I suppose this is what we expected, isn’t it? The first week of the campaign has seen all parties embark on an incontinent splurge of promises to spend vast amounts of money that the next government may or may not have on a mind-boggling array of giveaways intended to impress voters. Even by the standards we have come to expect, they’ve been losing the run of themselves.
Where to start? Fianna Fáil led the way, launching its manifesto on Monday with a promise of an extra €60 billion in spending over the next five years. There’s the Apple tax money to be spent, of course – it’s burning a hole in everyone’s pockets – but Micheál Martin also unveiled plans to tear up the existing rule that limits expenditure increases to 5 per cent a year (which the Government has broken every year since its introduction) and relocate it somewhere around 6.5 per cent. Whether this new rule will be adhered to, of course, is anyone’s guess. Mine would be not.
Fianna Fáil is not by any means the worst offender. And at least it has published its manifesto. All the parties are throwing around promises like snuff at a wake – on housing, public transport, childcare, etc, etc; the election is turning into a massive auction, as if all those enduring social problems can be solved by spaffing money at them.
The suggestion by several Opposition parties that the solution to the housing crisis involves the setting up of a State construction company is one that deserves special mention. The idea that the industry will be made more efficient by granting its workers the status of public sector workers is optimistic, to say the least. Maybe they’re thinking of putting Michael O’Leary in charge of it?
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Fine Gael has not yet published its manifesto but the party has hardly let a day go by without some extravagant pledge. They briefed newspapers last weekend that it would spend some of the Apple tax money on topping up the help to buy scheme – a wheeze of such recklessness that they now seem to be backing away from it. We’ll see.
In the meantime, Simon Harris can’t restrain himself from unveiling all sorts of goodies on his Instagram – abolish university fees, double payments of child benefit in August, cheap childcare, abolishing the means test for carers. Someone should take his phone off him before he bankrupts the country.
None of this is to suggest that increasing public spending over the next five years is a bad idea. Of course it’s not. God knows, there’s enough areas where public investment is badly needed. The State will get bigger, there will be more people here, more demands for services. And there are plenty of existing shortcomings.
So, it is up to voters to demand it of politicians when they call: what’s the plan if corporation tax hits the buffers?
Rather, what is dangerous in the current election debate is the assumption that the money, in unlimited amounts, will always be available for whatever it is that a future Government wants to do. That there is no threat to the corporation tax revenues that Donald Trump and pals already have their beady eyes on. That the world cannot change to our disadvantage.
[ Trade, tax and security: what Donald Trump’s victory means for IrelandOpens in new window ]
Because if you believe all of those things – and everyone involved in the election campaign appears to – then you are much less likely to be prepared to act speedily if things do change to our disadvantage.
One person who advises multinationals is flabbergasted at the “bizarre complacency about what a threat Trump poses”.
“It looks like it will be ignored by the political system until it’s too late,” this person says.
It’s like 2007, suggests one senior Fine Gael figure, a reference to the election of that year in which Bertie Ahern, against the expectations of many and despite his administration being generally unloved, secured a third term of office due to the desire of voters for stability and security of the economy. It’s a theory you hear around the place.
Nobody seems to mention what happened after 2007 – an economic catastrophe. Half a million people lost their jobs. Years of austerity followed. Wealth and prosperity were wiped out. Lives were destroyed. Last week, in the aftermath of Donald Trump’s victory in the US presidential election, a colleague spoke with a senior figure in one of the State agencies that deals with foreign multinationals. His summary of the conversation: “They are all sh**ting it.”
A couple of days later, I spoke with a senior executive in a professional services firm, regularly engaged with the multinationals. What was the reaction to the Trump victory, I asked. “We are all sh**ting it,” he replied.
No such alimentary difficulties among our politicians.
At the risk of sounding like a broken record, let us remind ourselves of two rather important facts.
1. The prosperity that has enabled the outgoing Government to run surpluses, save money and hike spending – including the “once-off” cash giveaways for the last three years – depends on massive corporation tax receipts from a small number of multinationals.
2. Those revenues are under threat as never before.
It is now clear that politicians in this election campaign will not outline contingency plans of their own accord; they don’t want to be seen as promising less than any of their competitors, or to be sounding gloomy about the future. So it is up to voters to demand it of them when they call: what’s the plan if corporation tax hits the buffers? Where would you spend, where would you not spend? Where do you raise taxes if you need to? Where are your priorities?
Of course, everyone hopes that none of this will be necessary. Hope is a fine thing. But it is not the basis for a strategy for the future. Let’s get some answers. Give ‘em hell on the doors, people.
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