Cabinet ignored Department advice on economy, report finds
A damning report has found that advice from the Department of Finance, which raised red flags over the danger of Government economic policy over a 10-year period, was consistently over-ruled by Cabinet.
The independent review has found the Department provided clear warnings on the over-reliance on the property sector, increased spending and tax cuts, and the economy's vulnerability in the event of a downturn.
This report, complied by independent experts from Canada and the Netherlands, examined the performance of the Department of Finance over a 10-year period.
During that timeframe the Department had warned against the Government policy of increasing spending and cutting taxes.
It also flagged the overheating of the property and construction sectors, and highlighted the vulnerability of Ireland's tax system in the event of a downturn.
The review found that although the warnings in each case were clear, direct and comprehensive, they was largely ignored.
In every year, with the exception of 2003, the Cabinet increased spending above the levels advised.
However, the Department itself is also criticised for not increasing the volume and stridency of its warnings as time progressed.
The outgoing Finance Minister Brian Lenihan has welcomed the report today, saying it provides a very fair and thoughtful assessment and while a number of its recommendations are a matter for the new Government, a significant number of others are being implemented without delay.
