Bogus politics and bogey politics
I noticed that both Joan Burton and Richard Bruton used golfing metaphors when lambasting Brian Cowen last night for his performance on the economy. Joan has a penchant for far-flung metaphors which she applies more thickly and copiously to her copy than fake tan at a debs’ ball (you get the drift). Anyways, poor old Cowen was more Darren Clarke than Padraig Harrington. Our golfing Taoiseach was below par everywhere else but on the golf course.
This blog has previously (and almost passim) defended Cowen’s right to be on holidays. But that was until this blog realised that the length of his holidays was almost that of a university lecturer. Weeks ago he was playing golf. Then he was up on a trailer in Tullamore belting out a pub ballad. But he was neither seen nor heard in Dublin. His office said that he was working away. But there was no visibility. Across the water Alastair Darling was telling the Guardian that the UK was facing its worse downturn in 60 years. David Milliband was huffing and puffing at the Russians about Georgia. And even Gordon Brown announced his arrival back from holidays with a bare-knuckled article about Russian agression in the Observer last Sunday.
We were told he was working away. I’m sure that he was. But part of the job is communication and giving reassurance to the electorate. And it is absolutely astounding that we have really heard zilch from the Government since July when things were bad but nothing like as bad as they are now, when the tax take looks like it will be at least €5 billion beneath expectation.
The sheer extent of the property bust is shocking. Stamp duty income to the Exchequer is running at only half of what it was last year. Capital Gains Tax has also slumped badly as have all other taxes associated with construction (including VAT which is paid for all the materials used in the building trade). This morning’s figures from the CSO which showed that there are now 250,000 unemployed doesn’t exactly fill anybody with confidence.
With the most potent monetary tools (currency devaluation and variations in interest rates) now out of our hands, there will have to be cut-backs, very strong limits on pay rises, and active efforts to control inflation. But with such a gaping hole in the public finances, there will soon be a real need to tackle one of the sacred cows that has grown up around the Celtic Tiger – the low tax regime. That was fine during a boom when property taxes catalysed everything else. But with property in a slump, there are already serious shortfall … the Government may eventually be required to look at income taxes.
It’s about time that Brian Cowen and co spelt out how they are going to do it…