News Comment

Thursday 2 October 2014

Jody Corcoran: No wonder popularity of 'populists' is growing

In the absence of real change in people's lives, Sinn Fein's fantasy economics will win out

Published 15/06/2014 | 02:30

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POLL SUPPORT: Sinn Fein leader Gerry Adams with Louth councillors Tomas Sharkey, Imelda Munster and Edel Corrigan. Photo: Tom Conachy
POLL SUPPORT: Sinn Fein leader Gerry Adams with Louth councillors Tomas Sharkey, Imelda Munster and Edel Corrigan. Photo: Tom Conachy

It is easy to see why people are voting for Sinn Fein and the Independents. In short, Fine Gael has become jaded and cynical, Fianna Fail continues to fall short and Labour wears a sense of entitlement on its sleeve. In a way, Sinn Fein and the Independents are all that are left.

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But there must be more to it than that. In fact, the possibility exists that something far more fundamental is happening, that we are, in fact, living through history, the political outcome of which will be a permanently altered landscape.

In two opinion polls last week, Sinn Fein had the support of around a quarter of the electorate and the Independents had more than a third – what Angela Merkel calls the "populists" are more popular than ever and there is little wonder why.

After the recent elections, questions were asked as to whether Sinn Fein and the Independents could maintain that level of support into a general election.

In the few weeks since, it is as if the dam has been breached: voters in ever greater numbers are turning to Sinn Fein and the Independents and, in all likelihood –who can claim otherwise? – will also vote for them in the next election.

Paddy Power has not yet published odds on a Sinn Fein-led Government, other than a Sinn Fein majority at 100/1, but the odds on a Sinn Fein-Left Government must be shortening.

An election could be caused at any time such is the 'state of chassis' as exists, and will continue now that there is little prospect of the current Government being re-elected.

The rhetoric of the Labour leadership contest has, if anything, only added to the sense that this Government will not survive until 2016.

Alex White has set himself at odds with Fine Gael on three issues, the need to adhere strictly to EU budgetary targets, the circumstances surrounding the resignation of the Garda Commissioner and the Government's blatant attempt to gerrymander the banking inquiry.

In marked contrast to the initial view in Fine Gael, it now seems that the election of Alex White as leader will add further to the instability.

Neither can stability be assumed if Joan 'end austerity now' Burton wins.

Last week, both the EU and the Central Bank here were adamant that a further €2bn in cuts and taxes be imposed in the Budget. The likelihood is that Michael Noonan will strike for the middle ground – but anything could happen between now and then.

A Cabinet reshuffle will do little to deliver what Enda Kenny really needs, which is a big bazooka from Europe, that is, the original seismic shift. If he does not secure the bank debt relief deal he maintained had been promised two years ago, then the odds on a Sinn Fein-led government will shorten.

Rather than support from Europe, Kenny has instead

been promised the mother of all battles to preserve the country's byzantine corporation tax regime.

Last week the EU announced an investigation into how low-tax Ireland has helped large multinationals like Apple reduce their tax bills by billions of dollars – at a time when state coffers throughout the continent are in need.

The Government has said that it will "defend our position" in the European courts if necessary. But no such stance was threatened, let alone taken, to force legal clarification of the ECB's actions here four years ago which underlined the link between Ireland's bank and sovereign debt, a decision yet to shift in a seismic, or any, way at all.

In the face of such reluctance, it is little wonder that what might be termed 'Euro-critical' politicians such as Luke 'Ming' Flanagan and all in Sinn Fein have soared in real polls and the opinion polls.

For its part, Sinn Fein has nuanced its position in the great corporation tax debate: protect the headline 12.5 per cent rate – it would be difficult to unravel anyway – but close a number of reliefs and loopholes used by multinationals.

It recently emerged that Apple cut its corporation tax bill here by €850m in a five-year period, inclusive to 2008, to just €36m by availing of so-called 'lower rates' than the headline rate.

The company employs 4,000 people in Cork – the holy grail of a job – and creates further employment through related companies, but recruits some employees for as little as €26,000 a year – the working poor, if you like.

Meanwhile, the country's small and medium enterprises, and the retail sector, lie shattered. Last week, an ESRI study found that 45,000 people currently out of work would not see financial benefit from taking a job when childcare and transport costs are taken into account.

It is not too difficult to join the dots. . .

A recent Sunday Independent/Millward Brown poll found that far more people believed the tax policies of Fine Gael (36 per cent) would hit them harder than those of Sinn Fein (19 per cent), a view strongly held across all social classes including ABC1, the cohort said to have most to lose if Sinn Fein is in government. The finding has baffled economists.

But after six years of austerity, and the prospect of 10 more years to come (if John Bruton is correct) there should be no sense of wonder: the appeal of Sinn Fein's wealth tax, for example, is popular – they say the tax would bring in €800m, more than enough to abolish the dreaded property tax.

Politicians and economists can argue all they want about a predicted flight of wealth, and decry what they call the fantasy economics of Sinn Fein, but in the absence of a real change in the circumstances of people's lives, Sinn Fein's fantasy sounds far more appealing that John Bruton's reality.

Sunday Independent

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