Irish Politics: Scraps on tax & welfare in place of vision
Irish Politics: Whether the next general election is held in November or March 2016 will not matter as we know that the familiar campaign template of boom, bust and recovery, will be in place with scraps on tax, welfare and public spending. We also know that apart from bromides in party manifestos, there will not be serious attention to preparing for long-term change by reform in governance, social and enterprise policies. It is what George H.W. Bush, then US vice president, called the "vision thing" in 1987, which he was often accused of lacking.
There is no tradition in Irish politics of individuals or parties publishing detailed policies on issues when in Opposition. In government, new ministers rely on consultants and advisory groups and the result is typically poor policymaking or just reacting to events that arise.
The sclerotic system results from the use of PR-STV (proportional representation by the single transferable vote) for elections to Dáil Éireann, the Lower House, where there is intense intra-party competition within multi-seat constituencies. In this situation clientism/ constituency service has precedence over policy issues or reform. In 2007 Tony Killeen, a minister of state, disclosed that his constituency office mailed more than 14,000 letters annually. In that year it was also reported that Bertie Ahern, then taoiseach, had 9 staff in his constituency office, and 30,000 letters were mailed annually to constituents.
In an ideal world, the pointless letter writing would be reduced to a minimum; citizen bureaux would provide answers to issues such as pensions, tax etc that the staffs of ministers and TDs (members of the Dáil) direct to other public servants and attention would be given to the legislative role while the glacial pace of reforms/responses to a fast changing world, would be accelerated.
With 17% of the Irish-born living outside Ireland — the highest percentage in the developed world — it's not surprising that the conservative political elite is an outlier in Europe in not allowing emigrants to vote — see here.
Enda Kenny, taoiseach, was in campaign mode Thursday night in a speech to the annual dinner of the Dublin Chamber of Commerce. He said: "I expect the theme of radical welfare reform, along with lowering the tax burden on low and middle income workers, will be a key election issue" and added: "Fine Gael is committing to rolling out a new ‘Working Family Payment’ in the next Government that will promote work over welfare."
We have reported on the issue of jobless households in the past. Between 2004 and 2007, a period of very low unemployment and rapid jobs growth, the share of the State’s households defined as jobless recorded a double-digit increase to reach 15% of the total. The average across the Eurozone in 2007 was just below 10%. The level rose to 22% in 2010.
Kenny said: "In many cases, for couples with children, work simply does not pay" — this claim contradicts Economic and Social Research Institute (ESRI) research, which showed last July that in respect of unemployed persons with a spouse and children: "fewer than 1 in 15 would be financially better off not working."
The ‘Working Family Payment’ is an easy election inducement but improving the dismal national training system and the long-neglected apprenticeship system, are unlikely to be high on Enda Kenny's radar in a second administration.
In 2011 the ESRI published a study which concluded that those who were assisted by the State while unemployed were less likely to return to work than the average welfare recipient. The researchers said that welfare recipients may have learned “as a consequence of the process, that they were unlikely to face monitoring or sanctions as a result of failure to search actively for, or obtain, employment, leading to some decline in job search intensity”— 2013 update here.
During the 2011 election campaign, just over 2 months after the international bailout in 2010, the Labour Party placed an advertisement in newspapers accusing Fine Gael of planning hikes in car tax, VAT, water taxes and saving tax, as well as a cut in child benefit. However, it was on an undeliverable commitment to stand up to the Frankfurt-based European Central Bank — “It’s Frankfurt’s way or Labour’s way” — that has caused it most grief in the interval, along with water taxes.
On 16 Feb 2011, The Irish Times reported that "a panel of political scientists have said that Fine Gael’s proposals for political reform are the strongest on offer."
Nul points for both Fine Gael and the Labour Party, its coalition partner, for ignoring the issue in the interval. Nul points also for feeble legal services reform that may not even be enacted if a general election will be held next month.
During the 2011 campaign, Enda Kenny repeatedly stressed the aspiration that by 2016 Ireland would be "the best small country in the world in which to do business."
"Since coming into office 7 months ago I have told nearly all audiences that by 2016 I intend to make Ireland the best small country in the world in which to do business," Kenny said in a speech in October 2011. "An integral part of this vision is to transform Ireland into the Digital Capital of Europe" — It later became Digital Capital of World!
Again, aspirations are not enough. There has been no follow through.
The Eurobarometer survey of 34 countries or territories, including the EU28 that was published in July 2015 showed that Irish participants were concerned about 1) Unemployment 2) Health and social security and 3) Housing - in that order; see Page 18. Taxation at 12% was the eight priority.
Extra spending on the health service rather than tax cuts is the priority for voters in the 13 Oct Budget, according to an Irish Times/Ipsos MRBI poll in September.
Increased spending on housing and tackling the homelessness crisis came second, with a cut in the universal social charge (USC) third.
Last year the UK government's Committee for Standards in Public Life (CSPL) published a report on public perceptions of standards in public life in the UK and other European countries. It summarises various European surveys and compared with trust in political parties and perception of corruption, Irish people have less confidence in their institutions than counterparts in Nordic countries — this is hardly a surprise!
Fintan O'Toole, the Irish Times columnist, wrote here in Sept 2014 on appointments to public bodies.
Enda Kenny's ministerial colleagues also avoid concerning themselves about preparing for future change.
Richard Bruton, enterprise minister, like his colleagues was caught flatfooted by the momentum for international corporate tax reform. Now he has no credible long-term plan to significantly grow the indigenous international trading sector.
Even allowing for the priority that the economic crisis has had from 2011, the lack of interest of senior ministers in reform is striking. On the issue of political reform, these individuals who had sat impotent on the Opposition benches for years, had no interest in sharing their new power when they gained it.
Given the glacial pace of change in Ireland, its not clear if current Opposition parties would behave any different, if they won power.
Luck, implementing most of the the demands of the bailout troika, or "whatever it takes" — a comment in London on 26 July 2012 by Mario Draghi, ECB president, was a key moment: "Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough" — the recovery in the Irish economy is very welcome.
"This Government, and Fine Gael in the General Election, will be setting a target of replacing all the jobs lost in the recession by 2018 and to get the unemployment rate down to 6% by 2020, Enda Kenny said on Thursday — the jobs lost were originally understated by over 50,000 until Finfacts queried it with the Department of the Taoiseach while the full-employment target is back to 2020 from 2018.
Julius Caesar is reputed to have said that the general who rests on his laurels is usually wearing them in the wrong place and the hubris of ministers who believe that they deserve all the credit for the recovery, is a danger to the economy.