INSIDE POLITICS: Ultimately it will be deeds, not words, that will show whether or not this Government is up to the job, writes Stephen Collins
IT WAS clever of the Government to kick off the political season with a bang by bringing forward the budget by two months. As a political manoeuvre designed to show that Brian Cowen and his Ministers are on top of the deteriorating economic situation, and primed to take whatever remedial action is required, it made sense.
The ominous feeling of drift that had begun to insinuate itself into the public imagination over the summer has been dispelled, at least for the present. The Taoiseach and his Ministers have regained the initiative by the simple expedient of signalling clearly that they are working on a plan to get the country through the deepening economic crisis.
Of course, that is the easy part. The real test will be the actual content of the budget and the linked series of announcements to encourage economic activity that were promised on Wednesday after the first post-summer holidays Cabinet meeting.
Ultimately it will be deeds, not words, that will show whether or not the Government is up to the job.
It is clear from the current vantage point that Brian Cowen's big mistake was his refusal to acknowledge the looming economic problems that were widely apparent after his party's election triumph last year.
The budget he announced in December, 2007, has now gone hopelessly off the rails. While he could hardly have been expected to anticipate the full extent of the impending collapse in tax revenue, the failure to appreciate what was happening in the economy was a serious error of judgment.
On the political front, it was also an error not to rein in spending in the first budget after the election. Big spending increases in his previous budget of December, 2006, may not have been all that wise in economic terms, but pre-election giveaways are what politicians do, particularly Fianna Fáil politicians who know how to win elections.
The inexplicable decision was to leave the spending floodgates open when the election was safely in the bag and Fianna Fáil back in power for the third consecutive term.
The contrast with Charlie McCreevy's behaviour in the summer of 2002, when he clamped down on public spending before the Fianna Fáil victory cheers had even died down, is telling. McCreevy took a hit in terms of popularity, but he set his Government up nicely with plenty of cash in the kitty for the long run in to the 2007 election.
By getting both the political cycle and the economic cycle wrong, Cowen has stored up big problems for himself. Still, if he knuckles down and backs his Minister for Finance Brian Lenihan in insisting that tough medicine has to be taken by all sections of society, particularly the well-off and those privileged to have the security of public sector jobs and pensions, there may still be time to get the political cycle back on track.
That certainly won't happen in time for the European and local elections next year, but in truth they don't matter all that much.
Fianna Fáil took a hammering in both in 2004 and still bounced back to win the general election. In any case, the financial crisis facing the Government is far too serious to allow worries about any kind of elections to impinge on decision-making.
The important thing now is that the Government gets it right for the country's sake, regardless of the unpopularity it may have to endure. The lesson of Irish political history over the past few decades is that it might not even become all that unpopular, as long as it is seen to be doing the right thing.
The electorate has an instinctive understanding that tough decisions need to be taken. Various vested interests will undoubtedly oppose cuts and attempt to cloak self-interest as the national interest but, as Ray MacSharry showed in 1987, the country will ultimately back tough decisions.
One powerful vested interest that will have to be resisted at all costs is the construction industry. Any hint that taxpayers' money is being used to bail out the country's fat-cat developers, under the guise of helping first-time buyers, will undermine the Government's credibility. It will also do nothing for the economy, except prolong the downturn up to and beyond the next election.
The other powerful vested interest which has to be taken on is the public service. The latest national employment survey for 2006 published yesterday by the Central Statistics Office again points up the disparity in incomes between the public and private sectors.
Average hourly earnings were €25.47 per hour in the public service, compared to €17.11 per hour for the private sector. Absolute job security, protected working conditions and extraordinarily generous pensions make that basic disparity far wider.
The first clear indication of whether the Government is capable of dealing with financial crisis will be whether Brian Cowen insists on a significant pay pause in the public service.
He was absolutely right not to cave in to pressure and settle for a deal the country could not afford a month ago. His resolve will be tested again in the coming days. No deal will be better than a bad deal.