Short-term gombeen politics could cost opposition the next election

THE Dáil this week has a pre-budget debate. Eamon Gilmore and Enda Kenny need to watch out for the offside rule. In soccer, no forward can be in front of the last defender other than the goalie, while ahead of the ball. The best defences move up the pitch and suddenly players are ruled offside. The Government’s political defenders are perceptibly shifting ground.

After two years of paralysis and indecision, they now realise time is running out. The opposition is running the risk of being stranded.

Fine Gael’s outright opposition to any changes in child benefit is inexplicable. This payment has trebled over the past decade — €166 per child per month is paid irrespective of means or income. It is a universal entitlement, regardless of need. Umpteen reports have proposed that it be reduced, means-tested or taxed.

The children of Pádraig Harrington, Westlife and Michael O’Leary can be paid this in equal measure to families where there is child poverty. It costs €2.5 billion annually, which is equivalent to 12% of the social welfare budget. It is paid regardless of whether children reside here or not. If FG believe the middle class backlash to child benefit reform is unmanageable, how would they enforce public expenditure cuts of more than €10bn?

The politics of opposition are soul destroying. For career politicians who aspire to ministerial office, life is lived in a cul-de-sac. Perennial backbenchers thrive in opposition. They can ride every protest at local level without any responsibility. They avoid the flak of government backbenchers having to defend unpopular government decisions.

Opposition spokesmen or shadow ministers can’t make any decisions or implement policy. Their work is rhetorical and their role adversarial. Their routine ritual is ultimately fruitless. They observe individuals of sometimes less calibre discharging important functions.

This has been the lot of politicians like Richard Bruton, Pat Rabbitte, Ruairí Quinn and Phil Hogan for the past 12 years. Leaving aside the lack of personal fulfilment, they endure the appointment of a coterie of government party supporters to state boards and various other political appointments.

In these circumstances, there is no case for a national government. Their exclusion from office is total. Irish politics operates on the basis of ‘winner takes all’. Given that any politician has only at most 20 years at the top of his or her profession, the sands of time are running out. Younger, fresher warriors can take a more mid-term view.

From 1969 to 2002 every outgoing government failed to be re-elected. A pattern emerged of alternate administrations. This provided a career ladder of political opportunities for all. Bertie Ahern’s three consecutive general election victories have precluded many FG and Labour frontbenchers from ministerial office. There is no altruistic case to be made for a benign opposition perspective.

However, if the public mood shifts from blame and anger towards confronting and resolving the nation’s problems, the opposition could be outmanoeuvred. Short-term populist policies could be perceived as naive and lacking credibility. This can only undermine the perception of economic managerial competence.

The publication last week of the pre-budget tables provides the starkest commentary yet on the decline of our economy. The rushed budget of October 2008 meant no similar outlook statement was set out last year. In 2007, the pre-budget arithmetic predicted tax revenues of more than €56bn on a no policy change basis.

The same projection now for 2010 is €30.8bn. Despite the last two budgets (last October and April) containing measures to raise taxes by €6bn, total tax revenues actually fell by €9bn. All of these computations point to the same blunt message: tax returns have fallen off a cliff. The economy is unbelievable fragile.

A plethora of books have recently been published which chronicle the turnaround from boom to bust. Take your pick between David McWilliams, Fintan O’Toole, Pat Leahy, Dan O’Brien, Shane Ross, Matt Cooper, Marc Coleman and Jim Power. Each story may highlight a different emphasis, but the narrative is the same. With increasing alacrity, politics turns to history. This confirms that FF squandered the boom. The litany of government mismanagement is laid bare: light touch regulation, misplaced trust in bankers like Seán Fitzpatrick and Michael Fingleton, cosy alliances with developers or systematic appeasement of the social partners.

This Ahern legacy has resulted in annihilation for FF and the Greens in the local and European elections. Voters will pass their verdict on the three terms of FF government in the next general election.

FG and Labour must realise that excessive opportunism now will not advance their electoral prospects. They need to show the utmost caution not to provide political hostages to fortune. If and when they are elected to government, their present posturing will be quoted back to them, as evidence of hypocrisy and inconsistency. The retrenchment in public expenditure over the next three years will be brutal, whoever is in power. Given that 71 cent in every euro of expenditure comprises public sector pay and social welfare payments, the axe will fall on these emotive areas. Opposition promises to do otherwise are unsustainable. It is short-term gombeen politics.

Labour advocates the double Christmas bonus should be paid. They rule out pay cuts in the basic salaries of public servants and advocate a new third top rate of tax for those earning more than €100,000.

Currently the top 4% of income taxpayers contribute 48% of total income tax revenue. The abolition of various tax reliefs, while merited, may only yield approximately €300m in extra revenue.

There is a considerable shortfall of transparent remedies to fix the public finances. The scrutiny of opposition parties will always be less than government. Labour’s alternatives lack real substance.

IN THE the last general election campaign, FG and Labour were winning at the mid-point. There was a mood and desire for change. When FF put all their fire power into analysis of their programme for government, it all started to unravel. For their own sakes they must avoid a repeat performance. There isn’t a requirement for a Tallaght Strategy II as the Government has a viable Dáil majority. If this evaporates there will be an election.

The opposition needs to be alert to the prevailing mood change within the cabinet. Finance Minister Brian Lenihan and his department are internally in the ascendant. Cowen’s case for consensus is a busted flush. Their poll ratings are so bad they have little further to lose.

This same mood shift occurred in 1989 when Haughey and MacSharry made a virtue out of fiscal necessity. Middle-class voters had moved to the PDs to demand sustainable public finances. History is now repeating itself. Voters, while inherently motivated by self-interest, are numerate. They understand we cannot continue with budget deficits of €25bn per year. While fearing tougher times for their families, they are braced for the painful realities. They know there is no escape. Opposition politicians, full of false promises, will ultimately be rejected as Greeks bearing gifts. It’s OK to be coy and somewhat evasive. Outright commitments on pay, child benefit and welfare retention can only undermine their authority and ultimately reduce their electability.