Parties have tough decisions in new economic reality

OPINION: A general election may be needed for the public to focus on the choices facing the political parties, writes Stephen…

OPINION:A general election may be needed for the public to focus on the choices facing the political parties, writes Stephen Collins

THE COLLAPSE of public confidence in the Government and the Taoiseach, as revealed in the Irish Times/TNS mrbi poll, suggests an early general election may be the only way out of the political and economic morass in which the country finds itself.

Ministers have been stunned to discover over the past month that the public seems utterly unwilling to accept public spending cuts of any kind, or at least any spending cuts proposed by this Government.

The heart of the problem is that Brian Cowen and his Fianna Fáil-Green Party Coalition do not have a mandate to implement the policies now urgently required at a dangerous moment in the country's history.

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All of the major political parties fought the last election on spurious tax-cutting and extra spending policies but, in the end, the public turned to Fianna Fáil as the party it thought best equipped to run the economy.

The startling collapse in the public finances has revealed that the economy was appallingly run for the past few years. The response of the public has been to refuse to accept the medicine prescribed by the Government deemed responsible for the economic mess. The irony is that the medicine is actually not nearly strong enough, and that far deeper spending cuts will be required over the next few years if a serious long-term recession is to be avoided.

The Opposition parties and much of the public have been claiming that, while they recognise the need for cuts, the particular cuts in the Budget hit the wrong targets.

There may well be justice in that argument but Irish political history shows that spending cuts of any kind are always the wrong cuts as far as somebody is concerned.

There is a strong argument that the only way to focus the public mind on the real choices facing the country would be to have a general election in the next few months, with a full and frank debate between all the political parties on the best way forward.

Most Fianna Fáil TDs would react with horror to such a prospect as there is hardly one of them with a safe seat. However, an election that produces a government with some kind of mandate would be far better for the country in the long term than the continuation of a Government that has lost its authority to rule.

Such an election would not necessarily have a predetermined outcome. A Fianna Fáil party that campaigned honestly, on a platform that spelled out the nature of the decisions that have to be taken, might do better than many of its TDs expect.

If they want a historical precedent, Éamon de Valera called snap elections on no less than three occasions. In 1933, 1938 and 1944 he dissolved the Dáil less than a year after taking office when he felt he did not have a sufficient majority to implement his programme. On each occasion he returned to power in a landslide with a clear mandate to govern.

It is no insult to Brian Cowen to say that he is not de Valera and there were no opinion polls around in those days to spell out the scale of the problem faced by Fianna Fáil. Nonetheless, the political lesson is that there are times when political leaders can confound their enemies by taking their courage in their hands and seeking a mandate from the people.

That said, it would take a political miracle for Fianna Fáil to return to power in an early election. Going on the result of the poll, the most likely outcome at this stage appears to be a Fine Gael-Labour government, possibly involving the Greens.

The key point is that, whoever takes power, the government will have a mandate to govern in tough times. Such a new coalition could struggle in the face of the deep structural problems in the public finances. It may well take a couple of elections and a return to the political instability of the early 1980s before a secure government with a popular mandate to deal with the crisis is in place.

That is not the worst thing that could happen as it would ultimately force all the political parties to face up to reality. The problem about the 1980s was that it took so long to get a consensus. Charles Haughey's Fianna Fáil acted in a deeply unpatriotic way between 1982 and 1987 by opposing every effort made by Garret FitzGerald's government to deal with the crisis and inflaming sectoral interests at every opportunity.

Whatever happens over the next year or two, the current crisis demands that all of the major political parties make a serious effort in the national interest to deal with reality.

Encouraging the public to indulge in the fantasy that public spending can continue at current levels without a massive increase in taxation that will inevitably cripple the economy will only make things much harder in the long run.

Probably the most serious mistake made by the Cowen government was the decision to honour the agreement to pay a 2.5 per cent pay round to the entire public service on September 1st when Ministers knew that tax revenues were collapsing. That decision cost the exchequer €155 million this year and will cost €465 million in a full year.

Of course, a decision to defer the award would have provoked a furious reaction from trade unions but it would have affected everybody equally and would certainly have been more just, and probably far easier to sell politically, than hitting a range of the most vulnerable groups in society.

Such a decision would also have served to alert the public to the true nature of the crisis.

Instead of pleading inability to pay, the Government pressed ahead with a new national pay agreement which neither the State nor most private sector employers can afford. That deal will add another €700 million to the public pay bill in a full year and virtually nobody now expects that it will be paid.

Whatever happens over the next 12 months, as the political system struggles to come to terms with the new economic reality, plenty of excitement can be expected in the political world. Translating that into policies that will ultimately be good for the country is the task facing politicians of all parties.