Friday 21 October 2016

Stephen Kinsella: Reforming Coalition must ensure its next report card doesn't read 'potential wasted'

Published 11/02/2014 | 02:30

Enda Kenny’s government is drifting back into the mire of the coalition politics of the past.
Enda Kenny’s government is drifting back into the mire of the coalition politics of the past.

Report cards are cool. Small pieces of paper with grades for little Johnny or little Jane, with a nice little line at the end for the parent to tell other parents and smile inwardly about, usually something saccharine like 'a pleasure to teach', unless Johnny/Jane has been swinging from the light fittings for the term.

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Ireland has a report card. Written by the mandarins in the Department of Finance, Ireland's report card is actually a very smart marketing tool for international investors, documenting the country's progress across a range of measures.

The report card is actually a powerpoint slide deck, full of charts, all of which tell one small part of a larger story – Ireland has had a really, really rough time of things and is making headway into growth, fiscal sustainability, and good times for its citizens. This report card, you see, isn't written by the teachers, but by the prefects. So it is a bit biased. The little line at the end might read: after a horrible start to term, beginning to get up to speed. Hopeful for next term.

The report card, if written by the troika, might read rather differently. At each visit, the troika signed memoranda of understanding with the Government, with specific near-term and longer-term objectives the Coalition had to meet. The programme for government, the aspirations of individual political actors, even the wellbeing of the citizens of the country, were subservient to the requirements of this document.

The individual members of the troika got most of the recommendations from our own reports, written down the years and thrown in a heap once the changes recommended couldn't get through Ireland's truly incredible maze of special interest groups and lobbyists.

Most of the recommendations after the obvious 'balance spending and taxation revenue through austerity' were straight out of either large state-led reform initiatives like the law reform commission or the commission on taxation, or just common sense.

So, for example, here is a recommendation for one structural reform from the March 2013 Memorandum, page 4: "Authorities will conduct a study to compare the cost of drugs, prescription practices and the usage of generics in Ireland with comparable EU jurisdictions." Simple, but important stuff.

These reforms were implemented by the Government in spirit when necessary, but the major reforms, of the legal system, of Ireland's political system, of our white-collar laws, whistleblower legislation, of the fiscal controls necessary to stave off another construction boom, all of these were never implemented, or if they were, none have any teeth at all.

The Legal Services Regulation Bill emerged from Cabinet in late January to an uncertain future with a new regulator (hello, Mr Quango, how do you do?) by 2015, with a consultation phase until 2016, and then back to cabinet again for more discussion before finally signing off on the Bill. Let's not forget the Bill establishing Irish Water was through the Houses in under a week.

You could feel it in the approach to the last Budget. A certain laxity of thinking had crept in. Suddenly with the positive momentum of the economy guaranteeing a clean exit from the bailout, Ireland's policymakers took the foot off the gas.

The result was a seriously good policy mix of tax and spend incentives, especially for construction and the destruction of the grey economy, really well thought out and costed initiatives, being mixed up with other crazy ideas like giving free GP care to all children under five.

I said so at the time – if the troika was really in charge of the last Budget, the free GP idea would never have seen the light of day. And yet it did. Mad parish-pump politics combined with hare-brained 'if I have it I spend it' policymaking. We can't go back to that. Please no.

All of which brings me to pylons, and issues like pylons. Infrastructural issues of large upfront cost, large benefit, and flows of positive and negative risks into the future, on health, tourism, and other aspects of public life, where the Government has to make a costly decision that will annoy some people greatly. Whatever their merits or demerits, overground pylons represent a policy choice by a government based on what it sees as important, and based on cost estimates it has received. Two years ago, if required by the troika, I might be writing this column underneath one. Today what has happened?

Suddenly, the Government has backtracked, new reports are required, government ministers are having their statements being countermanded by the Taoiseach in public, the pylons issue has been 'backburnered'.

It all seems like this Government, which Minister Leo Varadkar probably correctly called the most reforming government in recent history, is drifting back into the mire of coalition politics of the past, unable now to meet its own targets, or even agree what they are.

There are, of course, the looming local and European elections. A general election is a stone's throw away, in policy terms. Politicians have to be conscious of these facts, as would you, dear reader, be, if your job was on the line. Let's not treat our politicians too harshly, they work very hard in a broken system. But the potential this Government has, given its mandate for reform, its overwhelming parliamentary majority, and the time it has left, shouldn't dissuade us from thinking about the last third of this Government in aspirational terms.

2014 is the only year this Government will have to really right any of the deeply damaged parts of Irish society that contain within them the incentives to create the next bubble. The report card has yet to be written on the last third of this Government's term. Let's hope it is not 'huge potential squandered'.

Irish Independent

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