Spring surprise poses challenge
The Coalition will be in a unique position when it launches this week's Spring Statement. For once, Fine Gael and Labour have managed the perfect synergy of a virtuous political and economic cycle. The economy is on the up from the sackcloth and ashes they inherited in 2011. Suddenly, an astonishing set of possibilities is unfolding should the Coalition govern wisely. Putative growth rates of 4pc in 2014 and 5pc in 2015 means Ireland could possibly be positioned for a return to full employment by as early as 2018. Of course, opportunity can often be notoriously accompanied by danger, particularly in an election year. In the Coalition's case, the temptation to behave unwisely, or, worse still, in a similar manner to Fianna Fail in 2002, will undoubtedly be accentuated by the cruel fate of the Rainbow in 1997. Whilst the then Fine Gael, Labour Democratic Left mix most assuredly learnt that virtue can be a lonely reward, this should not deter the Coalition from following a similar path.
In fairness, to date, they appear determined to follow the modest prosperity template set by the Tanaiste Joan Burton. Few would argue that the savage cuts of the age of austerity have done real damage to social cohesion and the morale of the state. Ireland needs, and deserves, a break. The economy will benefit from wage rises for public and private sector workers. In taxation, the Coalition should focus on issues such as the egregious impact of the USC on the real incomes of the working poor. This was an emergency tax designed for an emergency that has now passed. It is time for that tax to go or to at least face a thorough reform. After years of cutbacks and under-investment, Ireland needs to get building again. We also need to address key issues for the health of our society such as childcare. That said, indications that differences are arising between Fine Gael, who appear to want a pre-election spending splurge of €2bn, and Labour's somewhat more calibrated €1.5bn, do provide us with some source for concern.
Whatever about Labour, Fine Gael appears, as we saw last week, to be particularly susceptible to the Bourbon syndrome of forgetting and learning nothing. Labour, at least, appears to recognise that if the Government wishes to ensure that its chief point of political differentiation from the Sinn Fein/Fianna Fail 'coalition of chaos' is to be maintained, then it must proceed cautiously. Such an approach may even be in the current Coalition's political interest. Careful now may not be the most romantic of political philosophies. However, though caution is not normally an Irish trait, the economic collapse may have wrought a fundamental change in our psyche. Following the old Charlie McCreevy give-it-a-lash 'I'll spend it whilst I have it' style of economics might neither be thanked nor rewarded. Equally significantly, the Coalition should recognise that giveaway politics will see it lose whatever slight vantage point it has secured amidst the clouds of the high moral ground