Fianna Fáil’s reinvention as a party of caution
Depending on who you believe, Fianna Fáil’s last economic plan either destroyed the economy or rescued it.
Over the past five years, Fianna Fáil has been reticent to attack the Government’s financial decisions and often threw out the line that Michael Noonan was taking credit for a formula set out by Brian Lenihan.
In reality it was the Troika who got the final say on most of what happened in the years after we went running to them for help – and that’s why Fianna Fáil has been quiet on economic policy in recent years.
So it was another step on ‘rehabilitation road’ when Michael McGrath entered the party’s first bid in the election auction yesterday, while pointing out that they had “learned from the lessons of the past”.
He stopped short of asking for forgiveness but suggested that they had done their penance on the Opposition benches.
Give Fianna Fáil another chance and it will be “responsible” and even “cautious” with our tax money this time.
It will even set up a “rainy day fund” that would see some corporation tax income stashed away in case of another economic collapse.
Now that’s not to suggest for a second that Fianna Fáil would oversee another downturn, Mr McGrath stressed, but we are “at risk” from external factors like a potential Brexit.
The key plank of Fianna Fáil’s economic plan will be reductions in the rates of the Universal Social Charge (USC) – but not its abolition.
Under the proposal, workers can look forward to an extra €220 in their take- home pay in 2017. That’s less than half of what Fine Gael is promising.
Ultimately, over the lifetime of the next government, Fianna Fáil would abolish the USC on all income up to €80,000. Anybody earning more will only pay USC on the amount above that figure.
Asked why Fianna Fáil won’t just abolish USC, as its rivals plan to do, Mr McGrath said the party wouldn’t promise something they couldn’t guarantee.
His tax cuts will cost €3bn, whereas Mr Noonan’s will cost €4bn.
“If the amount of kites flown by the current Government were to land on Merrion Street, the fiscal space would be blown out the window,” Mr McGrath claimed.
So Fianna Fáil is now the party of moderation and will ensure “the recovery is secure”.
The ironic twist is that its conservative budgeting could cost it votes.