Sunday 28 December 2014

Political brinkmanship is a dangerous game for Coalition

Published 12/08/2013 | 17:00

FIRST things first. Whatever games are being played behind the scenes in Government, there won't be a cut in the old-age pension come Budget Day.

Not unless Enda Kenny and Eamon Gilmore have taken a joint decision to commit political hari kari.

Despite the State's many economic crises over the decades, only one government has cut the pension. Ernest Blythe took a shilling off the rate in 1924. Almost 90 years on, it's still regularly thrown at Fine Gael.

More recently, the last government never recovered after a far more modest proposal to means-test the medical card for over 70s prompted a massive public backlash.

There may be solid theoretical arguments for cutting the old-age pension. Just why is it fair to leave the €230-a-week OAP untouched while cutting the basic social welfare rate, back-to-school allowance, child benefit, the number of special needs assistants etc, etc?

But political choices, sadly, are less about fairness and more about electoral concerns. It's why child benefit hasn't been, and won't be, means-tested or taxed. Middle-class people – who are far more likely to vote – would be outraged. So instead, the Government goes for an across-the-board cut in the rate, disproportionately affecting the less well off.

It's called realpolitik. Political cowardice may be a more accurate term.

Awful though it was when the troika arrived, it was hoped there might be one positive. The State could look at the entire system of taxation, social welfare and public spending and radically reform it. Start from scratch. It could never happen in 'normal' times but the troika's presence could provide political cover for highly unpalatable, but necessary, changes.

It didn't happen then and, in what are hopefully the final months of the troika's presence, it won't happen now.

The older you are, the more likely you are to vote. And Fine Gael's support is strongest among voters over 55. The main government party waited three decades to win an election. Enda Kenny isn't going to throw away the chance of becoming the first Fine Gael Taoiseach to be re-elected by cutting the pension.

Labour, meanwhile, already faces the prospect of losing half its TDs (on a good day). The cuts to social welfare, education and basic services have hit it far harder than Fine Gael. It cannot afford to give its political enemies the additional accusation of targeting the elderly to the already weighty charge list against them. Labour TDs just wouldn't wear it. Nor, one imagines, would its ministers.

So what's going on? Why are stories about the possibility of cutting the pension leading national newspapers?

Make no mistake, the media hasn't invented this story. When push comes to shove, there won't be a pension reduction, but that doesn't mean the option hasn't been raised.

It's all part of the elaborate game of political brinkmanship going on behind the scenes in Government. And which has gone on for the previous two budgets.

Those budgets were largely fought out through the front pages of the national newspapers. The pattern has become depressingly familiar. With billions having to be cut, various worst-case scenarios are put forward by the big spending departments in an attempt to mobilise opposition and hopefully soften attitudes by the time the final budgetary decisions are made.

It has hugely irritated the ministers not involved but it has arguably worked as a tactic.

The situation is further complicated in this year's Budget. Not only are individual departments fighting their corner, but there is a serious disagreement between Fine Gael and Labour over how much should be cut. Labour doesn't accept the need to keep to the original target of €3.1bn. Some of its TDs – with, it would seem, the tacit approval of the leadership – are even very publicly warning the future of the Coalition could depend on getting a suitable compromise.

That's a dangerous game to be playing for any coalition – particularly when the full economic facts aren't available. Some economists warn if the second-quarter economic data shows a continuation of the trend in the first, then the whole Budget strategy is going to be in trouble. Without some pick-up in the economy, they say, it simply won't be possible to go for less than €3.1bn in adjustments and keep with the troika programme.

Those figures are due out in September, just weeks before the Budget. Unless the Taoiseach and, particularly, the Tanaiste can quickly enforce discipline, there is a real risk the public utterances and off-the-record briefings of its ministers and TDs may by then have backed the Government into a corner.

It's a time for cool heads. Right now though, the coalition parties seem more intent on playing with fire.

Shane Coleman is Political Editor of Newstalk 106-108FM

Irish Independent

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