Broken promises beginning to stack up
GIVE credit where credit is due — this Government looks just as capable as its predecessors of breaking election promises.
It’s only a few months since Fine Gael made a pre-election promise to increase mortgage interest relief for those in negative equity.
Fine Gael produced a banking strategy during the course of the election campaign. Here is what it stated: “We will increase mortgage interest relief to 30% for first-time buyers in 2004-08 (from the current sliding scale of 20% to 25% depending on the year the mortgage was taken out), financing in part by bringing forward the abolition of relief for new buyers from June 2011.”
But the report of the interdepartmental mortgage arrears working group, published this week, gives the Government the cover it needs not to fulfil the promise.
In its report, the group, tasked with identifying solutions to the mortgage arrears crisis, said: “(We) examined the proposal to increase mortgage interest relief to 30% for first-time buyers in 2004-08 but it was considered that this change should not be recommended.
“The proposal would give increased relief in an indiscriminate manner as it would give benefits to all who took out mortgages in the relevant years, regardless of their economic circumstances. The proposal would cost the exchequer approximately €120m in a full year and it would not be appropriately targeted at those who need the support.”
Quizzed about the issue after the report was published, Finance Minister Michael Noonan suggested no such scheme could be ruled in or out until budget day. But if it fails to materialise on budget day, the Government can simply point to the report of the group and say “expert advice” recommended against it.
It’s not the first time that the Government has broken an election promise. In that same pre-election banking strategy, Fine Gael promised that it would force banks to squeeze their own costs before they squeezed their customers — in order to help variable mortgage holders.
“A Fine Gael government will direct any mortgage provider in receipt of State support to present it with a plan within 100 days of coming into office of how it intends to cut its wage bill and other costs — over and above existing plans — in a fair manner by a sufficient amount to forego a 25 basis-point increase on their variable rate mortgages,” the document stated.
But it never happened.
Pushed about the issue by Sinn Féin’s Pearse Doherty in the Dáil in July, Mr Noonan said: “The restructuring of the banks has not yet been completed. The process is under way… When all of this has been done, the cost base of the banks will have been reduced and they will be in a position to offer a more cost-effective service to all of their customers, including those with mortgages.”
It’s not just in the area of mortgages that promises have been broken. Taoiseach Enda Kenny was badly exposed on Roscommon Hospital, for example. He had promised during the election that A&E services at the hospital would be maintained if Fine Gael were returned to power — only for the Government to then shut the unit.
On the jobs front, meanwhile, Fine Gael promised a new state body called NewEra to pump €18 billion into infrastructure over a four-year period and create more than 100,000 jobs.
NewEra did materialise in recent weeks, but principally as a body to manage the Government’s shareholding in major semi-state companies. The investment and jobs targets appear to have slipped away.
It’s not entirely a story of broken promises, of course. The Government did, as promised, announce a jobs initiative in May, although it was considered underwhelming.
The coalition parties would, no doubt, also argue that some promises simply had to go once they realised the true state of the public finances.
In an overall sense, though, the number of broken promises is starting to stack up. And with about €12bn of cuts to make over the next four years, it’s likely we’re going to see a lot more of them.
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