It’s OK, you can come out now. It’s all over.
Nobody died, but large swathes of the population have certainly got it between the eyes.
Yesterday’s budget was flagged as a howler and it lived up to all expectations. The catalogue of pain is long and varied. Practically everybody in the State has had their pockets lightened, but the real issue that was only beginning to crystallise last night was which constituency is worst hit.
True to the form of the last five years, the rhetoric about “protecting the most vulnerable” was showed to be hollow. Cuts to child benefit, back to school allowance, telephone and electricity allowances for pensioners, prescription charges — all are going to hit hardest at those with the least.
Further up the socio-economic ladder, student fees, PRSI allowances, the price of drink, and the cost of driving will lighten all pockets. Fianna Fáil estimates the hit will amount to an average of €1,100 per annum for the average family. And then there’s the big one: Property tax, a measure that will not just hurt in monetary terms, but hits at something primal in the Irish psyche.
It might well be said by those in power at the moment that pain is necessary, misery optional, but once again those in power have forfeited the moral authority to purport to lead from the front.
The least that might have been expected from yesterday’s budget was an acknowledgement from Leinster House that they are capable of feeling the nation’s pain. The feathered bed that politicians enjoy has lost some padding since austerity kicked in five years ago. They have taken pay cuts, yet out there among the masses a justified perception persists that they live in a cocoon, largely safe-guarded from all that is ailing the general populace.
At such a time, a grand gesture was required. The salary and expenses they enjoy could easily absorb such a gesture, and it would at least have gone some way to effecting solidarity with those over whom they govern.
That none was forthcoming was one of the biggest disappointments of the day. Brendan Howlin and Michael Noonan stood and addressed the nation with platitudes and soft words, yet when it came to the crunch, they failed miserably to lead from the front.
“Payments that members of these houses receive is rightly under scrutiny,” said Howlin, building up to an expected gesture. And then he went and spoiled it all by saying something stupid about allowances and vouched expenses.
There was no big gesture, nothing about slashing ministerial salaries that are among the highest in the world; nothing about cutting basic pay of members of parliament, who also enjoy comparatively high salaries; nothing to at least give notice that the denizens of Leinster House are in tune with what is going on in homes across the State.
One detail of Howlin’s brief reference to cutbacks on politicians’ income said it all. He is cutting the allowance on envelopes by 50%. In a speech that was short on the detail of cuts to those with the least, he wanted to tell the nation that at least politicians would be sending out fewer Christmas cards on the public purse.
Meanwhile, in the real world, the impact of the two headline measures will take some time to feed through. A cut to child benefit was inevitable. The payment accounts for €2bn and is paid on a universal basis. Successive governments have demonstrated a complete lack of political will to reform the system so that those who need it most get the most, and those who can manage without it do so.
There had been noises that a €40-a-month cut was on the cards, along with a provision to claw back the lost amount for families in need. This, at least, would be a move in the direction of spreading out the pain with a modicum of fairness.
In the end, that system never materialised. Once again, politics trumped social justice. Everybody takes the same hit, although a small extra provision to help families in need was also made.
The property tax is likely to be a slow burner. Politically, the Government has decided to go gently into that good night, introducing it on a half-year basis next year, presumably to test the waters and dilute resistance. The rate of 0.18% on houses valued at less than €1m is not as bad as it could have been. (It’s 0.25% for “mansions” valued over €1m.)
The bands are set in €50,000 brackets. For instance, a house valued between €200,000 and €250,000 will be taxed at a rate of 0.18% of the midpoint of the bracket, €225,000.
How will the self-assessment work? The smart money can see residents’ associations convening to determine an agreed value on properties in their road or estate, to ensure that, well, everybody gets their story straight for the Revenue Commissioners.
Such arrangements will be liable to come apart only when the market intervenes, and a house in the area actually sells. That’s not something most people will have to worry about in the moribund market that prevails.
Self-assessment works well for income tax, but whether it will ensure the smooth and accurate collection of a property tax remains to be seen.
As for the theatre of budget day itself, the fare was fair to middling. Inside the chamber the only notable incident was a highly unusual interruption to Michael Noonan’s speech by Fianna Fáil’s Michael McGrath. Apologising for the interruption 10 minutes into the minister’s speech, he noted that the details hadn’t yet been distributed to members. “It’s unprecedented,” he said. “A disgrace.”
Out at the gates of Leinster House, a small protest grew towards an estimated 500 or so, culminating with scuffles breaking out between a small element and the gardaí. Notably, the size of the protest was but a fraction of the gathering the previous night on the issue of abortion.
A clutch of large green Sinn Féin flags, and large red flags of the Unite trade union provided colour, and a succession of opposition TDs stoked the anger. The scuffles appeared to originate with the Republican group Éirígí.
Yet the relatively small size of the protest alone served notice of the unique, if unsettling, passivity that has characterised Irish attitudes to the age of austerity.
On the far side of Government Buildings, a steel cordon was erected around Merrion St, attended by enough gardaí to fill the Dáil chamber. Did they really believe the severity of what was unfolding inside was about to unleash a protest of unprecedented scale? It soon became apparent that the cordon was not to protect the seat of parliament but to keep an eye on Hillary Clinton, who was occupying the Merrion Hotel during a flying visit to the country.
Back in the chamber, the best line of the day went to Noonan. “The Irish financial crisis,” he said, “can be summarised in one word — debt.”
Really? One word ain’t enough. You could substitute debt for greed, or even stupidity.
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