Perhaps confused strategy on budget is deliberate

THE WAVE of rumour, leaks and speculation that has marked the lead-in to next week’s budget is reminiscent of the first years of Bill Clinton’s administration in 1993/94.

Clinton, like the Kenny-Gilmore government, had come to power with a decisive mandate in an election which was all about economic issues. Notwithstanding this, the new president took 18 months to finalise and publish a new economic plan.

For all of that time, Clinton’s economic team and economic decision-making appeared to be in disarray. In private it appeared paralysed by indecision; in public it floated and then reeled back a whole series of controversial economic proposals.

Bob Woodward in his book The Agendalater revealed the full extent of the chaos at the heart of the early Clinton presidency. These months of delays, deliberations and leaks drained much of Clinton's political capital and, together with his administration's failed attempt to reform healthcare, led to a disastrous mid-term election for the Democrats in 1994.

The economic decision-making required of the Kenny-Gilmore Government is much narrower. The tracks on which their economic policy and particularly their budgetary policy can run have been set by the previous government’s four-year economic plan and the constraints imposed by the deal with the IMF-EU-ECB. That is not to suggest the current Cabinet’s task is not very difficult. However, the space within which their decision-making must operate is limited, which should make it relatively easier to decide and then to communicate.

This Government has also had the advantage of time. While they dramatically, and at times melodramatically, opposed last December’s budget and even more vehemently opposed the last government’s decision to stay in power until the 2011 Finance Bill was enacted, Fine Gael and Labour should have been able to benefit from the leeway and breathing space this gave them.

The political management of the budget should also have been assisted by the fact that for much of the late summer and early autumn, the political media was distracted by the trials and tribulations of the presidential election.

The Government has had eight months in which, apart from the banking policy announcement made shortly after they came to power, it has not had to make any defining economic decisions.

One would have thought that with such a strong mandate, so much time and under such cover, the new Cabinet would have in early course not only crafted a budget which could spread and minimise the pain as much as possible, but that it would also have framed a co-ordinated communications approach on its budgetary policy. Instead the politics and communications around this budget have, at least to date, been shambolic.

A whole range of new or increased charges or taxes or possible cuts have been floated. Household charges have been announced, albeit at a level lower than many had expected. Proposals that child benefit will be cut by 10 per cent have been bandied about. Suggestions of punitive increases in motor tax also made headline news. Even a proposal that a €50 charge will be imposed for medical cards together with increases in prescription charges has been peddled publicly.

On top of this, reductions in rent allowances, increases in student fees and a septic tank tax have been mooted. If you wanted to devise a way to raise anxiety about austerity to fever pitch, you couldn’t design it better. Cumulatively, it has caused some tensions both between and within the two parties and it has given rise to additional anxiety for all those likely to be affected by the various cuts.

It has also provided the Opposition and the media with ample opportunity to show how the Labour Party, in particular, in supporting such cuts and charges, will be reneging on pre-election promises. Online media is enjoying replaying pre-election clips of Eamon Gilmore strongly supporting the campaign to keep Mullingar barracks open and another where he promises not to cut child benefit.

It seems that in private the two Merrion Street Ministers, Berndan Howlin and Michael Noonan, have worked well together. Their double-headed handling of budgetary policy will be formalised in the two-act play they will perform on Monday and Tuesday respectively. This makes it all the more curious that spending Ministers such as James Reilly, Joan Burton and others have been permitted to terrify backbenchers by talking aloud, on or off the record, about the toughest of options in their spending areas. Reilly’s presentation to a committee of Labour Party backbenchers the week before last had, it appears, been designed to strengthen Coalition cohesion but appears to have had precisely the opposite effect.

When he won his unprecedented majority in 1977, the then taoiseach Jack Lynch, casting an eye over his historically large Fianna Fáil parliamentary party, remarked how one had to tread carefully when carrying a full jug. The fact that the Coalition has already lost three backbenchers even before their first budget suggests a carelessness in parliamentary party management.

There has to be some possibility that a couple more backbenchers will spill out following actual budgetary announcements. It will not affect the Government’s majority much but this backbench wear and tear does serve to undermine inter- and intra-party cohesion for both Gilmore and Kenny.

Maybe this open source budget-making and confused communication about what will or will not appear in the Ministers’ speeches is deliberate and somehow designed to manage expectations in the hope that an anxious electorate will actually be relieved that the cuts and charges are not as tough as expected.

Maybe there is some real genius behind this strategy. If so, then it is beyond most of us.