If 2024 has been the super year for elections, it has been super bad for incumbents.
Donald Trump’s victory in the US presidential election was just the latest in a string of losses for incumbent administrations in 2024 with people in some 70 countries going to the polls.
The Fine Gael-Fianna Fáil-led coalition appears to have bucked that political trend, however, and is now almost certain to lead the next government.
What made the difference? Psephologists will pick over voting patterns and come to various conclusions but there’s one obvious one. Money.
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The public finances have gone stratospheric on the back of unprecedented tax receipts. Corporation tax, income tax and VAT are all at record levels. As a result, the outgoing government is on course to generate a budget surplus this year of over €12 billion (on a per capita basis, that’s the largest in Europe) and that’s before any consideration of the €15 billion in Apple tax money which is also due to flow into government coffers. It’s hard to imagine the public finances ever being in a better position.
It has enabled the government to spend big and to preside over a sequence of voter-friendly giveaway budgets, framed around billions in electricity credits, rent reliefs, double childcare payments.
This is not to say households here aren’t angry about cost-of-living increases just that the government’s budgetary buffer may have quelled the potential backlash that we’ve seen being meted out to other governments in other countries.
We’ll get the next instalment of the government’s budgetary largesse on Wednesday when the latest exchequer returns data for November are published. November is the biggest and most consequential month of the year for tax, the biggest month for corporation tax and the biggest for income tax.
The strength of the public finances gave rise to some big election promises from both incumbent and Opposition parties. How we use these projected surpluses is perhaps the single biggest political question in an infrastructurally-starved economy with an acute housing crisis and against such an uncertain geopolitical backdrop.
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