Seeds of reform fall on stony ground
EVERYTHING changes, gradually or suddenly. We have experienced a cataclysm and have barely got our heads above the flood waters. But in some respects it looks as if nothing has changed at all.
In February the general election produced a revolutionary result. In March our new Government took office with a promise of transparency and accountability.
Brendan Howlin became Minister for Public Expenditure and Reform. He said, and repeated only a few days ago, that reform must happen from the top down. In future, most members of the Top-level Appointments Commission, including the chairperson, would be drawn from outside the public sector. A fair and competitive process would be designed to find the best person for the job.
The Government set up an "economic management council" composed of Taoiseach Enda Kenny, Tanaiste Eamon Gilmore, Finance Minister Michael Noonan, and Mr Howlin. Clearly a good move. Every government should have an inner cabinet, and every government should speak with one clear voice.
Meanwhile, Mr Kenny needs a new secretary general for his own department, to replace Dermot McCarthy, who plans to retire shortly. A secretary general must also be found for Mr Howlin's department. And there will be a third (dubbed Second Secretary, but of equal rank) for the economic management council. He or she will report to the Tanaiste.
If this seems like a political device to enhance the Tanaiste's stature, we must wait and see how it works in practice. Of more immediate concern is the appointment of the three top civil servants.
And here, Mr Howlin's fine words appear to lose their meaning. There will be no trawl through the ranks of the civil service, much less outside it. The three appointments will all be internal. The successful candidates will be handpicked by leading politicians or bureaucrats or a combination of both. They will doubtless be admirable people, but they are unlikely to include any dynamic 30-year-olds bursting with ideas.
Is there no understanding at the very top that the defects of the administration contributed to the financial catastrophe? That civil servants helped politicians to implement disastrous policies? That if they issued warnings, these consisted of no more than whispers in ears? The entire culture of the bureaucracy is inimical to reform and accountability.
Changing that is as important as changing the political culture. And the magnitude of the crisis is no excuse for resisting change. There could not be a better time.
Money talks -- if only you can spare the cash
PERMANENT TSB, Ireland's largest mortgage lender, is expected to announce today that it will allow its tracker mortgage customers €10 for every €100 they overpay.
Other lenders will probably follow suit shortly. Since, proverbially, no such thing exists as a free lunch, the offer does not flow from philanthropic motives. If the scheme succeeds, the lenders stand to save themselves a substantial amount of money.
This rather odd situation arises from the relative cheapness of tracker mortgages at present. Lenders have to borrow money at much higher interest rates than those they charge on trackers, though not on other mortgages. At present the tracker mortgages, so far from making a profit for lenders, cost Permanent TSB about €400m a year.
Although the lenders will profit more from the scheme than the borrowers, that should not put off borrowers whose circumstances leave them in a position to benefit from it.
Paying off their debt in this way will suit people who save regularly. It will give them a far better return than investing money at rates as low as 2pc. But it is likely to be more profitable, and therefore more attractive, for individuals or couples approaching retirement than for a young couple who may never be able to borrow as cheaply again. The latter might do better to hang on to their trackers. But as in so much else, they would be wise to seek expert -- and independent -- advice.
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