GERARD HOWLIN: A return to the noughties, when enough was never enough

Motorways are ramparts from which surrounding pastures can be pillaged for votes writes Gerard Howlin

IT’S OF antique interest only but I recall the launch of the first National Development Plan on November 15, 1999.

It was a £40bn plan, and no that punt sign is not a typo. That’s the money we had then, and we never had so much of it.

The Good Friday Agreement was work in progress. An economy in forward mode was really starting to roar. Visiting delegations arrived to study how the depressing mess that had been Ireland could do peace and prosperity simultaneously and successfully. It was a joy to be alive — but it was not to last, or at least not forever.

I mention this because Leo Varadkar will lead his government to Sligo on Friday to launch another such plan. It’s called Project Ireland 2040 and costs €100bn. The politicking is intense and the consequences will be commensurate. The fact is that the spurt of investment under the last plan partially addressed massive inherited infrastructure deficits.

Although largely completed, it was not continued. We have had a lost decade since. A larger population, an older one, and people going back to work mean we are creaking at the seams again. The sense that nothing has changed is an illusion. It’s just that we have outgrown the upgrade again.

No government has had to lead Ireland in prosperity for a decade. If austerity abated in recent years, we are now in a “post-recovery” phase, to quote Ibec. We simply had too much economic action by too many people trying to squeeze into too little social, administrative, and physical infrastructure. As a society, we are walking in shoes that are a size too small.

A return to the noughties, when enough was never enough

There is a social cost. That’s obvious. The economic cost is a debilitating loss of competitiveness and opportunity. In the past, factories followed natural resources and access to the road and the port were essential.

That’s still important, but things have moved on. In the 21st century companies are footloose and intangible. Their intellectual property and their people are what count. Even large investments have all the permanency of a hot desk. And that’s part of our problem.

If there is a pressing need now, and a clear social and economic cost to not investing, there is also a massive financial cost to pay for our upgrade. Our indigenous business sector is anaemic. Small, dispersed, and a long-term play, it has never had the sustained attention it needs. Half of new companies fail within five years.

The sweat and disappointment contrast with the sexiness of multinationals who arrive in town all dressed up and ready to play. It’s been a successful one-way bet, to date. Yes, we have a few big indigenous companies, but only a few.

Greencore and CRH have antecedents in the State sector. The big food companies are formally co-ops. Smurfit, Ryanair, and Stripe are both native-born and born free. At that scale, the list shortens rapidly.

About 1,000 companies deliver 80% of corporate tax. The top ten pay 37% and total receipts have doubled in three years. I am not saying it’s a bubble. But it is mobile and what goes up, can come down.

We must invest to stay in the game. Soaring rents, scarce housing, third level that is under pressure and too often stopping short of excellence is not a winning formula. Big infrastructure, or “public goods” as Paschal Donohoe calls it, besides being essential, is the best investment bet.

The problem is political pressure is folding those corporation tax receipts into the spending ceiling, and some of it is being frittered away on current spending. That’s not smart. It’s the 2008 recipe for sudden swingeing cuts in a downturn.

The other political pressure, or how it has been resisted, will be seen on Friday. Our multi-seat constituency system demands one for everyone in the audience. Developing an economy successfully requires that cities must be drivers.

That is both common sense and politically toxic. What will win investment, and attract in-scale the talent sought are livable cities with housing, public transport, and a lifestyle that suits.

If companies are mobile, the people they seek are more so. DCU’s professor of economics, Edgar Morgenroth, knows in-part what is planned because he has worked on it. He says we must “put the infrastructure into the cities, not between them”.

A new motorway between Cork and Limerick would dissipate resources, in his opinion. We know too well how it could become a driveway for new housing estates in places where providing essential services is most expensive.

The implications are damning of our planning system and, regrettably, partially justified. In a sense, the less that is in this plan, the better it is. A long list of hubs and spokes means we are back to the noughties.

The lesson of that politically, of course, is that enough is never enough. Those who fed the tiger ended up in its belly. Leading in prosperity means knowing not to try and outrun the beast. Once you crouch and turn, you become its prey.

What is certain is that by Friday afternoon, regardless of what’s in the plan, there will be a hue and cry about what is not in it, and most especially where the projects are going. Fine Gael lost the election decisively outside the M50. Maybe by tea time, Charlie McCreevy and Bertie Ahern will feel that in Leo Varadkar and Paschal Donohoe, they have finally found the true flattery that is imitation.

A return to the noughties, when enough was never enough

PERHAPS not. But this is the real electoral battlefield. Motorways are ramparts from which surrounding pastures can be pillaged for votes. Read the plan, and read across to key issues like broadband and the future of smaller hospitals and you have the nexus of the next election in the key constituencies where seats might change hands.

This is important stuff. And, as an aside, it will also decide if we have a competitive economy in 2040.

Given the largesse of corporate Ireland and the passion of the left to spend other people’s money, some among them might consider offering clubhouse membership to large multinationals. Big government needs big companies. One third of wages come from multinationals, and proportionately more of the higher paid.

The enormous spending plans to be outlined have the patina of a socialist project. In reality, they are, if chosen correctly, the necessary investments to fund our continuance as a bastion of capitalism.

All the while we have to live the only life we are ever going to have. There is a deeper meaning to affordable housing and childcare or efficient public transport. I don’t know when we will be asked to decide electorally.

But on Friday we will know essentially what Leo Varadkar proposes for our future — and tellingly the criteria he has used to arrive at it.


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