UNPICKING THE SPENDTHRIFT YEARS 1301 XLV11

“UNPICKING THE SPENDTHRIFT YEARS”

It’s an open question now how long the Irish government will last. That Ministers want to stay on is very clear. One of the axioms of Irish politics is that one day in government is worth a lifetime in opposition. The current coalition would echo this sentiment. However, after less than two years the cracks are becoming fissures. 2013 may not be make but it could be break.

With all the low fruit lopped off, December’s budget was always going to be difficult, particularly for Labour, the junior partner. The Programme for Government, hastily cobbled together after the election, gave significant incomprehensible economic hostages to fortune. These included the so-called triple lock of no welfare cuts, no cuts in public sector pay and pensions and no increases in income tax.
This at a time when Ireland, unable to borrow money from elsewhere to run the country, was in thrall to the IMF and the European Central Bank for loans to pay wages and welfare benefits. The quid pro quo was an austerity programme designed to reduce the country’s borrowing requirement to an acceptable level (I.e. one that potential future lenders would accept) over a number of years by annual cuts in expenditure and/or hikes in, and new, taxes.

This also in the light of some of the legacies of the Spendthrift Years, which had seen welfare rates and public sector pay levels hiked well above inflation, while income taxes were cut and large numbers exempted totally from paying any income tax. Underpinned by this largesse also was the evolution of a culture of entitlement and a failure to grasp that taxes are necessary to sustain a country and pay for benefits.

The Coalition, since coming into office, has twisted and turned, impaled uncomfortably on its self-constructed petard, and meanwhile borrowing about $1.5 billion each month just to keep going.

Something had to give, and in December’s Budget it did. On the positive side, though not welcomed by those who will have to pay it, a tough property tax was introduced, with, crucially, very few exemptions. Those who cannot pay will have the amounts owing tacked on as a future charge on their estate. Whether this drastic approach will ever be carried through, or survive some type of legal challenge, remains to be seen. But the proposal undercut the various lobby groups queuing up to demand exemptions. The introduction of the tax, by broadening the tax base, will dismantle the last of lunacies with which Fianna Fail bought the election in 1977.

On the welfare side the triple lock was finally broken with cuts, inter alia, in child benefit and the removal of a social insurance (PRSI) part exemption; this last is likely to produce howls of anger when people examine their pay packets in the New Year. The howls up to now have come over the cuts in child benefit and a separate 20% cut in the respite grant for carers, bringing it below $2000 annually. The carers’ cut saw wheelchair protests outside the Dail and a protest vote against by the Labour Party chairman, Colm Keaveney.

The cut in child benefit, including larger cuts for larger families, still leaves the basic rate at €130 (roughly$160) per month, and the benefit remains completely non means-tested or taxed. The benefit is paid equally to the child of a millionaire and to someone living in poverty. As long as this remains the case the benefit is fair game for further attention. Part of the emotional argument in favour of the status quo is that it is the only money the state pays to mothers, including those from the coping (and paying) middle classes. But with the state broke and one third of the benefit borrowed, increasing the country’s debt by the month, some realism is needed. An obvious solution would be to pay the benefit under deduction of tax at the standard rate, with those on the lowest incomes getting a top-up; while satisfying nobody, this at least would ensure that everybody got something and would remove future uncertainty.

As I write, Labour is in internal disarray and is taking a hammering in the polls, accused of breaking election promises. Labour Senators may even vote to delay the cuts. In vain have Labour’s leaders pointed out that the promises made were contingent on Labour forming the government, rather than becoming very much the junior party in the coalition. The notion of hanging together rather than separately appears now very much the glue holding Labour together and continuing in government. As 2013 advances, and as the real pain of the budget measures takes hold, the pressures within and without the party look set to increase.

For Fine Gael also, 2013 will bring problems, and not just those arising from the budget. For a very personal family tragedy in November has thrust the abortion debate into centre stage. When the furore over the budget has died down, the abortion issue is likely to dominate the political agenda during the first part of 2013.

In 1983 a pro-life amendment, acknowledging the right to life of the unborn “ with due regard to the equal right to life of the mother” was introduced into the constitution. Not surprisingly this wording was found to be unsatisfactory and vague and a succession of court cases and a number of further constitutional referendums have followed without altering materially the very limited conditions under which theoretically an abortion could be carried out .

Past debate has centered on what would constitute a sufficient threat to the life of a mother to justify a termination. An attempt in 2002 to strengthen the ban by preventing the risk of suicide being invoked as grounds for an abortion was only defeated by a miniscule 10,500 votes or 0.8% of those voting.

The Irish judiciary have criticised politicians for failing to enact legislation to give effect to Supreme Court rulings and a European Court ruling last summer increased pressure on the government. The matter was approached warily by Fine Gael which was and is known to be divided on the issue ; early action did not seem likely.

However, all this changed with revelations concerning the death of a young Indian dentist, Savita Halappanavar, on 28 October in Galway University Hospital. The case has received worldwide publicity. Mrs Halappanavar was 17 weeks pregnant when she began to miscarry. She is understood to have requested a termination which was refused and the miscarriage lasted three days. She died several days later. Enquiries are on-going, though not the public one demanded by her husband.

A wave of sympathy for the Halappanavars swept the country, with demands for early clarifying legislation. The argument is that, had there been no 1983 amendment, or had legislation been enacted over the last 20 years, clarifying threats to the mother’s health and life, this tragedy could have been avoided. The pro-lifers were put very much on the back foot. However, recent weeks have seen them rally. Voices are now urging “Festina lente.” 2013 promises to see yet another heated and emotional debate and the timing could be crucial. Hopefully there will be closure this time.”

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