The issues canvassers will face on the doorsteps
Overnight, the Government had arrived at the momentous decision to guarantee the country’s main banks in a bid to prevent the sector collapsing and causing an economic meltdown.
The main opposition parties had just a few hours to decide whether or not to support the guarantee, as the emergency legislation to give effect to the scheme was coming through the Dáil later that day.
Although it had numerous concerns, Fine Gael decided it was necessary to support the scheme in the country’s interest. The party’s then finance spokesman, Richard Bruton, told the Dáil that Fine Gael was doing so because it was important to “copper-fasten” the financial system.
“We must all understand that a sound financial system is like the oil running through an engine,” he said. “If that oil is drained away by a loss of confidence, then suddenly that engine seizes and the problems that beset people in our country who are facing the dole, who are struggling to meet their payments and who are encountering tough times in business, would get much worse.
“That is why we are supporting this approach. We believe it is timely to move and to deal with what would be a potential run on banks.”
Sinn Féin also decided to support the scheme. Its spokesman Arthur Morgan said: “This legislation is about more than the banks. It is about offering security to ordinary citizens, investors and Irish businesses, which in turn means jobs.”
Labour was the sole Dáil party to oppose the scheme, saying that in the absence of comprehensive information, it simply wasn’t going to buy a “pig in a poke” or sign a “blank cheque” for the banks.
But Finance Minister Brian Lenihan played down suggestions that the state would end up bearing bank losses.
“There is understandable concern that the Exchequer is potentially significantly exposed by this measure. This is not the case,” he said. “The risk of any potential financial exposure from this decision is significantly mitigated by a very substantial buffer made up of the equity and other risk capital in the relevant institutions.”
The Taoiseach was of the same view. “It is my intention to ensure the Irish taxpayer will not be held liable in any way for any deficit that might occur in the event of there being a problem in the future,” Mr Cowen said. “I intend that the sector will have to discharge any liability that may arise.”
When the final vote to pass the bill was taken in the early hours of October 2, 2008, the outcome was a formality. It was passed by 124 to 18 and, though none of those voting could possibly have realised it, the die was cast for a truly devastating economic collapse which in turn sparked staggering political upheaval and set the turbulent backdrop to this election.
It is, of course, simplistic to say that the guarantee scheme and its after-effects — including the decision to bail out a toxic institution like Anglo — were the sole causes of the economic collapse. They weren’t.
It was the collapse in the property sector that blew a hole in the banks in the first place.
ELSEWHERE in the economy, competitiveness had fallen sharply as wages rose throughout the Celtic Tiger era. There is now something of a political consensus that the public sector became too bloated. All of these and other factors conspired to create the perfect economic storm.
Now the principal question in this election is: who do people believe can get us out of this mess? Not the outgoing government, judging by the opinion polls. Fianna Fáil’s economic credibility has been shredded as the republican party ended up needing an EU-IMF bailout to keep the country afloat. Mr Cowen has paid the price, making way as Fianna Fáil leader for Micheál Martin. Mr Cowen will remain on as Taoiseach until the new Dáil elects a successor, but his time is now past. Mr Martin represents Fianna Fáil’s future, but what kind of future that will be is open to question.
It is premature to say Fianna Fáil is finished. A party so deeply imbedded in the history of the state, and with such a large national organisation, will not become extinct. But to have any chance of rebuilding successfully, the Corkman needs to return to the next Dáil with at least 25 TDs. Anything less and Fianna Fáil could be facing a decade or more out of power.
For the Greens, however, this election truly is about survival. While the party argues that going into government gave it a chance to get some of its policies implemented, it has almost certainly come at too much of a cost. The Greens have six TDs and all of them are at risk of losing their seats. They have already seen the bulk of their councillors wiped out in the 2009 local elections.
Advocates say the Green movement will continue as there’s simply too much impetus behind it to do otherwise. But in terms of a strong political party leading from the front, this election could prove a major setback. The Greens face an uphill battle to avoid obliteration on polling day.
So with the outgoing Government having no prospect of being returned, this election marks a decisive shift in the political landscape. It’s no longer Fianna Fáil and Fine Gael vying for supremacy. It’s Fine Gael and Labour, the two main opposition parties, locked in a battle to determine who will lead and therefore control the next government.
FINE GAEL look in pole position and the party has been doing its best to present itself as the government- in-waiting. Labour prospered for a while from the fact that it alone had opposed the bank guarantee, but while it had been politically smart to do so, it was also an opportunistic move that was blessed with a large slice of luck.
Not even Labour could have anticipated or desired things falling apart in the way that they did. That luck has worn off a little in recent months, as the political focus has shifted from past stances to the solutions now on offer. Fine Gael is now in front on that score, selling more effectively than Labour the line about renegotiating the EU-IMF bailout. But Labour at least offers the electorate a convincing leader in Eamon Gilmore. Fine Gael still has work to do to assuage public doubts about Enda Kenny.
Sinn Féin has problems on both leadership and policy fronts. Since winning the Donegal by-election late last year, Pearse Doherty has been a vocal critic of the main political parties, scoring points at their expense. But the problem for Sinn Féin is that Doherty is not leading the party: Gerry Adams is, and Adams, though a huge asset in the North, still looks like a liability in the South.
He is weak on economic issues and tends to makes Sinn Féin’s economic policies sound weak in turn, even when some of them chime with the public mood.
That leaves the independent candidates, who look set to be elected to the Dáil in greater numbers than in 2007. That would hardly be surprising, given the widespread feeling that establishment politics has failed the country. But it seems highly unlikely they will be elected in sufficient numbers to actually dictate the political agenda.
And therein lies the truth of this election. Fianna Fáil losing dozens of seats and facing a long stint in opposition would represent a reordering of the political system, no question. But a revolution? Not so much. At the end of the day it seems likely that power will merely shift from one establishment party to two other establishment parties. At a time when people have never felt less secure, establishment politics still offers the safest refuge.
By Caroline O’Doherty
Bank credit is also a sore point as businesses and self-employed complain repeatedly that they can’t get basic loans and overdrafts to keep them afloat
THE BANKS: WHERE to begin? Anger over the bailout refuses to die, with questions still remaining over whether it was the right thing to do or, indeed, as Fianna Fáil contend, the only thing they could do.
Candidates can expect to be quizzed on the doorsteps as to whether they could/would reverse the decision, default on the international bondholders and follow Sinn Féin’s idea of consigning the worst offender, ie Anglo, to the scrapheap for good.
The cost of the bailout is also contentious with parties and economic commentators divided over the punitive interest rates we’re paying for the IMF/EU loans propping up the banks and the economy in general. Candidates will be under pressure to explain why they can’t/won’t push for a better deal.
Bank credit is also a sore point as businesses and the self-employed complain repeatedly that they can’t get basic loans and overdrafts to keep them afloat, despite one of the justifications for the bailout being the need to keep cash and credit flowing.
Then there are the bonuses for bank workers. The outgoing Government seems perpetually one step behind those sanctioning the payments and appears utterly incapable of putting an end to the practice either by force of law or influence.
Voters will want to know which party will bring the banks to heel, eliminate the bonus culture and put in place a proper regulatory system that guarantees transparency.
Finally, they’ll be asking when we’re likely to see the bankers who broke the law — and the country — doing some hard time behind bars.
JOBS: THIS one affects everyone — workers who’ve lost jobs, graduates looking for their first job, those taking the emigration route and those left weeping in their wake.
Unemployment is now 13.4%, the highest since 1994, and the figures are reduced by emigration, so candidates can expect a grilling on their plans for getting the nation back to work.
It doesn’t help that the ESRI has estimated that another 50,000 people will emigrate this year and 25,000 jobs will be lost, almost wiping out the 27,000 jobs the Government has said will be created by the IDA and Enterprise Ireland.
Voters will be looking for practical measures to protect jobs (see bank credit above) as well as innovative ideas on how to create new ones.
The employment creation plans outlined in the budget tick few boxes. A key measure is a revamp of the Business Expansion Scheme, to be called the Employment and Investment Incentive, that will widen tax reliefs for investment in employment creation in small and medium businesses, but it has yet to be approved by the European Commission.
Reductions in the minimum wage — which come into effect tomorrow — are unlikely to win much support on the doorstep either, with low-wage workers arguing the cut in pay is a disincentive to work and employers arguing the rate is still too high to provide an incentive to employ.
Some 15,000 new “labour market activation” places for unemployed people to gain paid-for training in specific vocational fields were announced in the budget, but voters are unlikely to have seen any of them yet to be able make a judgement on their value, while others will see it as a cynical attempt to doctor the unemployment figures.
TAXATION: PEOPLE in jobs may be the lucky ones, but many of them don’t see it that way after seeing ever-increasing bite marks out of their pay packets.
The reduction in tax credits and lowering of the eligibility thresholds announced in the budget are widely believed to caused disproportionate hardship to low and middle-income earners while going easy on high earners.
That apparent injustice, a hallmark of the Fianna Fáil era, angers those who didn’t “party” in the boom years and will have to be addressed/refuted by candidates on the doorstep.
The decision to defer the abolition of property-based tax reliefs to next year may also be viewed as evidence that speculators and developers still get favourable treatment.
Already there is fury over the Universal Social Charge (USC) — a far heftier replacement for the health and income levies — which is taking huge chunks out of modest incomes. Last week’s decisions to reduce the USC for people on medical cards and introduce a two-tier charging scheme for income up to and over €10,036, are likely to be viewed as only minor modifications that will do little to ease the pain.
The introduction of carbon taxes and increases in excise duty in the budget have hiked up the prices of petrol and home heating fuel, making a further dent in household incomes and frustrating the efforts of small firms to stay in business, but candidates will be hard-pressed to present alternative revenue-raising measures.
Corporation tax is also likely to come up for discussion. Despite constant reassurances from the outgoing government that we can’t be forced to increase the tax, there remains nervousness that pressure from Europe could endanger our chief means of attracting foreign investment.
Health: MENTION of the HSE elicits groans but mention of disbanding it elicits more. Health — an election issue even during the boom years — is very much on the agenda again.
You can take your pick of topics. The patients-on-trolleys scandal has been in the headlines again with cutback-driven ward closures clearly having a knock-on effect on &emergency departments.
Surgery waiting times have improved but there is still a major problem getting a first appointment with a consultant for referral for necessary.
Those problems will worsen as soaring private health insurance prices push thousands to give up their policies and candidates can expect to be quizzed on how they plan to ensure real competition in a market that’s beginning to look very like a cartel.
The co-location debacle means private hospitals planned for public hospital grounds may never be built — the economy suggests the controversial plan is a dead duck and Fine Gael have said they’ll shoot it down one way or the other — so there will be no easing of pressure on public beds.
Mental health services are also a big concern with recent reports raising alarm about the overuse of sedation, restraint and seclusion in psychiatric facilities and little progress on the provision of facilities for children who still end up in adult wards.
Other issues include the closure of local hospitals, the controversy over the location of the new national children’s hospital, cuts in care for people with intellectual disability, scares over the qualifications of personnel acting as home helps for the elderly and the continuing practice of publicly paid consultants carrying on private clinics.
MORTGAGES: THE grimmer commentators keep saying it’s the next big torpedo aimed at our already sinking economy — mass mortgage default and the devastating social and financial implications that would follow.
Home repossessions are still relatively rare, although a dozen or so are granted at the main court dealing with the process in Dublin each week.
But some 70,000 homeowners are in difficulties with their mortgages. Around 12,000 have made no payment for a year or more, 30,000 are in arrears for between three and 12 months and another 30,000 are only paying interest.
Many of the 70,000 are availing of the government-ordered 12-month stay on repossession actions by the main banks but their time will be running soon.
A succession of interest rate hikes is also expected this year which will tip many other homeowners over the edge and into arrears.
Property prices are thought likely to fall for another year or two, and negative equity on homes bought in the last five or six years is likely to remain for a generation, so selling offers no way out for those in arrears.
There’s a shortage of social housing as it stands, so the system won’t cope with an influx of newly repossessed families joining the waiting list; and while there is in theory plenty of private property for rent, many of the owners of those properties are also in arrears and face the threat of repossession.
Meanwhile, people in a position to buy are having trouble getting mortgages, and half-built housing estates and apartment complexes are falling into irrevocable ruin. Candidates who survive questioning on all other issues may find themselves admitting defeat on this one.
THE new Register of Electors will be published tomorrow, February 1, and will come into force on February 15.
To check if you are registered to vote, you should check with your local authority or go to www.checktheregister.ie. Anyone who qualifies to vote, but who is not on the Register, can avail of what’s known as the “Supplement to the Register”.
Applications to be included on this can be made up until 15 days before polling day.
Application forms, known as the RFA 2, are available from the local authority or from www.checktheregister.ie Each application must be signed in the applicant’s local Garda station in the presence of a member of the Garda, who must first be satisfied as to the person’s identity before signing, dating and stamping the form. The Garda may request photographic or other identification. Where the applicant is unable to go to the local Garda station, and sets out the reason in writing, the form can be signed in the presence of an official of their registration authority.
If neither option is viable due to physical illness, etc., the application must be accompanied by a medical cert.
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