Tuesday 20 August 2019

Cormac McQuinn: Vow could be wishful thinking in face of real threats

British PM Theresa May. Photo by Carl Court/Getty Images
British PM Theresa May. Photo by Carl Court/Getty Images
Cormac McQuinn

Cormac McQuinn

It's a nice, reassuring message for the season that's in it. Taoiseach Enda Kenny has pledged next year's stocking will still be filled with USC cuts and State pension hikes. That's regardless of what happens with Brexit.

Mr Kenny is clear, with continued growth in the economy predicted, the commitments made in the Programme for Government stand. But like the child with the lengthy Santa list, can the country really have it all?

With Brexit far from the only economic threat on the horizon, the Government may have to settle for what's really needed - like good, well-funded public services - rather than goodies they've promised to deliver.

Perhaps the greatest domestic threat to further tax cuts and benefit payment increases is the looming industrial strife in the public sector.

There was a taste of it in the Garda dispute and the €50m Labour Court pay deal that averted an unprecedented strike last month. Now the Justice Department is rummaging around to find €25m - while retaining priority services - and other government departments expected to come up with the rest.

Gardaí are just one part of the public sector. Other groups are looking at the deal they achieved and are saying 'why not us too?'

Pay demands will be ramped up in the new year amid calls by unions for an early renegotiation of the Lansdowne Road Agreement, which the Government is clinging to for dear life.

Another threat is the yet-to-be-determined fate of water charges. In all likelihood they'll be scrapped when TDs get to vote on the issue in March. The Government will still have to find the cash to fund Irish Water. That's the guts of €100m even when the saving of not paying the water conservation grant is taken into account.

That cost combined with another pay deal like the one with gardaí would take a hefty chunk out of funds available for further USC cuts.

And that's before Brexit. While, as Mr Kenny says, there may well be opportunities, what happens after British Prime Minister Theresa May triggers Article 50 is anyone's guess.

A bad winter of overcrowded hospital emergency departments or floods could also focus minds on the need to invest in public services.

Mr Kenny is known for his optimism - and he certainly has experience weathering an economic storm. He may be determined to press ahead with promises, but there could well be very tough decisions to be made in the new year.

Brexit could still be 'the Grinch' that steals Budget 2018's USC cuts.

Irish Independent

Today's news headlines, directly to your inbox every morning.

Don't Miss