Cliff Taylor: If you ask canvassers one question it should be this one

It's like we never had an economic crisis and we are back in the Bertie Ahern days of the late 1990s and early 2000s, when elections were fought on how much money the parties promised to stuff into our pockets.

The premise on which the big parties are asking us to vote is that we can go “back to the future” – eliminating the “emergency” charge that was USC, putting money back into hospitals and schools, hiring more gardaí and nurses and not having to pay a cent more in water charges or property tax.

There are variations between the parties, for sure. But once Fine Gael promised to abolish USC, Fianna Fáil and Labour quickly followed by committing to getting rid of it for most taxpayers.

Maybe this is what people want to hear; some reports say the USC promise is going down well on doorsteps.

But if the election comes down to a battle of the soundbites, and a competition about who can eliminate USC quickest, it will be a pity. Because we cannot be sure we will be able to afford it, and in any case there are bigger things to talk about even if they do not all fit neatly into the kind of risk-free electioneering which all parties try to engage in.

Free pass

In a way the parties have been given a free pass to engage in giveaway electioneering by a new concept that sounds like a

Star Trek

episode – “the fiscal space”. This is the amount of money which the

Department of Finance

estimates will be available to add to spending or cut from taxes over the next five years.

This will amount to some €8.5 billion over the next five years, or about €10 billion if the EU Commission approves a small change to our targets. Cue a debate on how to spend it, ostensibly with the imprimatur of “official” figures.

Fiscal space calculations are a valid exercise but we all know the world never works out as expected. The forecasts for our economy in the years ahead could be as reliable as a 2007 bank audit if the world environment changes.

In the short term the economy has a lot of momentum. But there are plenty of warning signs internationally, not to mention the looming threat of Brexit. If growth slows here the “space” will shrink – there will be less cash to spend.

Public spending

And this isn’t the only question mark over the figures. The head of the

Fiscal Advisory Council

, Prof John McHale, told RTÉ radio yesterday that he felt the official figures did not put aside enough money to account for inevitable pressures on public spending and for adjustments for inflation.

He estimates the fiscal space could be only €3.2 billion on current figures, which would be less than €5 billion even if the EU gives the green light to changing our targets. This would cut the budget giveaways in half and knock on the head the plan to abolish USC.

So the first question for your friendly canvasser is where do his or her party's priorities lie? If there is, say, €5 billion instead of €10 billion, what will you not do from your menu of tax, spending and public finance measures.

Given the extraordinary number of factors in our favour just now – low interest rates, a generally weak euro, high growth – there is a really strong case for getting rid of annual borrowing and reducing our debt burden as quickly as possible to really lower our future risks.

This does not mean no tax cuts or spending increased, but it does mean prioritising cutting the deficit. It means a bit less of the “payback time” rhetoric.

It is the kind of nuanced argument that nobody looks likely to try to make during an election because they feel it is not what people want to hear.

Big decisions also need to be made on public services. EU rules will restrict spending growth, particularly over the next couple of years. We need to decide where to spend our limited additional resources, taking a realistic view of providing for an ageing population, as the Fiscal Advisory Council has warned.

Investment shortfall

And someone needs to tell voters that we face a massive investment shortfall and that fixing this will involve us paying one way or another.

Investment in water means water charges, more roads means tolls and investing in third-level education requires third-level fees. Either that or we pay for it all via higher taxes. Or totter on with under-investment, with a considerable economic and social cost.

Then there is the question of how we pay for it all via taxes. Eliminating USC, neutering the residential property tax – by fixing valuations until 2019 – and avoiding any mention of higher charges for water or anything else means we will narrow in our tax base again.

This time it won’t rely on transactions based on property sales. Instead we will rely on the fortunes of 10 multinationals and around 150,000 PAYE and self-employed taxpayers who earn over €100,000. These two categories are now responsible for one quarter of all tax revenue collected – and rising.

Yes, the turnaround has been extraordinary. And, yes,we have real options now, particularly if growth holds. It’s just that having an election based on the certainty that this is going to go on for ever doesn’t seem very clever.

Going back to the way we were, with pre-crisis tax and spending levels, may be a nice idea but it is simply not an option.