Stephen Collins: The sombre tone of the banking inquiry may foster realism

Personal jibes at Bertie Ahern distract from the key problem that public spending raced out of control during his time, encouraged by voters, his own TDs and the Opposition

Before the banking inquiry ...  Former taoiseach Bertie Ahern “accounted for his stewardship   with some aplomb.” Photograph: Nick Bradshaw

Before the banking inquiry ... Former taoiseach Bertie Ahern “accounted for his stewardship with some aplomb.” Photograph: Nick Bradshaw

 

The banking inquiry has not produced the fireworks and public humiliations anticipated by many, but it is all the better for that. If it induces a sense of realism about the choices the country faced at a time of acute crisis it will have performed a useful service.

The fact that the inquiry has taken place against the backdrop of the Greek catastrophe has given some context to the actions of those in power in Ireland before, during and after the crash.

This week it was the turn of Bertie Ahern to account for his stewardship, and he did it with some aplomb. He was right to suggest that as the economic storm abates it will become increasingly clear that a lot of the progress made in the first decade of the 21st century in improving people’s living standards has not been washed away.

Ahern was well able to fend off suggestions by some of his interrogators that wrong policy decisions had been made as a result of some corrupt bargain between Fianna Fáil and the banks and/or developers.

In particular, he rejected Taoiseach Enda Kenny’s accusation of an “axis of collusion” between Fianna Fáil, the banks and builders as a “a nonsense” and “a slur on the political system, which is unfair”.

Such accusations are actually a distraction from the fundamental problem that public spending raced out of control during Ahern’s time in office. That happened in response to demands from voters, his own TDs, the Opposition, the trade unions and much of the media. It was a politically winning formula for more than a decade, but turned into a financial and political disaster when tax revenues started to collapse just after he left office.

Ahern showed some appreciation of what had gone wrong, ruefully pointing out that far from attacking him at the time for spending too much, the Opposition demanded that his Government should spend three times more.

Fair analysis

Billy Timmins

Timmins made his comments in the course of a political attack on rival new party the Social Democrats, in which he asked its leaders to explain how they intended to follow their dream of the Nordic welfare-state model while adopting Syriza-style economics.

One of the surprising things about the launch of the Social Democrats, led by the triumvirate of Róisín Shortall, Catherine Murphy and Stephen Donnelly, was that there was so little comment on the contradictions at the heart of their project. The left-wing TDs declared their support for Nordic social democracy, but two of them said they would not pay their water charges and the third, Donnelly, didn’t seem to know whether he had paid or not, but thought he might pay.

The TDs seemed blissfully unaware of the fact that water charges, generally at a much higher rate than those being charged in this country, are a feature of life in every Nordic country and in every other EU member state for that matter.

Another feature of life in the Nordic states is that people on low incomes pay far more income tax there than people on similar incomes here, while tax rates for middle and higher incomes are roughly the same in Ireland and Scandinavia.

The chairman of the Low Pay Commission and director of the think tank publicpolicy.ie, Donal de Buitléir, pointed out at the Government’s national economic dialogue on Thursday that a single person on average or below average earnings in Denmark paid up to 13 times more in income tax than an Irish person on equivalent wages.

He also said it was important that lobby groups publicly supported sensible government policies, such as water charges or property taxation, and did not remain silent on such issues.

The problem with so much debate in Ireland is that it is dominated by shrill campaigners pursuing narrow agendas rather than by the bodies whose primary concern is the common good.

The debate about water charges is a case in point. The torrent of opposition to the introduction of a system of water management, designed to protect a vital national resource and provide a safe supply to households, has received huge media coverage with little analysis of the long-term benefits for society.

Anti-water-charges bandwagon

The first set of billing figures during the week showed that fewer than half of all households are paying. Whether this can be regarded as the glass half full or half empty depends on the political perspective, but it shows how difficult it is going to be to achieve full compliance.

If half of households continue to refuse payment, the system will ultimately crumble. Left-wing campaigns disrupted the introduction of bin charges in the 1980s and the eventual outcome was that the service was privatised.

Hopefully, the same will not apply with a vital national resource such as water, but proper enforcement through a system of deductions at source, if necessary, is something that will have to be done and be seen to be done if Irish Water is to survive.

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