There is a sense of déjà vu associated with the summer economic forecasts and the official exchequer returns published today.
A substantial surplus for the same period last year is replaced by a significant deficit, created by a huge splurge in both current and capital spending in the months preceding the election in May. Current spending rose by no less than 13% in those months by comparison with 2006.

We had exactly the same experience in the period prior to the 2002 election. In that year no sooner were the votes counted than official figures for spending and growth were revised downwards and the Government embarked on one policy U turn after another.

Are we to expect a re-run for the remainder of this year?

Today’s reports and the lower than expected yield from Stamp Duty confirm the gloomy outlook for the housing market and the financial consequences of the over reliance by the Government on this single sector of the economy as a primary source of public revenue. By the end of the year it would seem that Government surpluses will be a thing of the past to be replaced by quite substantial deficits that will undermine the entire Programme for Government.

The public is entitled to know what corrective measures the Minister has in mind to remedy the situation. As in 2002 the pace of public spending soared in the months before polling day and the day of reckoning left over till the votes were cast. Now that the true picture is clearer we ought to get an honest assessment from Brian Cowen of his revised plans for the remainder of 2007 and in particular how he proposes redirect activity in the construction sector towards public investment in infrastructure, particularly in public transport projects.

Even if the revised forecasts for growth are as good and even better than most of Europe, they are still substantially below the rates suggested in the Government’s election manifesto. Inflation is also way over the rate suggested in that manifesto and is now the biggest problem faced by ordinary families. Ireland now has the highest cost of living increases in the Eurozone.

The Department of Finance needs to revise its overall tax forecasts for 2007. If it does not then PAYE taxpayers will be asked to bear the brunt of shortfalls.

If that turns out be the case then it must follow that much of the FF manifesto is a dead letter as is the joint programme for Government agreed with 2 other parties. The public is entitled to know what components of this manifesto will be jettisoned in the new economic circumstances.