Facing up to the realities


CREDIBILITY HAS taken a battering in many walks of Irish life, and politics is no exception. The public has become angry and frustrated by the incompetence of the Government and the apparent insulation of many Oireachtas members from the realities of the daily grind. Now, as the State faces its greatest economic challenge, there is a lack of clear and decisive leadership from the top and a tendency by political parties to slip back into traditional role-playing.

Two days of intensive Cabinet discussions this week led to Minister for Finance Brian Lenihan announcing that savings of € 15 billion would have to be made in government expenditure by 2014 and not the €7.5 billion he had proposed a year earlier. Savings would be “significantly front-loaded”, he added. It was clear that despite earlier assurances the worst has yet to come.

It is difficult to judge whether the € 15 billion figure has been designed to soften up the electorate in advance of the budget, to impress the bond markets and the European Commission, or to wrong-foot the Opposition parties. It is probably a combination of all these reasons. But, as Taoiseach Brian Cowen has admitted, the € 15 billion is a notional figure that may grow, or diminish, depending on economic growth and the cost of State borrowing. Mr Cowen also scaled back expectations that the December exercise would be the “Mother of all Budgets” when he told the Dáil yesterday that savings would be “somewhat”, rather than “significantly”, front-loaded.

The three major parties have committed to reducing the deficit to 3 per cent by 2014, as agreed with the European Commission. But they have identified different approaches for reaching that goal. Extraordinarily, probably as much is known about Opposition party intentions as the Government has revealed about its own plans. Fine Gael leader Enda Kenny was right to complain the Taoiseach had failed to offer a single idea on how the situation could be corrected, a theme taken up by Eamon Gilmore of the Labour Party. Projected savings under the Croke Park deal have not been quantified although, according to the Taoiseach, the budget will be weighted towards reductions in spending rather than tax increases.

The Labour Party surprised observers by going head-to-head with Fianna Fáil and Fine Gael on taxation issues. Eamon Gilmore spoke of the need for a 50/50 split between taxation and cuts in spending to bring the deficit under control and to generate jobs. He proposed a 48 per cent tax rate for those earning over €100,000. It may cause negotiating difficulties in the future. It was, however, a refreshing departure from the populist and negative campaigning of recent months. Michael Noonan avoided the perils of the €15 billion hook and made the point that Fine Gael’s stimulus package, funded through the National Pension Reserve Fund and the sale of State assets, could significantly reduce that figure. In general terms, however, this Dáil attempt at consensus-forming represented a considerable disappointment. Time is running out and the public wants the politicians to make the harsh decisions.