eye on the economy
‘A ratings agency may not be able to factor in the Sean Lemass dictum that all election promises are void after polling day’
THE CHALLENGE AHEAD
The election campaigns were short on details and vision of how we rise to the huge challenges ahead, says Brendan Keenan. Now it’s time for the new Government to tackle the big issues
The commentariat was unhappy about the election campaign, but it is harder to judge how the electorate felt about it. Overall, the media criticism centred on the perception
that, despite the extraordinary depth of the crisis, the election campaigns looked very much like politics as usual. There was little sense of anyone rising to the scale of the challenge, but plenty of old-style promises. In the end, the arguments between Fine Gael and
Labour came down to who would levy the least tax. Tax has been the core electoral issue since 1997, and it is easy to see why many observers think its prominence this time bodes ill for the future. Of course, by threatening less tax, Fine Gael had to have
bigger spending cuts than Labour to make the deficit sums come out right – and even then it was far from cer- tain that the sums had come out right. This despite the fact that Fine Gael’s spending cuts had already been reduced – and the tax revenues increased – during the campaign, as the difficulty of explaining how the savings would be made became clear to the party.
One might say that the end result, however messy, was
much as one would expect from the different complex- ions of the parties. Fine Gael relied most heavily on spending cuts; Fianna Fáil was in the middle; and Labour cut the least. Right, Centre and Left. What could be more logical? Well, first of all, that moved Fianna Fáil away from
what I have called the Ballinasloe model – Berlin spend- ing and Boston taxes. (Actually, the statement is accu- rate about neither Berlin nor Boston, but everyone knows what the metaphor means by now). Lower taxes combined with higher spending got the country into this mess, and Micheál Martin was in a better position than most to know it, and not leave his flank exposed. Mind you, such policies have formidable antecedents, with previous practitioners, including Ronald Reagan and Gordon Brown. Neither managed anything on the scale of Fianna Fáil,
of course, where public spending grew at up to 20pc at times of maximum electoral excitement. In present circumstances, no one can promise actual tax
18 Irish Director Spring 2011
Photo: Associated Newspapers/Rex Features
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