News Analysis

Thursday 2 October 2014

Shane Coleman: The next 10 days will show if our leaders have real political courage

Published 26/11/2012 | 17:00

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TEN days with the potential to make or break this Government. Tomorrow, the Cabinet will consider the report of the expert group on abortion. Afterwards, it will turn its attention to the December 5th Budget – the most important that it will introduce.

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Both issues have to be handled with maximum political adroitness – something the Government hasn't often proved capable of in the past 12 months.

A repeat either of the clumsy way it has handled the fallout from the tragic death of Savita Halappanavar or the sloppy mismanagement of last year's Budget could spell serious trouble for the Coalition.

On one level, the abortion issue seems quite straightforward. It is widely expected that the expert group will come out in favour of legislating for the X case, followed by regulations. While that might have proved incredibly contentious a month or two ago, there is no question that the Halappanavar case has changed everything.

But that doesn't mean there aren't still large hurdles for the Government to cross. The devil, as ever, will be in the detail. Many Fine Gael TDs are concerned that legislating for terminations in cases where a mother is suicidal potentially opens the door for a more liberal abortion regime. They will be demanding safeguards in the regulations to ensure that this is not the case.

It should be possible for the two coalition parties to reach agreement. They have little choice. The political consequences, particularly for Labour, of not doing so would be enormous. But the past 30 years has shown us that nothing in relation to the abortion question is straightforward. Inevitably, this will be a huge test of relations between Fine Gael and Labour.

As, far more imminently, will Wednesday week's Budget. If anybody was in any doubt about the impact the upcoming Budget is going to have on the typical family, the recent pre-budget research carried out by business advisors Grant Thornton will have focused minds.

It crunched the numbers and found that PAYE households may have to pay over €3,000 in additional taxes next year through a combination of increased PRSI and Universal Social Charge contributions, reduced pension relief and a property tax.

One can quibble with whether or not this or that tax increase will actually happen – though changes in PRSI, motor tax, VRT and excise duty seem inevitable. But it's difficult to disagree with Grant Thornton tax partner Peter Vale when he says: "Disposable incomes are going to take a major hit. Under every scenario we have run, tax bills rise by more than 10pc.

"The Government faces stark choices if it is to meet commitments made to the troika. In the Department of Finance, officials are running numbers on spreadsheets. Every outcome is likely to be unpalatable."

You can argue that the Government is only cleaning up the mess made by the previous administration. But the feeling persists that Fine Gael and Labour erred in last year's Budget.

So soon after its thumping election win, it could have got away with a really tough Budget. Instead, it introduced a curious 'bit here, bit there' plan of cuts that actually didn't impact too heavily on the typical household.

It can't do that this again this year. When the effect of Budget 2013 hits home, the electorate won't be as understanding as they might have been 12 months ago.

Nor, perhaps, will those cabinet ministers who – if reports are to be believed – are being largely excluded from the budgetary process. The word is that all the key budgetary decisions are being made by the Economic Management Council, the sub-committee made up of the Taoiseach, the Tanaiste and the two ministers for Finance, along with senior officials.

The benefit of this approach is that it eliminates the ludicrous kite-flying and leaks that blighted last year's Budget. The downside is that if the Budget is badly received, the lack of buy-in from the other 11 members of the Cabinet has the potential to cause serious tensions within the Government.

THERE must also be doubts as to whether the Economic Management Council contains the kind of radical and innovative thinking that is needed alongside the unavoidable cutbacks.

Enda Kenny, Eamon Gilmore, Michael Noonan and Brendan Howlin have enormous strengths, but they have all been deeply embedded in the body politic for three decades or more. Do they get, for example, the level of public outrage at the level of ministerial pensions and TDs' expenses or the suspicion many private sector workers have towards reported savings generated by Croke Park?

The Budget inevitably has to be tough. But by way of compensation for voters desperate for some signs of hope, it also needs to be bold and reforming. The extent of the economic crisis, along with the anger and volatility of the electorate, demands that the Government shakes off the timidity that it has shown to date. The next 10 days will determine whether it can do so.

Shane Coleman is the political editor of Newstalk 106-108FM

Irish Independent

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