Bread and butter issues matter most

When it comes to the staple diet of bread and butter, latte and linguini issues, does it matter who is in government? To the …

When it comes to the staple diet of bread and butter, latte and linguini issues, does it matter who is in government? To the committed political fans, it always matters, viscerally. But strip away the tribalism of your crowd versus their crowd, who's in and who's out. Strip away, too, the distracting illusion that an alternative set is ready to govern with unprecedented public cleanliness and moral hygiene behind that pane of glass, again.

Leave these aside, not out of cynicism about ideals of democracy, but because we are not really in a revolutionary crisis where a radical and transformative improvement is either possible or imminent. We will have neither 166 white-suited Martin Bells nor 166 Joe Higginses attempting to form the next government.

People may be cynical about politics but they are never tired and cynical about bread and butter. In opinion polls they have pointed to issues that affect them immediately - inflation, housing, transport, childcare costs. Tax has not disappeared as a political issue, and never will. Jobs are still a political issue for some areas.

The apparent consensus of social partnership has not decided everything either. If it had, why would SIPTU's Des Geraghty now want to begin negotiations on the next budget - a presumption in itself, but one which shows that there is plenty to play for?


I don't think the chances of lowering inflation would be improved by a change of government. No Irish government can affect the exchange rate between the euro and sterling, which greatly affects our inflation. Similarly, no Irish government has any influence over international oil prices.

The present Government's approach to promote competition, the non-cosmetic item on the list, will reduce inflationary tendencies after a few years, not now. The best that can be hoped for is that the principle of "first, do no harm" will inform any government dealing with inflation.

Mr McCreevy and the Irish Congress of Trade Unions find common ground in resisting the idea of abandoning or reversing tax cuts for average earners in order to counter inflation. Is there a greater risk that an alternative government and a less opinionated finance minister would be more inclined to listen to the European Commission and the ESRI, even though no one has stated by how much the postponed tax cuts would reduce inflation?

Mr McCreevy's much-derided arrogance could be called steadfastness in other circumstances.

Whatever the flaws in the housing measures introduced recently, no alternative, compelling case has been made for how a faster programme of house-building would be achieved or how house prices would be lowered more quickly. Supply, supply, supply is still the main answer.

But there are substantial differences over tax. No alternative government would be committed to lowering the higher rate of income tax from 44 per cent, despite the benefits of attracting and retaining high value-added jobs in the country. This argument and any other in its favour will simply not be entertained by Labour. Fine Gael would introduce a middle rate of 35 per cent, a positive step but one which avoids the question about the appropriate highest level.

Similarly, no matter how much the revenue raised at the 20 per cent rate of capital gains tax, the Labour party would want substantially to increase that tax as a matter of principle. It is entitled to hold such a principle, even as it knows its likely effect, but it is mistaken to do so.

Individualisation of the tax allowances may be reversed, but only maybe, because social welfare individualisation would proceed and the logic of a similar approach to tax would be clearer. Also, the numbers might convince a new government.

We do not know if the widening of tax incentives for self-employed pensions savings would be a priority for an alternative government. Probably not.

There is also a difference of commitment to market liberalisation and the introduction of competition in previously protected areas such as telecommunications and transport. Without a fundamental commitment to market liberalisation, it may not be addressed with the required urgency or willingness to confront vested interests.

Policy differences exist over the extent of private sector involvement in infrastructure. This week, Labour's Emmet Stagg opposed tolls for new motorways. Infrastructure will not be delivered fast without private sector involvement, and user tolls are a proven way of financing them. A distaste for the profit motive and user charges can only increase the risk of slow delivery of projects.

There are other bread and butter issues which come more under the heading of social policy - pensions, child benefits, healthcare - and which are very close to people's interests and can influence elections greatly.

I hope the next election will not be an exception. Despite everything, I expect it won't be, either.

Oliver O'Connor is editor of the monthly publication, Finance. E-mail: