Well done to Michael Noonan. He is indeed an able and articulate politician, and best wishes to him in his new role as leader of his party. My outside bet for leader into the future "on the other side" was always Ivan Yates.
Very bright and still young, he could always be sent on to the most hopeless wicket and be expected to hold a steady bat. I wish him well in his decision to retire from the fray and his going is a sore loss for Leinster House.
The (premature) pre-election dramatics have begun. The past political week has seen Fine Gael cross to the left and Labour cross to the right like giddy youths dancing the Walls of Limerick. It was satisfying to see the Opposition take life after a long period of directional reflection. Fianna Fail needs the spur of lively opposition, the party undoubtedly performs best while on its toes.
The Fine Gael move to the left remains largely cosmetic. That party's main policy plank, "The Plan for the Nation", is now over 15 months old and to many it seems fairly jaded at this stage and would not really be presentable to the electorate today. It owes its existence to the Government's National Development Plan. Back in November 1999, as part of a public relations strategy, it was launched just prior to the NDP launch in order to spoil the publicity gain for the Government. While sections of it were updated three months ago, it would form a very weak manifesto. It remains to be seen whether left-wing rhetoric will be matched with policy.
The Labour Party's move rightward has been going on for quite some time, however, and at this stage has quite a sizeable policy basis. That party has certainly travelled a long way since the early 1990s when, with the Berlin Wall barely down, the Labour leadership began to host breakfast conferences in the Mont Clare Hotel for the leaders of corporate Ireland.
This week that party took a further step to the right. I honestly never thought I would see the day that the Labour Party would criticise Fianna Fail for spending too much money on health, education and social welfare.
USING the pretext of the European Commission's recommendation on Ireland's fiscal policies, Labour has lashed out at the unprecedented rise in public expenditure announced in last December's Budget and Mr McCreevy's staunch defence of this necessary and urgently needed spending. I am a long time in Dail Eireann now, too long maybe, and some things will never cease to amaze me but then politics does have a habit of lacking consistency.
Labour criticism of high levels of social spending is even more astounding when one considers that its fiscal policy document actually calls for a higher degree of social spending than we currently enjoy. Labour now stands distinctly to the right of its British counterparts: this week UK Labour Chancellor Gordon Brown, in a move similar to that of Mr McCreevy, accused the European Commission of getting it wrong after he, too, was warned to cut back on public spending. The Irish Labour Party seems to be moving rightward and nailing its colours to the (again premature) pre-election mast.
The finer points of the European Commission's recommendation on our present fiscal policy and the reasoning behind it will be impenetrable to most of us. Indeed, for much of the population, I suspect, economics remains a dreary and unfathomable science. Many of us simply do not grasp the economic intricacies and the minutiae hidden behind the opaque linguistic veil of GNPs, GDPs percentages and figures. We know things are far better now than they were, say a decade ago. We have grown accustomed to, and most certainly enjoy, the reassuring sound of George Lee, Jane Suiter, Dan McLoughlin and the ESRI informing us just how healthy the economy is at the moment. The facts they present are plain enough:
Ireland's growth rate is more than three times the average of the other EU member-states.
Not only have we balanced the books, but we have a 4.6 per cent surplus, the largest of any EU member-state.
Our unemployment is half the EU average.
We enjoy the lowest degree of taxation of all EU member-states.
Our national debt is tiny, no matter how it is measured, in comparison with the EU average.
Inflation is falling. The majority of experts have agreed all along that this would happen. Other EU states now have higher inflation rates than Ireland.
Merely tightening Irish fiscal policy will not reduce inflation considerably unless a couple of billion pounds is removed from the Irish economy.
Bearing these facts in mind, most people, I believe, are supportive of Mr McCreevy's stance on the European Commission's recommendation. We cannot cut back on spending which is so necessary, bearing in mind that for the first 75 years of this State's existence, the areas of health, education, and social welfare were largely under-funded. Taking into account the fact that the causes of Irish inflation are largely externally driven, this would probably be both needless and painful.
I also believe that we could not have cut back on the tax cuts which were announced in December's Budget. These tax cuts were necessary for the continued success of Social Partnership and to avoid a wage price spiral. In any case, it is doubtful whether these tax cuts have had any real effect on inflation. As Mr McCreevy pointed out in the Dail last Tuesday afternoon, the Economic and Social Research Institute calculated last December that £500 million in additional expenditure by way of taxation cuts would have an effect of increasing inflation by only 0.13 per cent over the next three years.
By no means could one describe Mr McCreevy's stance on the European Commission's recommendation unsound or illogical then. On balance, I believe any good Minister would defend his policies when the record shows them to be sound and effective. In the case of Mr McCreevy, his policies have proved spectacularly effective.
