Battle over services or pay resumes in public finances cycle

IN this society, where power is bought by politicians promising the unaffordable, principle plays second fiddle to the rolling auction needed to secure and retain power. 

There is, as yet, no suggestion that any party has decided that this unsustainable swizz — at the level of taxes paid to the exchequer today — should be replaced with something that does not look like post-factual economics. And who can blame them? We all play a predictable, unwavering role in this set piece. Any party brave enough to campaign on the basis of balancing the books on day-to-day spending would be banished to oblivion. The fleeting, almost illusory power offered by demand democracy has seduced us to such an extent that our public administration is permanently held to ransom.

Irish Water and the solid argument behind its establishment and funding runs may become another monument to our refusal to accept that, apart from the grace of God, nothing in this life is free. Water services, or at least minimal, patched up water services, will be paid for one way or another but some other pressing need will go unanswered. That either-or principle applies right across all public finances. That a significant number of people regard the disembowelling of Irish Water as a victory for fairness just perpetuates this foolish culture.

The latest round of the stay-in-power auction began when a €50m package was offered to avert a garda strike. It continued in recent days with the recognition that a special pay agreement with nurses may be necessary. Workers in transport and education and others want pay rises. Demands for improved services and, at the same time, tax cuts show that these hopes are not confined to any particular section of society. How these matters are resolved in an equitable but affordable way — if they can be — is, along with Brexit, the greatest challenge facing our less-than-robust Government.

Demands for increased spending grow relentlessly but the resources needed to satisfy those demands are barely available, if at all. This was reflected in the memo to cabinet offered by Expenditure Minister Paschal Donohoe who has warned that “given the limited fiscal space, new proposals will be largely funded from re-prioritisation of existing resources away from lower-priority, less efficient and less effective policy areas.” In other words, cut your cloth to your measure, there’s no more, or at least not much, money in the cookie jar. Ministers face a March 16 deadline to outline spending objectives. Squaring that circle will test the Government’s resolve. Any concessions made, no matter how justified, will fuel demands for pay rises and/or tax cuts in the private and public sectors.

The choreography is as familiar as it is threadbare. Demands will be made. They will be resisted but, eventually, concessions will be made. Funding to support health and education and other services will be cut because taxes can’t be raised or power might be lost. An election will eventually be called and promises of a new tomorrow will fill the air. A new auction will be under way before you can say benchmarking to a duck. Is that self-destructive cycle really unbreakable?



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