealing the true state of his personal finances. But, of course, Haughey was not speaking about his own finances . . . the basic rules of economics only applied to ordinary mortals. It would be over 15 years before we learned that, while Haughey was urging the country's citizens to tighten their belts, his own lifestyle was way beyond his means.

And, within a matter of months, it became obvious that Haughey's high-minded words about getting government spending under control would not be backed up with action.

Within a year, his government's budget would be projecting a deficit of £515m, which in reality ended up exceeding £800m, as Haughey sought to spend his way out of trouble.

Out of office in 1981, Haughey did return to government nine months later, and "it seemed that [he] was finally determined to treat the disease he had diagnosed in January 1980, but whose spread he had been instrumental in assisting, " wrote Joe Lee in his seminal work, Ireland, 1912-1985, Politics and Society. However, his minority government collapsed before it could implement its plan to phase out the enormous government deficit by 1986.

When Haughey returned to government in 1987, the public finances were in crisis and there were extremely high levels of unemployment and emigration. Public confidence was at rock bottom and the country's future appeared bleak. Fianna Fail fought the general election with posters declaring that "Health cuts hurt the old, the sick and the handicapped" and with rather woolly promises of economic growth-generated government spending. But once in office, with Ray MacSharry as his finance minister, Haughey oversaw swingeing cuts in government spending.

It was to be Haughey's finest hour. It is impossible to ignore the scandals that have surrounded the former taoiseach since the establishment of the McCracken tribunal, but it would also be unfair to forget his role in laying the foundations for the economic boom that has transformed the country.

While his minority government was undoubtedly helped by an up-turn in the global economy and by the courageous support of Fine Gael leader Alan Dukes (who has never received the requisite credit for his 'Tallaght Strategy'), the impact that MacSharry's tough action on public finances had on the economy was startling. Public confidence lifted virtually overnight, the economy began to grow again after years of stagnation and, despite an outcry over cutbacks in health spending, Fianna Fail's ratings in the opinion polls soared.

Throughout all the flak, Haughey remained unswerving in his determination to see through what he should have started seven years earlier. Apart from a dip in the early 1990s, caused largely by the impact of the Gulf War, the trajectory of the economy has been consistently upward ever since.

The actions of Haughey and MacSharry ensured that, within a decade, the massive budget deficits, which at one point threatened to sink the Irish economy, were transformed into enormous surpluses.

The real irony is that if Haughey had applied similarly tough measures to his personal finances, his legacy would not today be so tarnished.




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