DEAR ENDA, Joan, Michael and Brendan, I’m writing to you because you’re the four people who together constitute the economic engine room of the government.
And of course I don’t mean any impertinence by not using your ministerial titles. It’s just that I have something on my mind that I need to ask you to think about. And it’s urgent.
In your spring statement, and more or less ever since, you’ve made it clear that you intend to give us back something around €750m in tax reductions in the October budget — more if the finances allow. Over the next few weeks, you’ll be starting the preparations for that budget in earnest, as you start to look at the spending proposals coming in from different government departments.
I know that already you’ve had a lot of criticism from all sorts of commentators. There are two suggestions implicit, and often explicit, in the criticism. The first is that you’re trying to buy popularity. The second is that you’re going mad with the money, threatening the fragile economic recovery by resorting to old-style (Bertie-style?) politics.
I don’t buy either of those. In fact I think the first one is positively banal. It’s a sad fact that despite the recovery, despite growth, despite the fall in unemployment, despite all the appearance of a brighter future, you’re about as unpopular as it’s possible to be.
Far from buying popularity, the range of unpopular decisions you’ve had to make (combined, it has to be admitted, with some pretty sad political faux pas) have cemented your unpopularity to the point where you’d nearly have to be in a position to abolish income tax altogether to recover.
The unemployment thing, I have to say, has quite surprised me. In the month you took office, the seasonally adjusted unemployment rate was 14.3%, and rising inexorably. It peaked soon enough thereafter at more than 15%. Now it’s under 10% — 9.7% to be exact. That means the seasonally adjusted rate has dropped by half since you came into office.
I have to say I thought that in March (the fourth anniversary of your formation) there would be a big emotional shift in politics when the jobless figure finally dipped below 10%. In any other country or at any other time that would be seen as quite a psychological breakthrough. But so sour is the mood of the people that nobody really seemed to notice or care.
That was the moment, I think, when I realised that you simply cannot get re-elected on the basis of popularity. It’s simply too late for you to be loved.
There are, however, two other bases on which you might still get re-elected. The first is that everyone becomes terrified of the alternative. That’s something that is going to have to take its own course. The most recent opinion poll, which shows that the vote for independents is continuing to rise, is surely a demonstration that the people are (for the time being anyway) not too concerned about the possibility of instability after the election. So that may remove another card you probably want to play.
So there’s only one thing left. You have to make a play for the respect of the people. They may not love you, but people always respond positively to a government that they are convinced is doing the right thing.
So I’m proposing that you change direction. Specifically, I’m suggesting that you look again at the amount you’re proposing to give back in tax breaks.
We all love a tax break, no doubt about that. But we also have a nagging feeling that first of all, tax breaks are transitory — the feel-good factor doesn’t last too long. And secondly, we all know in our heart of hearts that there are things that need to be fixed around here.
Here’s the thing. A tax break never changed anyone’s life for the better in a long-term way. But there are things you can do that will bring about definite and lasting change. You can do them on one basis — by telling us that you have decided to invest in people in a real way instead.
So cut the amount you’re proposing to give back in tax breaks in half at least. Concentrate that on a cut in the USC at lower levels of income, because that will have the strongest economic and social effect. And while you’re at it — and I know this won’t be popular — keep the money you’re proposing to spend on a tiny increase in child benefit.
Those two decisions would give you around €500m to invest right now in essential services. That’s on top of money you already intend to invest in areas like health — and it would enable you to really change lives.
For example, the lives of hundreds of frail elderly people who live in residential facilities operated by the State or funded by the State. You know about the Hiqa reports into some of these facilities, which have exposed the terrible indignities and in some cases suffering that many of these elderly people endure — our parents and grandparents. These problems can’t be fixed without some modest investment in better facilities, accompanied by a radical restructuring of responsibility and management.
For example, the 1,000 children living in temporary accommodation throughout the State. That’s a real blight on all of us — and it’s creating a predictable life trajectory for many of those children.
While I’m at it, the hundreds of children living in danger of abuse and neglect, for want of necessary social work staffing and family support. Unless you want to create another Ryan Report in a few years’ time, you’re going to have to adequately fund the Child and Family Agency you set up around 18 months ago.
I’ve written before here about a profound change you can make easily — to make primary education entirely free. It would be a significant boon to thousands of families (far more than you could do with a tax break), but more important even than that, it would finally honour the constitutional right of every child. And it would be a major investment in all our futures — for tiny money.
THESE are only some examples of the things you could do, if you weren’t so committed to giving us all a tax break. And the things I’ve mentioned above would only use about half of the extra money you could generate.
Tax breaks come and go. We get it, we spend it, and life goes on. As squeezed as we all are, I know very few people, I have to say, who would begrudge the tenner a week extra if they thought it was going to be used instead to make real and lasting changes for the better.
I’m convinced that people understand the need to use the little bit of new prosperity to change conditions now. The right thing to do in the budget is to rebuild the services that make a real difference to struggling people’s lives.
If that means we all have to wait a bit longer for the extra few bob in our pocket, we’ll live with that. In fact, we’ll respect it.
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