Around the country members are meeting the two men who want the privilege of being Taoiseach, writes Gerard Howlin.
THIS leadership contest is working well for Fine Gael, so far.
As a political party it is getting more concerted attention than any time since the heave against Enda in 2010. There is a better buzz in the ranks than during the ill-fated general election campaign of last year. The move generally among political parties towards an electoral college, or membership-based elections for the leadership, is a sign of the times. The era when the massed ranks will wait respectfully outside a closed conclave and wait for white smoke is over. It’s part of political adjustment to wider cultural change. Unless you meaningfully involve people, it’s harder to get them to come with you. They want their say.
Regardless of the outcome, Simon Coveney’s decision to stay in and fight on has done Fine Gael a favour. It’s not just that it underscores the importance of its first leadership contest for 15 years, it is its last best chance to set a new direction, and convey energy and purpose before an election, even if that election is not immediate. How that purpose is played out by the new leader as he encounters the actualité of events remains to be seen. But, in politics, being in possession of the storyboard is essential for success. Hence Fine Gael’s failure last year.
A crucial part of the story is that both candidates are putting out their policy documents. These are not party manifestos. They are not part of the programme for government.
They are not encompassed by the confidence and supply arrangement with Fianna Fáil. They are aspirational, edited highlights of the kind of leaders they want to be, rather than the detail of the policies they commit to. It’s primarily about conveying a sense of who they are. They are doubly circumscribed by the reality of a government dependent on independents within, and Fianna Fáil without. That is not to mention the unknown but imperative timeline of how long the Government has left. Then there is the base issue of resources. It seems there is about €200m to spend next year, which all going well would likely be the last full year in the life of the Government. There is little reason to think it will go that well.
There was one standout for me in both documents. They promise much more with relatively much less compared to what is envisioned. Doing more with less was the great slogan of austerity. It was the basis for sound policies such as the Fempi legislation that cut public service pay, some professional fees and more. It was a basis for retrenchment in the face of the coincidence of catastrophe debt and fiscal crises. Simon and Leo, however, are not about retrenchment — they are for expansion. Housing, infrastructure and social investment are just some big ticket but uncosted aspirations. So are tax cuts.
Simon says: “I am committed to further reductions in the burden of taxation, both to protect Ireland’s competitiveness and to reduce the pressure on hard-pressed individuals…”
Slightly more specifically he promises “that tax bands must be raised over time so that less people pay the higher rate of tax”. So far, so good.
Leo promises to “reduce our high marginal rates of income tax to bring us into line with our competitors”, declaring that “nobody should pay more than 50% in income tax and social insurance on any euro they earn”. He also promises “as budgetary circumstances allow” to reduce Dirt and capital gains tax (CGT). In one sense it’s harmless aspiration. In another it’s poisonous. It’s the story they are telling that counts.
The story is essentially untrue. As a country we cannot do much more with relatively much less compared to what is envisioned.
More requires more. End of.
Reading through the two documents, there is not much to dislike. To cope with demand and underpin competitiveness we need major investment in infrastructure. To ensure we have a society where rural areas and inner cities alike feel they are part of the national narrative there needs to be a vision for opportunity delivered from platforms as diverse as better education, rural broadband and more social housing.
I get it. I believe in it. I know too that putting people into the top rate of tax at €33,000 is a killer. And it’s anti-competitive. But most of all I know that everything has to be paid for. There is a thin line between aspiration and pie-in-sky. The problem with the latter it is delusional.
A key learning from the economic crash, and the one most egregiously disowned, is the need to widen the tax base. For a start we, astonishingly, have no water charge, or hope of one. That’s not something a new Fine Gael leader can change in this government, but it should be embraced as future aspiration. Last Monday’s country-specific economic report from the EU Commission highlighted the mistake of freezing residential property tax until 2019 when it will have to increase significantly to catch up, or become even more inadequate compared to local authority needs. And that’s not even to speak of future aspiration.
Another issue mentioned on Monday, and referenced before in this column, is the astonishing and frequently nonsensical array of goods and services exempt from Vat. The biggest issue — and its fundamental to our storybook as a society, as well as being fiscally imperative — is the free pass given to so many. About 29% of income earners are out of the tax base. That was increased last year by 42,000 who benefited from Budget 2016.
The trend for this year is still being counted. Simon and Leo signed off on that, before they signed up for their policy documents. Worse, there is no serious challenge to a continuous, corrosive hollowing out of the tax base from other political party’s. Some differ with Fine Gael on USC, but then beat them to the free bar when it comes to water charges and property tax.
This contest is about Fine Gael. It’s about how it sees itself and what it believes in. Around the country, members are meeting the two men who want the extraordinary privilege of being Taoiseach. They have set out largely positive, if somewhat different visions. And then there is the personality contest. But a fundamental of the Fine Gael narrative is that they are staunch, decent, upright people. They can always be trusted to do the right thing, regardless of the political cost. But there is the nub. What is the cost? Who is going to pay? Who in Fine Gael will interrogate their candidates about the hard decisions, conspicuously absent from their policy documents, but essential to fund them. And future aspiration aside, Fine Gael was poleaxed in the last election because its figures didn’t match its mantra. It’s time set the story straight and get on with the ready reckoner.
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