Leo Varadkar fails to establish a ‘Republic of Opportunity’

The big policy reveal in the Taoiseach’s speech to the Fine Gael gathering in Clonmel, Co Tipperary, was that Nama may have its role changed and be given the responsibility of delivering thousands of houses.

But for a Government accused by its opponents of an over-reliance on spin, and which has sought to place an emphasis on strategic communications, the announcement seemed haphazard, last-minute and almost accidental.

There was no reference to Nama in the script supplied by the Taoiseach’s press office beforehand – the announcement about Nama was shoehorned into the speech at the last minute. It was a curious way to go about it.

A subsequent press release issued by the party stipulated that “no decisions have yet been made”.

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However, discussions have been going on behind the scenes for months between Nama and the Departments of Finance and Housing. The Taoiseach, Minister for Housing Eoghan Murphy and Minister for Finance Paschal Donohoe have been kicking the idea around since before the summer.

Nama has declined to comment. However, the agency will do what is asked – State agencies don’t make policy, they implement it. The move would probably require legislation.

There is a logic to it, though. Nama is already partnering with developers to build houses, 20,000 of which are due to be built by 2020. Expanding that role should be relatively straightforward, assuming the plan gets the go-ahead.

It was the main talking point among TDs, Senators and MEPs on the first day of Fine Gael’s two-day think-in ahead of the Dáil resuming next Wednesday.

Corner huddles

At the last such event this time last year the corner huddles hummed with muttering about Enda Kenny’s leadership. But they’ve forgotten all that now; the party is still basking in the afterglow of its own election campaign. The generational change occasioned by that contest is starkly evident. Kenny and Michael Noonan stayed at home.

The political party think-ins are as much about esprit de corps as any serious thinking. Unfortunate Fine Gaelers even have to turn up for a team-building exercise on Friday; you can imagine how painful that will be.

But Taoiseach Leo Varadkar also used the opportunity to send a couple of important signals. In his speech to the conference on Thursday afternoon he sought to put bones on what his “Republic of Opportunity” slogan, coined during the party leadership campaign, might mean in practice.

Yet much of his elucidation consisted of a litany of the actions of Fine Gael in Government – minimum wage increases, more jobs, pension and welfare increases and tax reductions. More of it was about the past than the future.

There will be a major policy review over the coming months to further spell out the Republic of Opportunity idea, and a document produced in time for the party conference in November.

Soundbite

Between now and then everything the Government does is likely to be dubbed another example of the Republic of Opportunity. It’s still a soundbite in search of a policy.

However, Varadkar’s message on Budget 2018 was clear. Public spending increases, he said, will be “modest and sustainable”. But there will be tax cuts for middle-income earners.

His message on health was not on the need to increase investment but on the need to get value for money. “A country with the fifth highest level of health spending deserves to have the fifth best health service. That is our ambition,” he said.

The budget message was very clearly not “one for everyone in the audience”; rather it stressed priorities. How the emphasis on tax cuts and value for money in the Taoiseach’s speech will fit with the coalition’s previously expressed approach of dividing any available resources in the ratio of 2:1, favouring spending increases over tax cuts, remains to be seen.

But the reality, as Varadkar knows well, is that the scope for either tax cuts or spending increases is severely constrained.

Public pay deal

After paying for measures announced in last year’s budget and the public sector pay deal, Varadkar’s Minister for Finance Paschal Donohoe will have not much more than €300 million on budget day.

If he wants more – and he will, and so will his colleagues – he will have to raise taxes elsewhere or cut spending elsewhere. The realm of the possible there is not much more than a few hundred million euro.

A significant danger for the Government is that it talks up a budget that does not meet public expectations; it would hardly be the first time that happened. Indeed, it’s what normally happens.

The business of Government between now and October 10th will be dominated by the spending and taxation decisions to be announced on that day. But the numbers are clear: Varadkar’s first budget will be tight and politically tricky.

In their quieter moments in Clonmel, Fine Gael Ministers ruefully acknowledged that. A Republic of Opportunity, perhaps, but also of political danger.