Friday 1 July 2016

Fionnan Sheahan: Cowen’s parting shot has been to narrow budgetary options for his successors

Published 25/11/2010 | 11:13

GOVERNMENTS are supposed to set out their plans for the future at the start of their term in office – not at the end.

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Taoiseach Brian Cowen yesterday tied the country into economic policies for the next four years, even though he possibly only has four weeks left in office himself and his Coalition will definitely be gone from power in four months’ time, at most.

It is a severe injustice that the bulk of the ministers who lead the country into the economic crisis and mismanaged it through the same crisis are now setting out the path to recovery.

‘The National Recovery Plan 2011-2014’ lacks a degree of credibility, as it won’t be implemented by those who put it together.

Finance Minister Brian Lenihan clearly indicated he regards the plan as a general election manifesto. He said the plan had enormously important political implications.

“This document has to be basis of any sensible proposals for the next general election. Anything else that’s put forward is nonsense,” he said.

Green Party leader John Gormley focused on the narrow area of his own party’s pet policies and delivered what can best be described as a party political broadcast.

In the midst of an economic crisis, Mr Gormley could have been expected to take a more wide-ranging view.

Taoiseach Brian Cowen has decided at this late stage in his tenure to put in commanding performances at public appearances.

Again yesterday, Mr Cowen appeared to be in control of the detail of the plan and dealt ably with any queries.

But it’s a bit too late to be trying to turn public opinion around and make a lasting impression.

The upping of his game is reminiscent of former Taoiseach John Bruton’s last days as Fine Gael leader in 2001, when he fought a heave to no avail.

The die is cast for Mr Cowen. Mr Lenihan’s forthright pronouncements also rang hollow as he has been wrong so many times before.

The battle lines for the General Election were drawn two years ago once the economic crisis began.

Mr Cowen says tax will return to 2006 levels and spending to 2007 levels by the end of the four years.

The back-to-the-future nature of the plan shows the folly of the auction politics engaged in by all parties in the 2007 campaign.

Fianna Fail backbenchers have secured their price for voting through the Budget in a fortnight with the apparent ringfencing of the state pensions from cuts.

The power of the grey vote has once again shone through as government TDs identify pensioners as their only hope of salvation.

Ironically, the botched handling of the abolition of the automatic entitlement to a medical card for the over-70s has benefited the elderly ‘politically’ in the longer run.

The pension has become an untouchable, although the Government will hit those with private pensions through adjustments in tax reliefs and reductions in public sector pensions.

By contrast, low-paid workers were afforded precious little protection and there will be little in the way of political resistance within the Coalition to the €1 cut to the minimum wage and the widening of the tax net.

The evidence that the minimum wage reduction will protect jobs and truly enhance competitiveness is scant.

Socially, it is a retrograde step to be penalising those in low-paid jobs and making them wonder if they are much better off than on welfare. The poverty trap is back with a vengeance.

Once again, middle income families will be hit by tax hikes on their wages and extra charges on the cost of running a household.

Mr Cowen and Mr Lenihan clearly decided it would be wiser to hold back some of the specific detail of the income tax hikes and the cuts to social welfare payments, such as child benefit and the dole.

The Taoiseach revealed yesterday that the Social Welfare Bill would be enacted before the Dail rises for Christmas. So the votes on cuts in that area can be expected to be fasttracked after December 7.

Learning from past lessons, the Government hasn’t left too many decisions hanging in the limbo to be reversed by sustained public pressure.

The fault line will be simply voting for Budget 2011 in its entirety or not.

Within the 140-page report, there are some other glaring omissions.

The absence of any reference to the costs of the banking bailout means the report has a slightly delusional air.

The cost of the public sector is unquestionably being targeted, but the detail of the public sector reform is lacking.

The growth strategy is less than convincing and nothing new in the way of job creation measures is contained.

Mr Lenihan’s claim that the strategy will provide consumer confidence is quite curious.

A Government in its dying days has shown it is lacking in fresh thinking.

The Coalition spent the past six weeks putting the strategy together.

Now the document is published, the country would have been better off if that time was spent holding an election and allowing a new Government draw up its own plan.

Instead, Mr Cowen decided in his wisdom that his parting shot would be to ensure he narrowed the options of his successors.

The incoming Government, presumably of Fine Gael and the Labour Party, will have to clean up the mess with little room for manoeuvre.

Fianna Fail will be gone from office, but the legacy of the era of Bertie Ahern and Brian Cowen will linger for years to come.

Irish Independent

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