FOUR LEGS GOOD, TWO LEGS BETTER 1211 XLV

“FOUR LEGS GOOD, TWO LEGS BETTER”

The last few weeks could turn out to be the watershed for this government. Some events or trends have happened or crystallised lately that taken together have changed the way the public perceives the government. Increasingly the question being asked is how it differs from its predecessor. The words of Sean Lemass, asked to define the difference between Fianna Fail and Fine Gael, are being recalled: “We’re in and they’re out!”

The government has now been in office for over eighteen months, roughly one third of its allotted span, its goodwill has been exhausted and it is being judged on its performance record above and beyond the mess it inherited.

On several issues that performance has been found wanting, most recently over allowances paid in the public sector. These (over 1000) cost almost $2 billion annually, and with considerable fanfare the government had undertaken to trim them after review by roughly $100 million (5%). The counter -argument has been that many of these allowances had been introduced over time for very good reasons in lieu of core pay and had morphed, over time, into part of core pay.

Few could have foreseen that the outcome of the review would be to cut immediately just one (!) allowance, to yield annual savings of $5 million. Some others are to be negotiated. The official line, that the government had decided to bite the bullet rather than risk industrial unrest in the public sector over a mere $100 million has been greeted with public derision. Moreover the issue is widely seen in the context of the continued generous allowances paid to politicians of every hue.

This has been compounded by the media revelation that politicians of all parties continue to employ family members as special assistants of one form or another, some at salaries up to $ 50,000, with at least 15 employed by government TDs and senators. One government politician, who employs his wife, argued that he regarded her as his closest political confidante. And there lies the rub. Why should a politician not employ the person he/she most trusts as his assistant? As a left wing independent, employing her partner, asked should a political novice, or opponent, be favoured over a like-minded confidant? While there is evident public dissatisfaction at this state of affairs, the current crop of politicians seem loath to change matters.

Throw in the feeble handling of the Household Charge and septic tank issues, Ministerial hand wringing over recent increases in energy, utility and mortgage costs, the slow rate of closure of superfluous quangos and the homage accorded to the Croke Park Agreement (negotiated by the last lot and regarded as akin to holy writ) and the impression emerging is that there has been no “new politics” and the only evident change the faces of those at the top.

A recent very public spat between Health Ministers has not helped. Roisin Shorthall, the combative (Labour) junior Minister, resigned office and the party whip after her boss, Minister James Reilly, added no less than 15 extra candidate sites for primary health care centres to the original list of 20 drawn up by Shorthall on the basis of a deprivation index. Two of the extra 15 were located in the Minister’s constituency; others were well down the index. Reilly rejected charges of “stroke politics” and pointed out inter alia that, as Minister, he took the final decision. Shorthall received no support from Labour cabinet ministers. She may well have been on thin ice in any event for her gung ho stance on increasing prices for cigarettes and alcohol on health grounds. She now has the luxury of being able to vote against unpopular measures in the forthcoming Budget.

The reality, of course, is that the perilous state of the economy has virtually eliminated the government’s freedom of movement, and that will remain the position until the annual books are balanced and we live within our means. All election promises are on hold. Any measure of relief from Europe on bank debt will not affect this. Indeed the anxious Irish eyes are now focussing on the worrying forecasts for future international economic growth. The rescue plan of 2010 was predicated on growth figures that now appear unattainable, with every prospect that the fiscal adjustment will have to be larger and last longer than was forecast.

This is simply not the time to dredge up and take a stand on ideological principles. The government is determined to soldier on, hence the jettisoning of Shorthall by her party colleagues. There are likely to be further defections from Labour at least, come December, and probably from Fine Gael on some local, rural issues. Labour cannot afford to jump ship; it has slipped markedly in the polls, with Sinn Fein in particular biting at its heels.

Support for Fine Gael has remained fairly steady, indicating that the middle class support which had stuck with Fianna Fail through every scandal until 2011 remains faithful to its new favourite. This is hardly surprising; after all, currently it has nowhere else to go. Certainly not to the left, which shouts for a raft of extra taxes “on the rich”, uneasily undefined, above and beyond even what is coming. Certainly not back to Fianna Fail, which remains on life support, unable to shake the monkey of decades of scandal, cronyism and economic mismanagement. Some commentators across the political spectrum are already suggesting that, provided not too many noses are put out of joint, Fine Gael could remain the largest party for a long time.

This assessment may prove premature. However stoical the middle class, the immensity of shaping December’s budget is also penetrating. The required economies of around $4.5 billion – to be achieved in a 2:1 ratio of spending cuts and increased taxes – are daunting. Can spending be cut by $3 billion while leaving social welfare payments and public sector pay and pensions unaltered? And even if there are cuts of $6.50 per week in unemployment benefit, child benefit and the old age pension, the combined savings would amount to less than $300 million. Bullying civil servants into a 10% cut in salaries and pensions (the wider public service, police, nurses, teachers, looks too tough a nut to crack this year) would yield a further $200 million. Freezing increments maybe $ 300 million. Still over $2 billion short.

New taxes are promised. A property tax from July next. Could the middle classes, and specifically the urban ones, sustain any more than a levy to yield $400 million given that, in the Irish way, there will be categories exempted? Or income tax hikes to yield $250 million? Cigarettes? Already the highest taxed in Europe, with 90 million smuggled cigarettes seized to date in 2012. Alcohol? Already highly taxed, and with an open border to Northern Ireland. Medical charges? For those who pay, in a country where medical cards (akin to gold dust) are distributed unevenly across the country. A VAT hike? More levies?

The gap remaining is huge. Who’d be a Finance Minister, framing the budget? Who’d be a middle class urban dweller, paying for it? Noses out of joint?”

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