Let’s end this 40-year-old tax fantasy of low-tax, high-hope economy

Forty years ago today the country went to the polls and gave Jack Lynch’s Fianna Fáil 84 seats, which represented a 20-seat Dáil majority, a level of autonomy that today’s administration must envy. 

That result, now seen as a corruption of democracy, was achieved by promises to abolish rates on private dwellings and to end road tax for most private motorists.

It is easy to excoriate Lynch for breaking the link between taxation and worthwhile public services but he could not have done that without the gullibility of a seduced, self-serving electorate. We are still paying a price today, if not financially, then in the greatly reduced capacity of governments to stand over the rational principle that if we want a service it has to be paid for. Or, as that idea was so succinctly expressed in Lynch’s time: “No bottles, no milk.”

That is one legacy of Lynch’s auction-jamboree, but even today, 40 years later, Taoiseach Leo Varadkar faces another one. Just like Lynch he faced criticism over his male-dominated cabinet. And, as if to confirm that so very little changes, opinion polls taken in 1977 suggested Fianna Fáil were so popular that the polls were discounted by disbelieving pundits. One newspaper had such doubts about their accuracy that it refused to publish them. What a lesson that would have offered Theresa May had she cared to heed it.

However, the most toxic, most delusional legacy from that election is the destructive idea still alive today that we can have five-star public services but still enjoy the individual indulgences of living in a low-tax economy. The examples of this wishful thinking are stark and all around us — as are the victims of that amoral swindle.

Today’s housing crisis is rooted in the decision to end rates. Local authorities’ incomes were devasted as was their capacity to provide social housing. The dodge meant service charges were imposed on developers, so those in the private property market paid the levy, albeit under a different heading. This week’s observation from the Construction Industry Federation that inadequate water services are delaying badly-needed homes can also be traced to that 1977 free-for-all. Of course, those who protest so passionately against modest water charges would reject the idea that their Alice-in-Wonderland stand exacerbates the housing crisis or that they are as disconnected as those who voted to end rates 40 years ago but the very strong evidence suggests otherwise.

Blame for myriad stories detailing how our health service struggles on so many levels can hardly be laid at Jack Lynch’s door but the mindset he, and others, encouraged is culpable. So too is the dysfunctional regulatory culture failing on so many fronts— the terrible tragedy at London’s Grenfell Tower is the latest example but, in a bizarre acceptance of fatalism, we all know it won’t be the last.

This week a new Taoiseach was elected. Mr Varadkar might make his life easier, and ours better, if he opened a new front to highlight cultural indifference to the cost of our expectations or “rights” and their funding. This would restore sanity — and hard choices — to our pubic discourse and end the dangerous it’s-all-free fantasy begun 40 years ago today.


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