Coalition uses spring statment to set the agenda

The well-flagged spring statement from Michael Noonan and Brendan Howlin yesterday was an obvious attempt to seize control of the political agenda and focus debate where the Coalition parties want it. Anybody expecting dramatic policy initiatives will have been disappointed but the statement was never billed as a rival to the drama of budget day.

What it amounted to was a political tactic designed to frame the debate on the central issue of the economy, on which the Coalition has a strong record, and put it up to the Opposition parties to come up with alternative proposals.

While there was some justice in Fianna Fáil finance spokesman Michael McGrath’s dismissal of the exercise as nothing new, the Coalition’s objective was to hold the initiative and keep the voters’ minds on the economic facts of life.

Mr Noonan set out the Government’s record of achievement, pointing out that the public finances had been brought under control with the deficit below 3 per cent this year and the Irish economy now the fastest-growing in Europe. More pertinently, he emphasised the impact of economic growth on the Government’s priority of job creation, with 95,000 new jobs being created since 2012.

All of this means he was able to commit the Coalition to implement another expansionary budget this year to the tune of €1.5 billion, with half of that committed to tax cuts and half to increased spending on public services.

This gives both Coalition parties something to brag about to their core constituencies. Fine Gael can emphasise the tax cuts while Labour will point to the extra resources available for spending on services.

Mr Howlin in his speech naturally focused on the fact that he would have up to €750 million to spend on services. He also announced that he intended to open negotiations with the public service unions on the restoration of at least some of the pay cuts introduced since 2008.

He provided no details about the amount of money that would be available for pay increases but the negotiations will be watched very closely to see how much of the €750 million is swallowed up in public service pay increases and how much is left to improve services.

That could turn into a very contentious issue as the year wears on and the election comes ever more clearly into view. Public servants will be expecting a significant reversal of the cuts but that could leave limited cash to improve services by hiring extra staff.

Claiming credit for the recovery and telling the voters how they intend to proceed for the next five years was a key aspect of the strategy behind the spring statement, but it was not the only one.

The other objective was to put the focus on the Opposition to say what they would do within the constraints imposed by our European Union obligations. Both Noonan and Howlin made a series of references to their determination not to return to the boom-and-bust policies of the past. This was clearly designed to remind the electorate of the mismanagement of the economy by Fianna Fáil in the years leading up to the crash.

Noonan emphasised that the Government’s approach was to build the economy sector by sector to maximise the potential for jobs growth. “Put simply it is designed to ensure that the days of ‘If I have it, I’ll spend it’ are over and this new approach will protect the Irish people from the boom-and-bust policies of the past.

“If these rules had been in place and properly applied and adhered to in the early 2000s, Ireland would have been far better positioned to weather the global financial crisis.”

The Minister also questioned the policies of Sinn Féin and the hard left who have advocated more tax on the higher earners, saying they would actually reduce growth and cost jobs over the next five years. “In fact, the principal domestic risk to Ireland’s continued economic growth is the tax-and-spend policies of the Opposition,” he maintained.

The Opposition disputed that, naturally, and attacked the spring statement both for its content and for containing little that was new. There was some justice in that as the leaking of key features in advance certainly meant that it was something of an anti-climax.

However, a spring statement six months in advance of the budget has been a feature of politics in many other EU countries for years and it is no harm at all that the Dáil should discuss the budget options that will affect the lives of citizens for years to come.