Sunday 26 October 2014

Brendan O'Connor: It looks bad when the big guys don't share the pain

If you need people to take pain, you need to look at the psychology of it and bring them along with you

Published 09/12/2012 | 05:00

HERE'S a controversial one for you. The bulk of this Budget wasn't that bad for vast swathes of people. Pension and dole rates were not cut and the vast majority of old people won't in fact lose their medical cards, and a lot of the upper end of the squeezed middle – the €40k+ people who pay the vast majority of the taxes in this country – were expecting to be hit much harder with taxes. Most of them will just be hit with the €250 in extra PRSI, which isn't as big a blow to them as it is to the guy on 20 grand taking the same hit.



Many of the €40,000 to €80,000 crowd are also secretly relieved to be losing only a tenner a month on their children's allowance when a lot of them think they should be paying tax on it. These are people who are used to paying a lot of tax, and an extra €500 a year lost on PRSI and children's allowance is not as bad as they were expecting, and it's not going to hit them as hard as the same €500 per annum loss will hit someone on half their wages.

High earners dodged a bullet on the extra 3 per cent USC on earnings over €100,000 and will essentially only lose the same €500 or so as anyone else. The ones affected most by this Budget were the ones on the margins, and they were affected by very specific measures.

The one exception to this, the one big thing that united the whole country and drove everyone nuts was of course the property tax. People find it hard to believe that at a time when a house has become a liability for over half of the people with mortgages, when one in eight can't pay those mortgages, that under these most adverse and abnormal conditions for property, the Government has chosen to tax people for owning their homes.

The property tax is just one of the measures that will hit people with investment properties hard. From 2014 they will also pay PRSI on rental income. Twenty-nine per cent of buy-to-let mortgages are in arrears, and given that a lot of second properties are apartments in Dublin, these properties are potentially worth just a third of what they were bought for.

So, for the middle classes the property tax was the really hard one to swallow. But, you know, that's what we do in this country, we swallow things. Everyone comments on how we just swallow things politely and move on and don't riot and everything.

But people were angry last week. This is as angry as they've been in a while. Even though they knew in advance about the property tax, and pretty much everything else in the Budget.

I think the anger was not just about the property tax per se, I think the anger was also partially to do with optics. If you need people to take pain, you need to bring them along with you. You need to look at the psychology of it.

This might be a controversial thing to say, but I think if you are going to introduce the property tax, the minister responsible for introducing the current incarnation of the property tax should be in the country on the day it is formally announced.

Crazy, I know.

In fact, I'm going to take it a step forward. If you are going to introduce a property tax and you are trying to convince everyone that we all have to share the pain, as the property tax is announced, the minister who is associated with it in the public mind should not be photographed with his arm around one of his staff while having a few drinks (€55 for the two glasses of wine and the two beers, according to the Mail) in a luxury hotel in Doha, in Qatar, a luxury hotel that we are paying for.

I am not for a moment suggesting that Phil Hogan wasn't working hard out in Doha. I'm sure they were after a long day at the climate change conference and they probably deserved the couple of drinks. But it just looks bad. It could look to people at home like we are just the little people here in the cold, expected to take all the pain, while the important guys like Phil are in Doha having a bevy, and couldn't even be bothered to show their faces here when their big property tax is coming in, a property tax that has already proved controversial and unpalatable in its current guise as the household charge. It just looks bad.

I suppose it's about a bit of political capital, a bit of moral authority. It's about looking as if you yourself are doing the right thing too.

Not to repeat myself, but I was saying last week that for Noonan to ask people to bear more pain while he refuses to deal with the issue of massive pensions for the bankers and senior civil servants who destroyed the country and helped put us in this mess, is a bridge too far. Noonan went that bridge too far. It would be illegal to try and target these people apparently. But it's not illegal to target women on maternity leave, kids who need shoes and clothes for going back to school, carers who might want a week off in the year from looking after a loved one or a kid with a severe disability or the children's allowance. There are no laws about that. But you can't take anything off massive pensions, paid to guys, many of whom made a complete balls not only of their jobs but the institutions they worked for, and the country itself.

But if you refuse to tackle the fact that these people are still living high on the hog from State funds, then you actually have no moral authority to take money from children and pregnant women and carers. It just looks like bullying. Like with Big Phil

in the hotel, it's all about the optics. If people saw that the fat cats were being dealt with, they might accept more readily that everyone is taking the pain.

It would have been nice to see the politicians have a look at their own pay and pensions as well. But they didn't. Even something symbolic would have done it. Instead we got some tinkering with expenses which even politicians themselves (opposition politicians, admittedly) who have, as they say, skin in the game, say will make no substantial difference. It just looks bad.

Speaking of looking bad, the thing that will have topped off a lot of people's anger will have been the rare appearance by our Taoiseach on the news the other night. It is not often that the Taoiseach deigns to give an interview on live TV. He and his handlers reckon that he is better at running around giving high fives to ordinary people. Ordinary people understand him and are generally happy to see him, seems to be the idea, whereas that media crowd are just negative people who'd be trying to catch him out.

Eileen Dunne wasn't trying to catch him out on the news when he made a presidential-style appearance to talk about the broad sweep of the Budget. But then she didn't need to. He kind of messed it up for himself. It was kind of like an appearance from a slightly nerdy overlord from outer space on a bad intergalactic video link. He seemed at a strange remove from everything. He seemed in no way really connected with the nitty gritty of the Budget, or what was going on in the country.

And then, a few times, the record appeared to get stuck and he started skipping, repeating a word or a phrase, as if he had malfunctioned. But even when he was functioning he had nothing much to say, and then to top it off, it looked like the batteries were falling out of his ear.

I'll guarantee you one thing. It'll be while before they'll let him out again. It'll be back to his never-ending presidential tour of the country and Europe. Smiling and high-fiving.

The kind of Churchillian appearance that was required on Wednesday night to get people to buy into another year of austerity, with the promise of good times ahead, this was not.

We were not at home, thinking, "He's right. He's with us. He's got skin in the game too. He is our leader and we will take the pain and follow him." More just, "Oh, there's Enda. We haven't seen him do an interview for ages. Is he still meant to be running the country? Funny that."

Sunday Independent

Read More

Don't Miss

Editor's Choice