Purse Strings


When the Minister for Finance stands and delivers his budget in the Dail on Wednesday he does so with the advice of several different sectors still ringing in his ears. Listening to these lobbyists and grappling with their great expectations has played a significant part in preparation for the budget. Since his appointment as Finance Minister, Mr Charlie McCreevy has been approached by groups representing everyone from employers to the unemployed, all of whom are trying to make an impact on the future fiscal policies of the Government. How Mr McCreevy will attempt to reconcile these widely differing interests remains to be seen - a bouyant Celtic Tiger economy makes their demands slightly harder to ignore. But the tactics used by lobby groups have undergone a transformation in recent years according to Mr Brendan Butler of the Small Firms Association (SFA).

"The process of lobbying has become very sophisticated and moved on from the point where the interested party went in to meet the Minister with a shopping list as long as your arm," he says.

Those attempting to have their suggestions included in the budget have learnt, sometimes to their cost, that they must be more focused and direct in their approach. A good example of this is the SFA itself. In 1995 it approached the then Minister for Finance, Mr Ruairi Quinn, with 16 items it felt needed urgent redress. "At the end of the day we got very little indeed because the Minister and his senior officials really needed more guidance as to the priorities," says Mr Butler.

In 1996 the SFA went back to him with one item, the issue of the small business rate of corporation tax. "At the time the rate was 40 per cent on any profits leaving small businesses with little money to reinvest," he says. In the 1996 budget, largely as a result of their lobbying, the rate was reduced to 30 per cent. This gave companies a net after-tax gain of up to £4,000 per annum each.

This year the SFA presented two key items, including a further reduction in corporation tax and the provision of a tax credit for any company that takes on extra staff. "This has been the first time we have lobbied in a strategic, committed and focused manner and we have been chasing our ideas with anyone who will listen," he says.

A similar approach has been adopted by the Institute of Taxation. Mr Pat Costello of the institute points to their use of a theme to present their pre-budget submission.

"The theme this time around is `cutting capital taxes to help growth' and we are advising the Minister for Finance that this will be good for the tax-payer and good for the Exchequer," he says.

"We use a thematic approach rather than going through an A to Z of taxation," he says. "We set up a tactical committee and we made our submission to the Minister for Finance. It was also important to get coverage in the media, our submissions are generally much more focused now".

A spokeswoman for the Department of Finance explains how this year the structure of the lobbying procedure has changed: "In the run up to the last budget there was a committee system in operation for pre-Budget submissions. This year because the Budget is being delivered in December instead of January these committees were not operable," she says.

As a result groups such as the Conference of Religious in Ireland would hand their submission to the Minister for Social, Community and Family Affairs, Mr Dermot Ahern, and agri-business group representatives would approach the Minister for Agriculture, Mr Joe Walsh. "There is a whole media hype surrounding the submissions now," she says. "They are generally a good indication of feelings on the ground and it is a case of building your case and getting it out there in whatever way you can. There are no guarantees but certain points may be taken on board". Mr Brian Geoghegan, director of economic affairs with employers group IBEC says that his organisation is advocating among other elements a "significant reduction in corporation tax".

"Our main thrust would be to reflect what the business community would like to see happen and to make sure the Government keeps within the context of Partnership 2000. In recent years we have cast our submissions in a strategic framework and have been looking at a long-term perspective particularly in relation to the reduction of personal tax," he says. Ms Catherine Heaney of the Irish National Organisation for the Unemployed outlines her organisation's preparation for the budget:

"It started soon after the last budget was delivered in January," she says. "We analysed the submissions we put forward the last time, realised which objectives were outstanding and assessed them as to why our demands didn't get heard," she says.

Most of the year has been spent gathering information from their welfare rights team and INOU members themselves. "We start talking around August and begin to write our pre-Budget submission in September. When the submission was launched we circulated it to the media and to key Government officials including the Tanaiste, senior civil servants and the Minister for Social Welfare," she says.

As members of Partnership 2000, the latest national agreement, the INOU have already been part of negotiations to decide certain areas of the budget. In the final days of lobbying the INOU has joined up with seven national-anti poverty networks under the slogan "Will the government listen to the strongest demands or the weakest voice?"

A policy on taxation - suggesting an increase in tax free allowances - was also released. "Even in the final days there is still influencing to be done," says Ms Heaney.