AN ACROSS-the-board cut of 5 per cent in fees and charges set by Government departments and agencies has been proposed by Fine Gael in legislation brought before the Dáil. As a political initiative, it is a guaranteed crowd-pleaser. The party’s spokesman on finance Leo Varadkar estimated the average household would benefit to the tune of €400. Businesses would do considerably better. Unfortunately, the Bill carries with it the whiff of a general election. It brings to mind such notorious easy-money schemes as the scrapping of domestic rates and car taxes.
At a time when the Government – and Fine Gael itself – is committed to cutting nearly €4 billion from public spending in next December’s Budget, this legislative proposal appears to suggest that the economic crisis is over and that voters can anticipate a return to the good old times. That is dangerous territory. It fails to acknowledge the continuing hole in the State’s finances.
Nobody would argue against citizens receiving value-for-money from State agencies. But this blunt instrument, which would require Ministers to impose a 5 per cent cut for all charges, is hardly the way to go about it. Ability to absorb such costs varies widely across the public sector. In some instances, regulators have been given statutory responsibility to set appropriate charges. Fine Gael has been critical of this Government’s undifferentiated approach to cutting funding for necessary services in its various budgets. Now it appears to promote a parallel course of action.
Introducing his Private Member’s Bill, Mr Varadkar said Fine Gael will oppose a further €1 billion cut in capital spending in the coming Budget. At a time when jobs are desperately needed and State infrastructure is in dire need of renewal, such an approach is sensible. The economy is beginning to recover and planning for future growth and development should take place now. Similarly, our narrow tax base has been incapable of supporting the quality of services demanded by the public.
Further efficiencies and reforms of Government services will be needed in the coming years. In order for that to happen and cause least disruption, approval of the Croke Park deal will have to be secured through the Irish Congress of Trade Unions. That is a difficult and sensitive process. In the circumstances, the need to broaden the tax base has been relegated to the status of background noise. At some stage, however, politicians will have to consider what expert groups have insisted is required: a broadly-based property tax.