Thursday 27 October 2016

Political Budget with no guarantee of political gains was a huge gamble at a time of great uncertainty

Published 13/10/2016 | 02:30

The big Budget hurdle has been cleared - despite the doomsday predictions of recent months - but there are plenty of reasons for Fine Gael deputies to be concerned.

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Paschal Donohoe claimed this as a Budget of, and for, the "centre". But that's something of a stretch. Any Social Democratic government across Europe would have been more than happy to have claimed it, with its tax cuts focused on lower earners, childcare package and welfare increases.

More than that, though, the similarities with some of Charlie McCreevy's budgets of the noughties are hard to overlook.

Arguably, the scale isn't as big - though if you add the €1.4bn already factored into spending next year to the Budget package of €1.3bn, that's as big as anything McCreevy ever did.

But either way, there's no denying Budget 2017 fits in with the old McCreevy mantra of 'When I have it, I spend it'.

Tánaiste Frances Fitzgerald bristled at the comparison on radio yesterday. But despite her insistence the Government was being prudent, there's no denying it pushed its spending envelope to the very limit. They even managed to find €300m down the back of the couch in the Department of Finance in the final few days before Michael Noonan got to his feet.

And Fitzgerald's defence that the money was being spent on vital and valuable services sounded very like McCreevy's equally seductive arguments to the Banking Inquiry about his own spending back in the Celtic Tiger days.

The reality is that, after Tuesday, the long-established claim that things would have been different during the boom if Fine Gael, not Fianna Fáil, had been in power has been seriously undermined. Incredibly, many of the mistakes of the noughties are being repeated.

There is a prevailing, and deeply uncomfortable, sense of déjà vu about how matters are developing. Given the uncertainty over Brexit - and the potentially hugely serious impact on the Irish economy - the Government should have played it safe. Particularly given the hard lessons of the crash.

Instead, it went for a blatantly political budget - with absolutely no guarantee that it will pay political dividends. There's a real danger that Fine Gael, in particular, has fallen between two stools.

Core Fine Gael voters - who are centrist/right-of-centre and who believe in fiscal rectitude and responsible governance - are unlikely to be impressed. What do they make, for example, of the return of the first-time buyers' grant; the big hike in spending; the long fingering of a rainy day fund; or the obvious gamble that growth would continue despite Brexit?

Meanwhile, that section of the electorate that believes they should get back to 2007 levels of income as soon as possible, are hardly likely to be satisfied by a fiver a week.

'Underwhelmed' was the sentiment expressed by virtually every punter interviewed on television and radio over the past couple of days - on occasions it was expressed a lot more colourfully than that. Given the extent of the give-away, the negative response has been extraordinary.

Either the Government spread the jam too thinly or big sections of the electorate have hugely unrealistic expectations about what is possible. It's probably a bit of both.

The obvious worry for Fine Gael is that any credit that is there will go to Fianna Fáil. But there's also a real sense that Fine Gael is now chasing the wrong target audience. There's perhaps 30pc of the electorate that would consider voting for Fine Gael. Tuesday's Budget was hardly for them.

The main Government party is in danger of losing its identity.

Fianna Fáil, regrettably, has been in full populist mode these past few weeks. It may or may not work and it's been depressing to watch. But at least, in cold political terms, it has a strategy of where it wants to position itself - left-of-centre like the old Fianna Fáil, pre-the men in mohair suits.

Fine Gael, in contrast, is sending out hugely mixed messages. To be fair, it's incredibly hamstrung because it has to rely on others to stay in power. The Independent Alliance must be infuriating to deal with - Shane Ross, in particular, still talks like he's not a member of the Cabinet. And Fianna Fáil, of course, has the old enemy exactly where it wants them.

Simply keeping the Government afloat is an exhausting business. It's no wonder that the Budget lacked a vision or an obvious coherent strategy for the country. When you have a Government that's dozens of seats short of a majority, and led by a Taoiseach who is hanging in there by his finger nails, that's what happens. The odds suggest it might now muddle through for another year or two. That might be better than having no government - look at what's being played out in Spain. But, with what's happening with Brexit, is muddling through enough?

The only consolation politically for Fine Gael is that nobody else is grabbing the electorate's imagination. Fianna Fáil had its populist wings clipped in the most recent opinion poll. Sinn Féin seems curiously impotent and almost sidelined by the post-election arrangements. Labour's comeback will happen but it will be slow and piecemeal. And Independents have had their problems in the new Dáil.

Maybe, though, there's a reason for voter indifference that the likes of Fine Gael and Fianna Fáil are overlooking. The suspicion lingers that there is a great swathe of centre-ground voters looking for a home. You won't see them in a 'Prime Time' audience giving out about their lot; or find them taking part in a march against water charges. And the danger is that because they don't shout the loudest, that they are being ignored. They certainly were in the Budget.

Shane Coleman presents Newstalk Breakfast, weekdays from 7am

Irish Independent

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