INSDIE POLITICS:An alternative government may have a better chance of getting agreement on public sector reform, writes STEPHEN COLLINS
GETTING TO the Christmas break intact was a remarkable political achievement for the Fianna Fáil-Green Party Coalition, considering the obstacles it had to overcome since the Dáil resumed in September. The smooth passage of the legislation cutting public service pay for the first time since 1933 was the final act in a momentous few months.
Yet it is hard to believe that the Government which managed such a difficult feat is the same one that less than two weeks ago was on the point of a deal with the trade union movement that would not only have undermined its credibility but put the credibility of the country on the line as well.
In the light of what is happening to Greece, the perception of a cave-in by the Government on a key aspect of budgetary policy could have had catastrophic consequences on international money markets. We are far from being out of the woods yet, as Ireland is still linked with Greece as one of the “sick men of the EU” but at least it can be convincingly argued that the tough medicine has been swallowed and we are on the road to recovery. The last-minute wobble in advance of the Budget is not the only mystery about the Government’s performance. When the €4 billion adjustment package was announced in April, almost half of it was due to come from taxation with the rest coming from spending cuts. By the autumn Brian Lenihan publicly committed himself to getting the entire sum from cuts based on a decision of the Government taken on July 22nd.
The decision to go for cuts alone was brave, and almost certainly the correct one, but it was not traditional Fianna Fáil politics. The attempt to cobble together a deal with the unions appeared like a reversion to a more normal pattern of behaviour but the unexpected negative reaction of party backbenchers put some badly needed backbone into their leaders at a vital moment.
This may be due partly to a shift in the demographic composition of the Fianna Fáil parliamentary party in recent years. About 50 of the party TDs now have backgrounds in the private sector, which represents a big shift since 1997. While there are still 17 party TDs from the education sector, only five are national teachers and there very few union members.
In any case, enough backbenchers opted to reflect the views of the bulk of their constituents, who work in the private sector and who are not union members, and to insist that the Government hold its nerve and do whatever is necessary to save the country from bankruptcy.
Getting to Christmas was the overriding challenge for the Coalition but now that it has been achieved, the question is, what happens next? The challenge now is to come up with another clear set of objectives in the new year to bind the Government parties together and maintain a clear sense of direction. TDs who think they can rest on their laurels might do well to remember Albert Reynolds’s dictum that, “it’s the little things that trip you up” .
Given the nature of the decisions it took in the Budget, a range of interests are waiting in the long grass for the slightest slip-up. One of the nettles that will have to be grasped is the whole question of public service reform. The unions were prepared to offer a range of commitments to change as a carrot if the Government backed away from a permanent pay cut. When the deal fell through the unions naturally withdrew their offer – but they may find it more difficult to take it off the table than they had anticipated.
For instance, during the long-running talks on the peace process it was an absolute given that whenever any of the participants indicated they might concede certain points, or make certain offers, it became inevitable that at a later stage of the process those concessions were nailed down. Once an indication had been given that a party was prepared to do something, it inevitably ended up doing it. That was why Gerry Adams in particular was so cagey about Sinn Féin’s negotiating strategy.
If the same negotiating logic has applied to social partnership, the public service unions will inevitably be asked to deliver on their raft of concessions down the line, because the argument about the rights and wrongs of the case is over. After all, if it was vital in the national interest last week, it should be equally important next week or next year.
The same logic applies to the attitudes of the unions themselves. Reforms are actually in the interests of a majority of their members as well as in the public interest. If not, why were the union leaders prepared to offer an agenda for change in the first place?
The logic of this has not been lost on the union leaders and that is why they are so bitter. What has really soured relations with the Government is the feeling that they were deliberately led up the garden path. While this is almost certainly not true, the fact that so many public service workers believe it to be so is the important point.
Paradoxically, its very success in getting the Budget through may make it impossible for the Coalition to do some of the things it needs to do in the year ahead. That, in turn, could focus the attention of the electorate on the attractions of a change of government.
For instance the breakdown in trust with the unions means an alternative Fine Gael-Labour government would now have a much better chance of getting agreement on a programme of real reform in the public service.
It may also be the case that an alternative government would be able to persuade the electorate of the need for real tax reform.