ENDA’S GOVERNMENT 1606 LXXXIX

ENDA’S GOVERNMENT

Enda Kenny is assured of his place in history. Despite a disastrous election, which saw his party slump to 25% of the popular vote and win less than one third of the seats, he has become the first Fine Gael Taoiseach to secure re-election. He was elected Taoiseach with just over a third of the House supporting him (59 to 49) courtesy of an abstention agreement with Fianna Fail. Should his government, a fragile minority coalition including several independents, last a year Enda Kenny will become Fine Gael’s longest serving Taoiseach.

The agreement and the accompanying legislative parameters have been hailed as a signal victory for Fianna Fail and its leader Micheal Martin, since theoretically the plug on the Kenny government could be pulled at any time . However, without good cause this could backfire. There is, after all, a country to be governed and not wrecked. How long the new government will actually survive remains to be seen – the bookies and the early opinion polls favour one or two years. But with little appetite for a fresh election right now, in or out of the Dail, and barring a major banana skin like Irish Water or some unexpected economic upheaval, it could last until the end of the three –budget gentleman’s agreement with Fianna Fail.

The negotiations between the two main parties were hard and heavy, with most of the time and effort over what to do about Irish Water. This was hardly surprising. Without a solution, any future minority or coalition government would be hamstrung on the issue – toxic to legislators and a significant proportion of the electorate. Yet positions were entrenched, chiefly over the principle of consumers paying something, with a wide gap between what was regarded as reasonable. One commentator quipped that the Fianna Fail position appeared to be that only someone who had an elephant to wash daily in the back garden would be liable to pay.

The eventual fudge – to kick the can down the road by setting up an expert commission to ponder all aspects of water in Ireland and report back in about nine months to another committee, this time in the Dail, and then the Dail to vote after solemn deliberation – could have been sorted months ago instead of becoming a self-inflicted wound for the last government. Indeed the solution begs the question of why this detailed examination of what has been billed as the second greatest infrastructural project in Ireland’s history was not carried out in the first place.

While the disaster quango is effectively dead and buried with a stake through its heart, legacy and related issues remain. There is the ticklish issue of how to reward the 60% sheep who paid some or all of their water bills and also deal effectively with the 40% goats who didn’t ( one new government Minister has belatedly paid up). Watch the politicians tie themselves in knots over this one. There’s also the “me too” chorus being heard from the 120,000 rural dwellers who have paid for water for decades through local water schemes. There are the implications for the existing organisation and staff of any root and branch overhaul. And finally what everyone accepts to be the case – the need for major infrastructural investment to bring Ireland’s nineteenth century water supply system into the twenty first century and how the several billions required are to be raised in the absence of charging consumers.

Which brings us neatly to the issue of the new Programme for Government and how its aspirations and hostages to fortune are to be financed. It’s a weighty document – 156 pages, 16 chapters and an executive summary – but is conspicuously lacking in how its lengthy wish list could be financed. The document was drawn up having regard in the first instance to the prior Fine Gael /Fianna Fail agreement and then after negotiations with and attempts to bring on board various groups of independents, only some of whom seem to have bitten. The result is academically interesting as a lengthy check list of first world issues which we would all like to see addressed on the assumption of virtually unlimited resources and an ability to “freeze” certain issues while action is taken on others.

There are vague commitments to soak the high earners (who else?) – in order to “ensure the tax system remains fair and progressive” – an aim somewhat undermined by “not indexing personal tax credits and bands”. It promises further crackdowns and sanctions on cigarette smuggling and fuel laundering, and a commitment to improve “tax compliance.” There are also measures, parcelled up as altruistic “key public health interventions,” to increase duty on alcohol and cigarettes ( we are to be “tobacco free” by 2025, surely a fiscal oxymoron) and to tax “sugar sweetened drinks.”

All this is hardly the stuff to bring in the extra €6.75 billion promised for public services by 2021, let alone suffice to phase out the detested USC. And this is before investment in water and the many small print undertakings in the programme are factored in. Some hope is attached to an extra €4 billion available for capital investment apparently following a “redefinition” by the European Commission of Ireland’s “structural balance” which may help on the investment side. With fiscal limits now set by Brussels, it’s going to take particularly favourable economic developments over the coming years to generate the fiscal space just to tread water.

There’s a reality here that requires addressing. While health, housing, homelessness, crime and the curate’s egg nature of the extent of economic recovery were the main issues in the election, Irish Water was indicative, indirectly, of what is becoming a chronic issue in politics here – the unwillingness of the public to pay for the services they demand. The Left (5.5% of the vote) and Sinn Fein (13.8%) have cleverly stoked resentment about austerity while demanding more and better welfare payments and services to be financed from some limitless pot of gold accessed by punitive income and wealth taxes on those defined as wealthy as well as hiking corporation taxes. While this is manifestly unrealistic, the Programme has bought into some of this at least in its wish list.

Quite how the first Hundred Days of the government – in which much has been promised – will pan out is unclear and it’s as well to remember how the original Hundred Days ended. The housing and homeless morass will require years to sort out and a banana skin may be in the offing here as the number of house repossessions seems set to rise dramatically. Ditto the structural problems in the health service.

Overall, given budgetary constraints the scope for any initiative is limited and the government would seem fated for however long it lasts to continue the general approach of its predecessor, with effectively the independents who have bought in replacing Labour. Its duration will depend on its ability to negotiate some minor matters to keep the Dail happy and on having enough political nous and antennae to avoid calamities like Irish Water. Yet Enda Kenny remains as Taoiseach and may well prove as difficult to dislodge as Haughey. Remarkable.

17/05

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