Friday 30 September 2016

Transparency makes all the difference between a fair deal and a grubby one

Published 05/05/2016 | 02:30

Fianna Fáil leader Micheál Martin with pupils from St Joseph's Primary School in Macroom, Co Cork, who were visiting Leinster House before the deal with Fine Gael was announced on Tuesday evening Photo: Tom Burke
Fianna Fáil leader Micheál Martin with pupils from St Joseph's Primary School in Macroom, Co Cork, who were visiting Leinster House before the deal with Fine Gael was announced on Tuesday evening Photo: Tom Burke

Politics is a messy business. It is messy in every democracy in the world. When cutting deals, individual politicians have many things to consider: their own interests, the interests of those they represent, their values, what is achievable and what they cannot accept. Those in political parties must also do these things collectively.

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All this involves squaring many circles and keeping lots of balls in the air. As if that was not difficult enough, politicians and parties cannot just think about the deals they make as one-shot solutions. They need to be like chess players, considering how others will react to each possible move they make. The most effective politicians tend to be ones who can think many moves ahead and who can read how others - both rivals and colleagues - will react as events unfold.

Given all this, it was entirely predictable that talks to form a government would break all previous records in duration. It was more inevitable still given that the fragmented nature of the 32nd Dáil is without parallel in living memory, or indeed in the world - no country has anything like the number of Independent parliamentarians that we now have.

The new order of things in Irish politics will, in all likelihood, take years to reach an equilibrium. Nor can it be taken for granted that even if an equilibrium is reached it will be one that produces effective and stable government.

The agreement reached between Fine Gael and Fianna Fáil is the foundation stone of the new order, at least in the short term. The document is very brief, at around twice the length of this column. It is mostly about the rights and responsibilities of the two contracting parties. It also attempts to set down a basic operating procedure. In this regard, it is a well thought-out document.

It contains a lot less detail on how the country is to be governed, and when it comes to matters of policy, the devil is very much in the detail.

Whether a deal is a grubby deal or a fair compromise depends a lot on transparency. In that regard it is positive that the Fine Gael-Fianna Fáil pact contains an explicit reference to publishing "in full" the terms of the agreements arrived at with Independents. Committing taxpayers' money to the projects of Independents without telling taxpayers, as has happened in the past, is fundamentally unfair. Whether the proposed "public service pay commission" is transparent will matter even more to taxpayers than the deals Independents get. That is because the public pay bill is budgeted to go back above €20bn this year, more than the combined cost of all the projects all the Independents have in their wildest dreams.

Social partnership was the closest thing we in the Republic have had to Nordic-style consensus government. It ended up being a very grubby mechanism for vested interests to grab resources. Public sector unions grabbed more resources for their members than anyone else. It is vital that the new pay commission is independent and open about the figures it uses so there is no repeat of the stitch-ups of the bubble era.

Another transparency-related issue committed to in the deal is the adoption of the recommendations made in an insightful piece of work on the role of the Oireachtas in putting budgets together. Last year, a trio of boffins from the Paris-based think-tank the OECD found that Irish law makers had less input into how taxpayers' money is spent than their counterparts in any of 30 countries they looked at.

The Fine Gael-Fianna Fáil deal commits to implementing the many sensible and very normal measures and structures the OECD study mooted.

While this matter is very important to the quality of our system of government, more people may be more interested in what the deal means for their pockets and purses than what it means for the Leinster House sausage grinder.

As there is limited policy detail, it is hard to say, but we do know how the parties have agreed to carve up the infamous fiscal space.

It is often said that the two civil war parties are centre right or even firmly on the right of the political spectrum. That they have agreed to prioritise increased public spending over tax cuts - for every euro that the tax burden is eased, two additional euro will be spent - shows that the parties' centre of gravity is currently on the centre-left.

Along with general promises to increase spending on many items, there is also a commitment to build up a 'rainy day' fund. Contingency planning in public budgeting is prudent, so this is certainly to be welcomed. But whether this is merely intended to look prudent will require much more detail - the outgoing administration talked a wonderful prudence game, only to repeatedly and imprudently crash through its own spending ceilings.

It should also be said that the most effective rainy day fund, and therefore the best way of avoiding future austerity, is to move the public finances out of the red. There is no indication that this is a priority for the next administration and its Fianna Fáil backer - the deal indicates that existing budget targets will be maintained and, as such, that the State will borrow €2.5bn this year and more than €1bn next year.

Only in 2018, the year the deal expires, will the State get back in the black after more than a decade in the red.

Whether that ends up happening is hard to predict. Given the pitfalls facing a government so far from a parliamentary majority, it is much easier to predict that we will have returned to the polls long before Tuesday night's deal expires in 2018.

Irish Independent

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