Coalition's focus must remain on the economy

OPINION: Finding ways of cutting public spending and raising revenue from new taxes is where Ministers need to focus

THE COALITION has got itself into a tangle on a number of fronts in recent weeks, and the frustrating thing for Ministers is that this has distracted attention from the fact that on the really big issues they have done pretty well.

Getting the bank debt issue reopened at the recent Brussels summit was an important breakthrough for Taoiseach Enda Kenny, while the seventh visit of the troika during the week confirmed that the country remains on track to meet its programme targets.

Getting the referendum on the fiscal treaty endorsed by the public at the end of May was a major achievement in difficult circumstances. The country’s future depended on it, and the Government, with a little help from Fianna Fáil, rose to the challenge with a strong, coherent and convincing campaign.

Instead of basking in its success on the economic and European Union fronts, the Coalition has got itself bogged down in the final weeks of the Dáil session in public disputes between Ministers over the Croke Park agreement and wrangles over which Oireachtas committee should be given responsibility for conducting a banking inquiry.

A lot of time has also been devoted to the setting up of a constitutional convention whose initial remit is decidedly underwhelming. Whether or not the voting age should be reduced to 17 or the President’s term from seven years to five are hardly weighty matters in the great scheme of things.

Tánaiste Eamon Gilmore’s public commitment to gay marriage, which is another item on the convention’s agenda, has generated some tension between Labour and Fine Gael, and put the Taoiseach under pressure on an issue where he clearly has different views from his partners in Government.

With a children’s referendum planned for the autumn, and one to abolish the Seanad for the middle of next year, there is a real danger that the Coalition could get bogged down in campaigning, never mind a fractious inter-party dispute over issues such as gay marriage.

Ministers should beware the parallels with the 1980s when a Fine Gael-Labour coalition tied itself in knots over a referendum on abortion while crucial decisions on the economy were put on the long finger.

At the beginning of this Government’s term of office last year, Kenny rightly identified the restoration of economic sovereignty as the central challenge facing his administration. Everything else pales into insignificance in the face of that overwhelming task.

The danger about things like the constitutional convention is that change is never as simple as the advocates of any particular cause think, and the time and effort involved in trying to steer a referendum through is a huge distraction from the everyday work of government.

Look at how the referendum to give Oireachtas committees more investigative powers was lost last October. On the face of it the measure should have commanded massive public support, but the opposition of the legal lobby and concerns about how politicians could abuse their power led to its defeat.

That referendum was just one example of how the advocates of a No vote on any constitutional amendment can put the government of the day under severe pressure.

A quarter of all referendums in the history of the State have gone down to defeat, and that trend has been accelerating since the broadcast media was required to give 50 per cent of air time to No campaigns.

Unless the government of the day prepares well and wages a long and committed campaign, referendum proposals can easily be lost. With a commitment to at least two referendums over the next 12 months already made, another EU treaty referendum on the cards and a number more likely to arise from the constitutional convention, there is a real danger that the Coalition could lose its focus on the big issue.

One thing that Fine Gael and Labour need to be wary about is getting hung up on the commitments made in the programme for government. The Nyberg report on our economic collapse identified successive programmes for government as one of the items that led the country over the cliff.

These programmes are often poorly costed and badly thought-out compromises cobbled together in the aftermath of elections between negotiators acting for parties trying to put a coalition together.

Delivering on the small print may be of interest to party activists and lobby groups who have managed to get their pet projects inserted into party programmes but are often of little concern to the wider public.

In any case, if the Government fails to deliver on the economy, the rest of the programme will be irrelevant as the money will not be there to fund it.

The critical challenge facing the Government in the second half of the year is getting the next budget right. Finding ways of cutting public spending still further and raising revenue from new forms of taxation will test the Coalition to the limit, and that is where the focus of Ministers needs to be.

It is getting harder and harder with each successive budget to find new savings. The supreme test in December’s budget will be to find ways of achieving the targets while retaining broad public support for the overall approach. The combination of political skill required to avoid pitfalls while having the courage to do what is right in the long-term national interest will be the real test.

There are already problems with this year’s budget in the health area with a massive overrun of more than €200 million in the first six months of the year. Health spending overruns in the first half of the year have been a feature of public spending in Ireland for a long time but this time around the troika has taken an interest in the matter and action is being called for immediately.

The pressure on the Coalition is not going to ease any time soon so Ministers cannot afford to be distracted from the big issue.

They would do well to remember Bill Clinton’s motto: “It’s the economy, stupid.”