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Comment: Should Bertie Ahern Sack Minister Mary Harney from the Irish Cabinet?

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In a cabinet of mediocrities, there is no shortage of candidates for the booby prize. Mary Harney has been singled out because of the wide chasm between the rhetoric and reality.

July 26, 2004--Mary Harney is the leader of the Progressive Democrats (PDs) Irish political party and both Tánaiste (Deputy Prime Minister) and Minister for Enterprise, TradeMary HarneyMichael McDowell Minister for Justice and Employment in the Irish Cabinet. She has held her current Ministerial position for 7 years and has expressed a desire to move to another ministry. Ms. Harney's party was established in the mid-1980's and adopted a variation of the slogan of the UK Liberal Democrats-Breaking the  Mould of Irish Politics- and in the current governing coalition combination, it has had a representation in Dáil Eireann (the Irish Parliament) of 4 to 8 members in the period 1997 to date. Nevertheless, on the party's website there is the bold claim that it's 'credited with major responsibility for Ireland's economic boom by pioneering tax reform, deregulation and competition to end mass unemployment and emigration.' Michael McDowell, PD President and Minister for Justice has in the past stated that the party has a choice of being 'radical or redundant' and on his website states: 'We saw the possibility of a different way for Ireland – where radical tax reform, pro-enterprise policies, competition and deregulation, coupled with social partnership, could lead the country away from disaster to become a model of growth and employment generation.' 

While exaggeration is the stock-in-trade of all politicians and one-sided claims of responsibility for positive developments are par for the course for parties in power, coincident with a disavowal of responsibility for bad news, the PDs' claim to be primarily responsible for what is termed as the Celtic Tiger, merits a brief review. Against a backdrop of a decade that was dominated by UK Prime Minister Margaret Thatcher's privatisation and market oriented reforms; US President Ronald Reagan's tax-cutting supply economic policies and Mikhail Gorbachev's efforts in the Soviet Union to reform the central planning system, the Fianna Fáil Government which was elected in 1987 cut public spending, promoted tax reductions and supported the establishment of an International Financial Services Centre in Dublin, which became a spectacular success. The PDs became a junior member of a coalition with Fianna Fáil in 1989 and the Government survived three years. Ireland entered the 1990's with an experience as an attractive base for US multinationals which extended over three decades. Significant sums had been invested in education and telecommunications in the 1980's and in 1992 the Taoiseach Albert Reynolds won approval from the European Union of new structural grant aid worth  IR£6 billion. The American economy took off on an unprecedented boom and American companies such as Dell and Intel became leading employers in Ireland. The Celtic Tiger boom was already underway when the Fianna Fáil-PD Coalition took office in July 1997 and the Minister for Finance Charlie McCreevy made significant cuts in taxes as money flowed into the Exchequer.

In a cabinet of mediocrities, there is no shortage of candidates for the booby prize. Mary Harney has been singled out because of the wide chasm between the rhetoric and reality. Instead of radical reform, what has been offered are headlines with a reliance on consultants and advisory groups to fill in the blanks. A onetime courageous politician has been a cheerleader for tax cuts in office during a time of plenty while her approach to the party's much touted 'deregulation and competition' has been characterised by timidity and inertia.

Last May, Mary Harney said in an address to her party members at the launch of the Progressive Democrats' Local Elections' Manifesto: 'In this manifesto, we are... committed to ending private windfall profits arising from re-zoning decisions.' In an ad-lib, she had the gall to warn that she might have the Competition Authority investigate hoarders of development land. It's no surprise that nothing has been heard since from Ms. Harney on her plans for reforming the corrupt system of development land price determination. However, the ad-lib reference to the Competition Authority was very revealing. Ms. Harney has avoided decisions on every critical issue of deregulation and competition under the control of the Irish Government, by requesting the Competition Authority to produce a report. Nevertheless, she is far from shy about extolling the virtues of deregulation such as in aviation and telecommunications, which has been mandated by the European Union. 

One clear result of failure to tackle deregulation and competition issues is our ranking as most expensive of the European Union's 25 member countries for food and drink and Dublin's rank as the 14th most expensive city in the world. Ms. Harney claims credit for tax reform but increases in indirect taxes have compounded our high cost base. (See the Finfacts Price Comparisons Page and  European Union Tax Rates 2004 and Taxation Burden 1995-2002). Her name has become synonymous with high prices and her Marie Antoinette style recommendation to 'shop around' reflected her lack of concern for consumer issues.

In a seven year period there are inevitably some legislative achievements such as the post-Enron changes in company law and its enforcement. In addition, the recent reductions in insurance charges shows what can be achieved if there is a serious political commitment to deregulation and competition. However, Ms. Harney's overall ministerial record has been poor and she has expressed a desire to have a new position in the Government. Ms. Harney will leave a legacy to her successor of a) action required on deregulation and competition in several areas of the Irish economy b) policy responses to the Enterprise Strategy Group on its recommendations on an enterprise strategy for growth and employment in Ireland up to the year 2015 c) the response to the Consumer Strategy Group's report due in late 2004, on enhancing consumer protection and ending extensive price profiteering.

Mary Harney is the head of a party which has sought to present itself as a champion of radical reform but real progress has been glacial. She has been a strong supporter of the shambolic decentralisation programme and the rollback of the baby steps which had been taken in the 1990's in providing greater transparency for public decision making. Welcoming new American companies to Ireland has been the very public part of her job but so much has been neglected. As the head of her party, Bertie Ahern does not have a realistic choice but to give Ms. Harney another position in Government. She does not deserve it.

- Michael Hennigan

Our Comment feature has been incorporated in the:

The Finfacts Ireland News & Comment  Service from October 2004

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