KNOWN KNOWNS AND UNKNOWN UNKNOWNS 1502 LXXII

KNOWN KNOWNS AND UNKNOWN UNKNOWNS

It’s almost Rumsfeld territory.

The Government, battered after its annus horribilis, is trying to pick itself up and undo the damage in the year and a bit before the election. Few give it much chance. It is eight months since Labour showed in double figures, almost a year since Fine Gael got 30%.

However, the earliest opinion poll of 2015 offered some solace with slight increases in support for both Coalition partners to 24% and 8% respectively. While any recovery has a long way to go, some Fine Gael supporters are grasping at the straw that only six months before the last election their support was similarly languishing but recovered strongly. True; but then they were in opposition, not in government with a record to defend. This applies also – in spades – to Labour, who are under sustained attack from the Left over broken election promises.

Pundits argue that the unpopularity revealed in the polls has been too long in the making and cannot be reversed in the short time available, citing the difficulty of regaining the electorate’s trust once lost. Some see a post-election scenario in which three parties (FG, FF, and SF) would each have broadly similar levels of support, in the mid-twenties, with a further twenty-odd percent going to a Macedonia of independents, new parties and those of the hard left, the balance going to a Labour party rump.

Whether this or some other new political landscape will emerge remains to be seen. A year is a very long time in politics and there are different factors at play. Strategists of both government parties are fairly clear on what must be done – or avoided – to give them a reasonable chance. First there must be an act of faith – that the pendulum will swing back, not fully but just enough. Voter disenchantment can be volatile as well as enduring, particularly if there is no readily available viable alternative on offer. This probably saved the skin of several past Fianna Fail administrations. Still to be resolved is whether and to what extent the two parties will present jointly.

Second, avoid Banana Skins – or, if slipping, minimise the damage asap. The handwringing over Irish Water, the bleating defence of the indefensible over medical cards, cost the Government dearly last year. Cop outs like trying to blame a quango, or an unelected Regulator, or whinging that legislation ties the Minister’s hands, simply will not work where the public is seized of an issue. A government is elected to govern, not deliver excuses. Tough decisions may on occasion be necessary and the electorate tends to understand; wrong decisions, or no decisions, they will not.

Third, take on the opposition on the economy. The budget deficit remains huge, even factoring out interest payments on Ireland’s bailout. Borrowing continues. We are still living way beyond our means to sustain current levels of welfare and to run the state. The opposition have been coy on alternatives, beyond soaking the rich. They should be pushed on specifics.

It is not enough to point proudly to seeing off the Troika. An achievement, certainly, but one that has already been oversold. There is speculation that a new Greek government may, as threatened, reject or seek to renegotiate with the rest of Europe the terms of Greece’s economic bailout. Merely an election promise or a nuclear option? Should the Greeks secure a favourable deal by acting tough, the Government’s Troika boast would be rubbished. While Fianna Fail can be largely discounted on this, since it negotiated the Irish bailout terms, the potential boost to Sinn Fein, the hard left and independents could be considerable at the worst possible time.

Fourth, above all: Be Alert! Known knowns like Irish Water and medical cards have been identified – painfully – and attempts to cope with them put in train. This appears to have worked for the medical card issue. However the anti – water campaign is still very much alive and two significant dates are looming. The first is the early February deadline for registration, which will demonstrate whether the disaffected middle is satisfied with the government’s compromise climb-down. The second is Easter, when the first water bills issue (and shortly after the property tax has been extracted).

The government has been playing up the tax cuts from 1 January, pointing to taxpayers having more money in their pockets. These savings, however, look set to be cancelled out by the water bills, while the estimated 40% who pay no tax will feel the charges even more. The hyped €100 for registering with Irish Water won’t arrive until much later in the year. Watch this space!

There is also what could be waiting in the long grass. After years of cutting and trimming there are several potentials and it behoves the strategists to keep an ear very close to the ground – or at least to the daily radio talk shows. The plight of the homeless flared up before Christmas and there is currently the annual waiting-on-trolley scandal in hospital emergency departments, which seems worse this year. There could be legacy issues regarding past scandals – though these could affect all parties – and it will be interesting to see how the government handles the imminent report on the direct provision regime for asylum seekers. One other unknown is the extent of the rising tide of house repossessions and what effect these will have politically. On this issue the can-kicking appears to have reached a cul de sac. None of these are critical as yet.

There ARE positive factors. One which the pundits, the population and the politicians seem to have woken up simultaneously to is the spin off from the dramatic fall in oil prices. Lower prices for petrol and home heating have provided a welcome cash boost – rivalling that of the budget and with a multiplier effect. How this will play out in terms of a general feel good factor is a big unknown. Some of the benefits could be offset by the downward drift in the exchange rate of the Euro. There could also well be public ire should the lower fuel prices not be reflected in terms of cuts in electricity and gas prices. Irish consumers pay dearly for electricity in particular and a forensic examination of the feather- bedded companies is long overdue. This one is a slow burner (ouch!).

With the most recent economic trends there is some leeway to placate public opinion, by rowing back or reversing some of the austerity measures over the next year. A start has already been signalled with for example overtures on pay to the public sector. There will definitely be at least one giveaway budget and a good chance of a second. The Spring Economic Statement may prove to be more than just words if the polls remain unfavourable.

Nothing will prevent massive seat losses for the Government parties in the next Dail. Yet the strongest card it has may well prove to be the electorate’s reluctance to endorse Sinn Fein or to court the possibility of a government in thrall to a disparate group of independents. Now that WOULD be an Unknown Unknown!

22/01/15

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