Big prizes set out in Coalition’s progress report are years away
Upbeat Kenny acknowledges that recovery remains a work in progress
Taoiseach Enda Kenny and the Tánaiste Eamon Gilmore at a joint press conference at Government Buildings on Tuesday where they presented the latest progress report of their Coalition Government. Photograph: Eric Luke
The Coalition’s latest annual report on the programme for government marks the imminent beginning of its fourth year in office.
With the bailout behind it, the Government’s prime task now is to create as many jobs as possible and to continue the effort to assert control over the public finances.
If the overwhelmingly positive tone of the “after the bailout” report was predictable enough, at least Enda Kenny had the candour to say the pursuit of praise in politics is but the pursuit of fools.
Still, this did not prevent the scheduling of a long session in the Dáil yesterday for “Statements on the Government’s Priorities for the Year Ahead” .
In essence, the document recapitulates promises made in the economic strategy published in December.
While the latest report itself is not short on ambition, it is only over a longer horizon that the most glittering prizes would be achieved.
It is already the case that Kenny and Tánaiste Eamon Gilmore must bring the budget deficit below 3 per cent next year to meet EU obligations. However, the deficit itself would not be eliminated until 2018.
Next five years
While the aim remains to bring unemployment below 10 per cent by 2016, full employment is not anticipated under the current plan until 2020. Only then would all of the jobs lost in the crash be regained – and that embraces the rather ambitious assumption that everything goes more or less well in the next five years.
This is to say nothing of day-to-day economics in political real-time.
Given Ireland’s exposure to the vicissitudes of the euro zone, British and American economies, the recovery here is especially dependent on the tide of events in the outside world. While strong international growth would make Ireland’s task easier, the opposite is true as well.
The plan assumes growth quickens next year to 2.5 per cent of output and, again, in 2016 to 3 per cent, and it is predicated on the achievement of 2 per cent growth in the current year.
Even if that growth target is realised, Kenny and Gilmore will still have to trim next year’s budget by €2 billion. Any dip below that growth rate and yet more cuts and tax hikes would be required to meet the immutable 3 per cent deficit target, putting Fine Gael and Labour under pressure to divine where the axe falls.
Although talk continues of income tax cuts for some earners if conditions allow, the fact remains that 2015 will also see the introduction of new water charges.
This is on top of the new property tax, the full brunt of which hits only in the present year. For all the talk of giving something back to hard-pressed taxpayers, that is the truth of the situation.
In spite of the upbeat assessment that the Irish economy is on the right track, Kenny acknowledged that recovery remains a work in progress. He also said he recognised that too many people see no improvement in their daily lives.
From Gilmore’s perspective, the test now is to determine how people share in the recovery. While the document itself says 90 per cent of the budgetary correction is already done, it makes clear that “difficult decisions” still lie ahead.
That is undoubtedly true. If the recovery proceeds as planned, the tricky decision will centre on the division of fiscal spoils between Fine Gael and Labour. If not, the challenge is only magnified.
The document sets out the many boxes ticked since Kenny and Gilmore took office. While there is something of the visionary grand plan about the whole affair, elections in May stand as a major test of public opinion on the matter.