Monday 26 September 2016

So it's back to spending, only now we don't have it

Published 19/10/2015 | 02:30

Just 21pc felt personally better off than five years ago, compared with 43pc who were worse off and 37pc who felt they had stayed the same
Just 21pc felt personally better off than five years ago, compared with 43pc who were worse off and 37pc who felt they had stayed the same

It's rare with an opinion poll that party standings aren't the main story. Yesterday's Behaviour & Attitudes survey was that exception. The poll, mostly taken before the Budget, showed the two Coalition parties still struggling badly to get traction with voters. But far more interesting were the answers to two questions: a) did people feel the economy was better now than five years ago, and b) were they personally better or worse off since then?

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Only 45pc said the country was better now than then - although clearly the economy is in far, far better shape. Over a third said it was worse. More tellingly, just 21pc felt personally better off than five years ago, compared with 43pc who were worse off and 37pc who felt they had stayed the same.

If you're looking at the key factor behind last week's giveaway Budget, look no further than that. The Coalition parties do their own extensive polling and focus groups. They will have known about these attitudes long before this latest poll.

They will also know instinctively that any government is going to find it almost impossible to be re-elected if, under its charge, eight in 10 voters feel either worse - or no better off - since the depths of the crisis.

That's why they threw the kitchen sink at the Budget in a last gasp bid to change attitudes among voters.

Last year, in his Budget speech, Michael Noonan quoted Robert Frost's poem 'The Road Not Taken', asking: "Do we take the road frequently trodden by Irish governments in the past, a road whose signposts are tax and spend and where one's journey is through boom to bust? Or do we, like Frost, take the road 'less travelled by'?".

Now we have our answer. Despite promising the alternative road of "prudence and caution", Fine Gael and Labour are bringing us down a route trodden far too often in past. To quote the late Yogi Berra, it's like déjà vu all over again.

How many times over the past two years have ministers scornfully referred to Charlie McCreevy's 'when I have it I spend it' line? On what planet does throwing €1.7bn in windfall taxes from this year's figures into the budgetary mix not fall into the 'when I have I spend it' category?

It's worse than that, because, reckless and all as the spending increases were in the noughties, at least it wasn't borrowed money as it is now. Back then McCreevy was running huge surpluses, although as we later realised, they were highly misleading and well...not huge enough.

Noonan and Brendan Howlin have angrily denied the comparisons, pointing to the far greater increases in spending introduced during McCreevy's time. But that's a red herring. Are they seriously suggesting the 20pc-plus increase in spending in 2002 should be the benchmark?

Of course, what was proposed last week isn't of that magnitude. It couldn't be. But given the fragile state of the public finances, our very high debt levels and the uncertain international picture, it is dangerously risky. The favourable external factors that have helped drive the economy - the weak euro and record low interest rates and oil prices - could change at any time.

Counter-cyclical fuelling of an economy, which is already the fastest growing in Europe, suggests we've learned nothing from the huge mistakes of the past decade.

On that point, listening to ministers last week inviting critics to say what spending increases they wouldn't have implemented sounded very similar to the logic heard from McCreevy and Bertie Ahern to justify their budgets.

Rarely a day goes by in Leinster House without somebody from the Government benches reminding Fianna Fáil how it bankrupted the economy. Fair enough, you may say. But last week's Budget raises a legitimate question. Fine Gael and Labour, despite what we now know about the economic crash, were willing to introduce a giveaway election budget, at a time when we're still borrowing money to pay our way.

So would it have acted any differently to Fianna Fáil if it was in government during the boom and there were surpluses of billions of euro?

Last week's Budget hugely undermines their credibility when they claim they would have been more prudent and careful back then.

To go back to the poll, this Budget will, in the short term, boost the numbers of voters who feel better off - in the process improving the Government's re-election prospects. Promises, however, of an end to boom-and-bust policies have never seemed emptier.

Shane Coleman is the presenter of the Sunday Show at 10am on Newstalk.com

Irish Independent

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