One of the greatest issues our country, and many Western countries face today is that of the complete and utter economic ignorance of our leaders. That might sound very blunt, but stick with me.
This problem affects not just our economy, but our jobs, our social traditions, and our general political culture. In one particular field, this ignorance becomes painfully plain: that of public spending.
Before we dive into this topic, however, it is necessary that we recall and acknowledge one fundamental economic principle: that all money used by government must come from somewhere. The government cannot simply “make money” – printing money in excess causes inflation, and we as an EU country do not even have the sovereignty to unilaterally decide to print currency anyway. Money can be borrowed from other countries, but this must eventually be repaid, and thus is not a viable option for sustaining any country. The only other option for a state to acquire money is through taxation. We can rightly say, then, that governmental funding relies on taxpayers more than anything else.
With this in mind, we can properly consider the problem we have with public spending. Public spending, like all government expenses, must be funded by taxes. Public spending relies on the pockets of the people, and therefore should be relied upon in moderation. It is certainly true that some public spending is necessary for the preservation of society, whether it be used to fund law enforcement and healthcare institutions, or construct public areas such as parks and museums. Nevertheless, public spending does cost the taxpayer, and unfortunately, many today seem to forget this, or to believe that the government has a virtually infinite supply of ready cash to throw at projects without any cost to the average worker. Government spending often goes well beyond the bare necessities, or alternatively expands and multiplies these necessities unnecessarily.
A prime example of the long-standing mismanagement of our public funds was brought back into conversation just a few days ago, when Fine Gail TD James Geoghegan spoke on RTÉ regarding a long-awaited project of building a children’s science museum in Dublin city. The project was initially commissioned in the ‘90s, but has undergone a series of delays since, and has been considered something of a lost cause for some time now. However, according to reporting by RTÉ’s Prime Time, Office of Public Works (OPW) signed a contract in 2003 with Irish Children’s Museum Limited (ICML), by which it is bound to either finish the project at the National Concert Hall on Earlsfort Terrace, at an estimated cost of €70 million, or pay the construction costs to ICML. The report suggests that ICML is holding the OPW to its bargain, one that now seems to have been based on optimism verging on naïveté.
The process of trying to get this project off the ground (or on the ground) has been disastrous. The absurdity of the situation is only heightened by the fact that, in the meantime, a private company has succeeded in largely accomplishing the goal of the proposed facility.
The Dublin Explorium, an interactive children’s sport and science centre, opened in 2019, and was built by a private duo of entrepreneurs. It serves almost the same purpose as the proposed OPW project – to create an interactive science experience aimed at children. One of the board members of the ICML charity even admitted that “Explorium has been a big success and, and of course school kids love it… Some of their ideas we might rip off and bring them in here”. This business was conceived, constructed and opened after the OPW’s project had been announced, and before it had been started, and did not have the benefit of the backing of public monies, nor a valuable public plot of land beside the Iveagh Gardens on which to work. The Explorium had none of the advantages held by state-funded constructions, but it is operational, unlike the public project.
Despite the extraordinary delay that has beset the OPW project so far, some suggest that Government should still approve funding for it and complete construction. It seems that the aforementioned 2003 contract does make it difficult to pull out of the situation, but nevertheless one cannot help but ask: why does this project still exist? Its cost to the public purse has steadily been rising for the past three decades since its commissioning, and yet neither party has come to a resolution to end it.
Presumably, the primary argument for persisting with the project, despite the apparent mismanagement to date, is that it is a public amenity, and therefore that the public will get back what they put into it. There is an argument to be made for this, but it is significantly undermined by the existence of the aforementioned Explorium. In short, private enterprise was able to take substantially the same idea and successfully implement it before the OPW had even laid the first brick.
If RTÉ’s reporting on the matter is accurate, it would seem that ICML is determined to force the OPW to see the project through to completion, despite the rising costs. It is a fair question to ask: is this project really in the interests of the taxpayer at all?
On a positive note, the project has at least given us an object lesson in the respective efficiencies of public spending and private enterprise. If the project had been completed within a reasonable timeframe, even with the extortionate price tag attached, the government would inevitably silence and ridicule any objection to it. “Look at the museum, though. Isn’t it incredible? Look at all the little children enjoying themselves in it. If you had your way (and we hadn’t taxed you to build it), we wouldn’t have anything like this in the country!” So the defence might have run. However, the actual events that have played out suggest otherwise. Not only would popular amenities like this exist without government spending – as shown by the Explorium – but they would cost less and be completed much faster. True, as private buildings there would be an entrance fee, and perhaps there would not for a public project, but if so, the entrance fee for a state-funded building is extracted from the taxpayer every month, regardless of whether they use the building themselves. A private company cannot charge you if you have not used their building; the state is not bound by such constraints, and will tax you for it whether you like it or not.
Many seem to be under the impression that public sector construction is to be preferred to private, and that all would be well if only the state would take a greater hand in creating houses and other useful buildings. If you believe this much, allow me to remind you of the infamous Leinster House bike shelter, which cost the taxpayers of Ireland well over €300,000. However, this was not the last, nor even the most egregious waste of public monies in recent times. Last year, it was reported that the OPW had spent over €1.4 million on a small security shed at the entrance to the Government Buildings – a building which seems to be little more than a glass box with what looks like a badly rusted Nike logo perched on top of it. In a more recent report (already commented on in these pages), it was revealed that Dublin City Council had set a budget over €6 million for the construction of tearooms in Merrion Square Park. In general, private construction is faster, cheaper, and more efficient, because individuals actually stand to lose personal wealth from it, and thus will not take unnecessary risks. Government representatives are detached from the money they spend – it does not belong to them, and it is not therefore surprising if they have less concern over how they use it.
In today’s political culture, many, especially those on the political Left, seem to be under the impression that the government is an omnipotent force capable of solving any and every problem, backed by a limitless supply of cash. This is a dangerously naïve worldview. Every Euro spent by the OPW is a Euro out of some worker’s pocket. The good news, however, is that every Euro not being taken by the government is going into something else, whether that be a private museum, a house, or any other kind of amenity.
With this in mind, if we really want to solve our economic problems – the housing crisis, the job market, and excessive government spending – we could try a different solution: lower taxes. This puts more money in capable private hands, and less money in unnecessary and overbudgeted state projects. And for those politicians who are worried about their careers: lowering taxes has seldom been a cause for complaint from voters.
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Patrick Vincent writes from Dublin