Economy

A brave new world? Not when it comes to pensions

Cantillon: State pension issue emerges as central bargaining chip in formation of new administration

Micheál Martin has revisited the pensions issue which became a hot election topic. Photograph: Henry Nicholls/Reuters

Tue Apr 28 2020 - 05:40

If there’s one thing Ireland Inc will need in any new government, it is pragmatism.

With €20 billion odd required to help tide the State and its workforce over the crisis in a country that already has one of the highest rate of national debt per head of population, there will be a fine line to be drawn between continuing to provide the support that individuals and the economy require and the unsustainable spending that could see us once again sliding towards the abyss – a basket case banished from the global debt market.

That, the thinking goes, is one of the reasons why both Fianna Fáil and Fine Gael are so keen to persuade the Green Party and others to join them in forming a government that has some chance of lasting the course rather than relying on the political vagaries of a disparate group of independents with very local , and potentially costly, priorities.

All the more reason then to be alarmed at the resurfacing of the state pension issue as a central bargaining chip in the formation of any new administration.

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Pensions became a hot election issue when the traditional parties found themselves outflanked by a populist campaign from Sinn Féin. The parties scrambled to recover lost ground, hastily adding pension promises to their manifestos.

But that was then. If nothing else has been agreed, the presumption was that all manifesto promises had been quietly shredded by the new economic realities of Covid.

Micheál Martin’s decision to recommit to retaining or even restoring a state pension promise that was considered financially unsustainable even in the economically fulsome days of the post-crash recovery is an alarming sign.

It gives the lie to all the admittedly groundless talk about how, chastened by this brush with pandemic, things will never revert to the old ways.

No room for populism then? Or the old politics of playing to the polls? Don’t you believe it.

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