Almost every syllable of Paschal’s modest plans had been leaked
Analysis: Only exception was Vat increase on sunbed use because of the link to cancer
We have had some very inspirational and dramatic first Budgets before. Charlie Haughey announced free travel. John Bruton fell on the sword of putting Vat on children’s shoes. Brian Lenihan created a mutiny in over 70s when he announced he was withdrawing their medical cards.
Paschal Donohoe’s first Budget as Minister for Finance was not one of those Budgets.
At times it sounded like the treasurer of a committee reading out his annual report on income and expenditure.
Every single syllable of what he announced on tax and spending was leaked in advance of the Budget. The only exception to that was a Vat increase on sunbed use because of the proven connection with cancer.
So that did a lot to deflate the balloon of expectancy and it was perhaps also subdued because of the limitations imposed on Donohoe. Still, it could be argued he made a silk purse out of a pig’s ear, expanding available spending from about €325 million to €1.2 billion by using some strategic and targeted revenue-raising matters, including stamp duties on commercial developments.
The targets for spending were far harder to pin down. It was spread around to just about every imaginable area. If there were identifiable priority areas or pet projects, they got marginally more funding than other areas.
Housing was a focus, and there were a few new initiatives (including a new fund earmarked for private developments) as well as an increase in capital spending. Another Donohoe interest, capital spending, did well. He has well-established view that without investing in public transport, roads, schools and hospitals, the State and its big cities will begin to lag behind our competitor countries.
You wonder if his initiatives on housing, including more punitive taxes or holding onto vacant sites, will really have the planned impact. There have been so many Government announcements on housing, yet the crisis still looms large.
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At the end of his speech, he did manage to set out his stall. And from a classic Fine Gael perspective arguing for “renewing opportunities” and “creating opportunities”.
If you are looking for a comparison, I think the nearest is not an Irish politician but the former British chancellor, Labour’s Gordon Brown.
Like Brown’s obsession with prudence, Donohoe’s budget, politically, was about proportionality and incremental change.
His closing two sentences gave a fair summary of what Paschal Donohoe is all about.
“We are increasing current spending… so that can can continue, step-by-step, to deliver sustainable improvements for all… to bring a secure and a productive and a fairer future that bit closer….
“Yes there are risks and challenges. We have achieved so much and we can, and will achieve more.”
Opposition speeches, unfettered by the need for a dizzying list of Budgetary changes, tend to be more political in nature. This was no exception with solid speeches from Michael McGrath, Dara Calleary, both from Fianna Fáil, and Pearse Doherty.
It’s a little tricky for Fianna Fáil. They are an Opposition party but also don the Government jersey from time to time, especially on the Budget where the Confidence and Supply Agreement comes into play. The agreement is that Fianna Fáil sit out the vote on the Budget thereby keeping the minority Government in power. In return they are able to extract some budgetary promises from Fine Gael.
McGrath anticipated that Sinn Féin would “savage” his party as much as the Government and got his “pretaliaton” in first, describing Sinn Féin as the classic “hurler on the ditch” which was not willing to enter the fray and do battle.
In the event, there were nothing more than a few digs at Fianna Fáil from Doherty. Indeed, McGrath, Calleary and Doherty doubled-down on some of their main points of attack.
McGrath made a valid observation in relation to the new 6 per cent stamp duties on commercial developments. He said if there is a fall in the volume of such developments, “there will be a hole in the Budgetary arithmetic.” Doherty later repeated a similar sentiment.
Both parties also rooted out a “hidden” reference on page 130 to the Strategic Communications Unit, the so-called “spin department” within the Department of the Taoiseach. Leo Varadkar had said it would be cost neutral but it emerged today it would cost €5 million per annum, half the increase given to the Department of Arts.
Doherty also drove home the ideological wedge in terms of tax concessions, saying his party would have spent that money on necessary services such as health and housing. He pointed out that those earning €20,000 per annum would only get an extra €1 per week, while those earning €70,000 would get six times more.
Yes, there is a distinction, but it shows how modest it all is.
For her part, Joan Burton of Labour made a valid warning about over-optimistic forecasts, especially for Brexit. She warned the promised “jam tomorrow” might never materialise.
That said, modest was the over-arching sense one got from this Budget. It was modest in terms of delivery and also modest in what was delivered.