ANCESTRAL VOICES PROPHESYING WAR
Between now and the year’s end, the mettle of the government seems set to be tested.
The main issue will be framing the December budget and finding cuts or increased taxes sufficient to meet the stated target of more than $4 billion in savings for 2013. The “easy bits” have been done. Given that Labour remains ideologically opposed to cuts in the basic levels of welfare payments, how agreement is secured will be interesting.
The Troika has suggested looking at the overarching sacred cow of universal benefits and introducing means testing on some of them, including child benefit and the generous entitlements of the old (free travel, free electricity among others). Last year’s bleating and handwringing by politicians and not so veiled threats from the interest groups involved have been trotted out again and we are still only in August. Have we advanced nothing since last December?
The government has thus far remained tight lipped about the small print on the property tax, likely to be the main new fiscal imposition, beyond announcing that it will be collected by the tax authorities, thus avoiding the fiasco of the 2012 household charge, an issue which continues to rumble on. Could there be a quid pro quo in a budget announcement on this to balance some semantic legerdemain on welfare benefits?
While tackling the economic mess is paramount, and while the priority should be ensuring the public is educated and properly informed about this issue, crucial to our national survival, the government continues to occupy itself with near irrelevancies. The public debate on the abolition of the Senate is slowly gaining momentum. It is hardly a priority, may prove a distraction and will require a constitutional referendum. One is already scheduled on the rights of the child. Frankly these are indulgences we cannot afford at present.
Ditto the recent statement by Eamon Gilmore, deputy Taoiseach, that gay marriage is THE “civil right issue of this generation” (really?). Ditto also ideas floated to hike minimum prices for alcohol to curb teenage drinking, and suggestions to increase incrementally the price of cigarettes (already the highest in Europe) to $1 per cigarette! A smuggler’s manifesto. All are superstructure issues when the priority is the substructure ( BTW, the only Marx I identify with is Groucho, not Karl!).
Meanwhile there is to be a constitutional convention to review the current document . Already identified as issues to be addressed are “priorities” such as removing blasphemy, reducing the term of the President to five years and lowering the voting age from 18 to 17. These will undoubtedly lick the creaking pre -World War Two basic law, with its dated language and syntax, into an instrument fit for 21st Century purpose.
In fairness, there has been some improvement in the official financial situation due to some marginal easing on this year’s promissory note. The government is hoping additionally for some substantive (and substantial) relief – in whatever form – on the bank debt portion of our borrowing burden and is upbeat on something emerging before December. Like every taxpayer I hope they are right. Any relief and its extent is contingent on events in the Eurozone and it would be a brave man who would bet on the outcome there. But even were the cross of the bank debt lifted, the grim spires of over generous welfare benefits and an inadequate tax base would remain to be addressed.
There has also been some progress aimed at ensuring that what happened can never recur. With the caveat that military planners prepare against the last war, this is welcome. Nothing has actually been passed into law but draft legislation on ethics and bankruptcy reform have appeared, hardly ideal but a big improvement on the current situation. The Financial Regulator has full government backing for his tough line and there is a sense that, slowly, the situation is being addressed. The first criminal charges have been issued against former bankers. The Courts have shown signs of a get tough policy on white collar crime and have also taken a vigorous line against individuals attempting to file for bankruptcy in Britain.
However, the small print of company and tax legislation remains to be addressed, including the distinction between a company and the individual (s) controlling it. The issue of taxation, residency and citizenship also needs to be explored in a serious fashion, as well as tackling what is steadily emerging as the elephant in the room – the level of private, chiefly mortgage, debt. This last could prove terminal.
Eighteen months in, the pressures are beginning to mount on the government with the largest majority in the history of the state. It now has firm ownership of the ship of state and can no longer get away with blaming its predecessor. Backbenchers are getting increasingly uneasy as the months pass, the economic situation remains dire and election promises get more hollow by the day. While the economic realities were signalled well in advance of the last election, the public has limited patience and the reality has now dawned on many of those newly elected that they will be in the firing line of public displeasure next time round. The horses are definitely showing signs of fright.
Another issue all could do without, the thorny one of abortion, has re-surfaced out of left field. Abortion generates strong emotions and polarised views at any time and has had a particularly fraught recent political history in Ireland. While there was never any prospect of an Irish legislature legalising abortion, in the 1980s the pro-lifers sought to copper fasten matters with a constitutional referendum. The constitution now accords the foetus a right to life “with due regard to the equal right to life of the mother.” Not surprisingly this resulted in court actions and further referendums, including one in 1992 where almost 40% voted to prevent a pregnant woman from leaving Ireland to secure an abortion elsewhere (in the wake of the infamous X case).
The issue has arisen again now because of the need for the government to comply with a ruling from the European Court of Human Rights to legislate over the human rights of a woman (in the C case) unable to obtain an abortion in Ireland. The war drums are beating already. Given that Fine Gael is pro-life, and Labour pro-choice, this looks interesting.
Meanwhile an invisible mermaid is materialising, with dire potential. The pharmaceutical industry, carefully nurtured over the years, was one of the jewels in the crown of the Celtic Tiger, and one of Ireland’s functioning fig leafs post crash. Its heavy hitters were patented drugs, which generated enormous revenues. Now, however, some of the major patents have begun to expire (e.g. Lipitor) with more to follow. The first half of 2012 has seen a sharp drop of 30% in pharmaceutical exports to the USA ; when the patents expire in Europe further falls are anticipated. Long flagged, now that the moment has arrived the reality is disturbing. Unless there are fresh patents, the prospects for the pharmaceutical sector look uncertain. This is a bell weather issue ( involving exports worth billions) which the government cannot afford to ignore.