Sunday 26 January 2020

Fianna Fáil plays safe on election promises and will ditch Celtic Tiger fiscal policy

Caution: Micheál Martin (right) at Leinster House last month. Photo: Leah Farrell/RollingNews.ie
Caution: Micheál Martin (right) at Leinster House last month. Photo: Leah Farrell/RollingNews.ie
Fionnán Sheahan

Fionnán Sheahan

Fianna Fáil will put only limited spending hikes in its general election manifesto to avoid accusations of being "reckless" with the economy.

Ditching its Celtic Tiger-era lavish spending policy, Micheál Martin's party will propose increases of €11bn over five years, well within expected economic growth rates.

Fine Gael will make economic stability a key part of its election campaign and point to Fianna Fáil's role in the economic collapse a decade ago.

Fianna Fáil has also written to the Dáil's independent economic adviser to see if it will run the rule over the costings of its election promises.

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Finance Minister Paschal Donohoe will be sticking to his prudent budgetary policies as he outlines his party's plans for the next five years.

Fine Gael feels Fianna Fáil is still vulnerable on the economy following the banking crisis and economic crash.

Planning: Fianna Fáil finance spokesman Michael McGrath
Planning: Fianna Fáil finance spokesman Michael McGrath

However, after backing four Fine Gael budgets, Fianna Fáil will feel it has regained confidence.

"We have to work within what is predicted economically. There'll be no way to put the reckless tag on us. Michael McGrath (Fianna Fáil finance spokesman) is very prudent anyway," a party source told the Irish Independent.

"It's all Brexit dependent, obviously. Unless something untoward happens with Brexit, then things will change. There can't be anything that jeopardises the country's economy."

Fianna Fáil's manifesto will be published in the opening days of the general election campaign proper.

The party is currently projecting €11bn in current expenditure increases in the five years of budgets from 2021 through to 2025, the lifetime of the next government. This figure includes expected public service pay rises.

"The manifesto is 99pc done now. Obviously, work will be ongoing until the day before the launch," the party source said.

Fianna Fáil is also open to having its figures assessed independently.

The Parliamentary Budget Office (PBO) provides independent and impartial information, analysis and advice to the Houses of the Oireachtas.

This information is also used by the political parties in setting out policies.

Fianna Fáil is awaiting a reply from the PBO to its query on what role it can play in verifying the cost of election promises.

"We're trying to do it all by the book," the party source said.

The broad economic outlook of Fine Gael and Fianna Fáil is likely to be largely similar in the coming election campaign.

But Fianna Fáil is still seeking to rebuild its reputation for economic competence.

The collapse of the Celtic Tiger economy was exacerbated by the high levels of growth in expenditure in the years running up to the crash.

The additional resources directed towards the political priorities of health, social protection and education ultimately proved unsustainable.

The day-to-day spending on health increased more than three-fold from €4.5bn in 1999 to almost €15.5bn in 2009.

The cautious approach now adopted by Mr Donohoe is aimed at ensuring any spending increases are affordable both now and in the future.

But it is being contrasted with former Fianna Fáil finance minister Charlie McCreevy's mantra of 'when I have it, I spend it'.

Since September, Fine Gael has been targeting Fianna Fáil with a string of accusations that it is "reckless" on economic matters.

Mr Martin's membership of the Fianna Fáil governments that presided over the Celtic Tiger boom and bust will be a line of attack in the campaign.

Irish Independent

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