Monday 19 August 2019

Door wide open for FG to be taxpayer's champion

On Tuesday, the State tore up its social contract with the taxpayers of Ireland. Every taxpayer in the country was party to that contract even if they didn't know it.

The contract works as follows: we agree to hand over a portion of our money to the State and in return for our money, the State agrees to provide us with particular services that we might not be able to afford on our own; for example, education or healthcare. We also agree to carry those who can't pay tax, but only up to a point. We don't like free-loaders, for instance.

The State also agrees to provide these services efficiently and to give value for money. In the last few years, the State has signally failed to uphold its side of the bargain because it has failed to give us value for our money and it has failed to provide the promised services efficiently. For this reason, we should be as angry with the State as with the banks.

On Tuesday, instead of cutting public spending as deeply as it should have, the State, in the form of Fianna Fail, decided to mug the taxpayer instead. Instead of tackling waste, it is taxing and borrowing and sending us to ruination.

Let's say a few more things about our contract with the State: as the left would have it, the money we earn belongs to the State first, and us second. It doesn't. Our money belongs to us first. We have a right to what we earn. The State has to justify taxing us; we don't have to justify not being taxed.

Nor is it immoral to want to hold on to your money. If you earned it honestly, you are entitled to it. No one else is entitled to it. The one and only reason we give our money to the State is because we think it is a good idea to have a State. At an absolute minimum, we want someone to guarantee law and order.

The reason the State has grown so much in recent years is because we also believe it should provide the aforementioned health and education services and because we have an obligation to help those in need and feel the welfare state is a good way to do that, although the welfare state can be counter-productive.

But the State in Ireland has grown too far, too fast. In the four years to 2008, State spending went from roughly €34bn to €55bn. A lot of that money has been wasted. If anything is immoral, that is. It is immoral that the State took so much money from us in direct and indirect tax and spent it so badly, or to pay off the 'social partners', or to buy votes.

It is now time that the taxpayers found a champion, someone to represent their interests properly and to ensure that the State honours its side of the contract properly. Who is going to fit the bill?

Fianna Fail can't because it presided over the huge expansion in wasteful spending. Labour can't either. In theory, and even in practice, Labour might deliver a more efficient State, but it also favours higher taxes. Post-Pat Rabbitte, it has become, once again, a tax and spend party. And proudly so.

So of the three main parties, that leaves Fine Gael. Its conference last weekend was a step in the right direction. Richard Bruton declared that we can't tax our way out of recession, and he's right. Enda Kenny also had a good conference. (Please give Lucinda Creighton a place on the front bench.)

Fine Gael's pre-Budget submission said that the Government should emphasise spending cuts over tax increases and that was a good move as well.

But now Fine Gael needs to up the ante. It can't worry about driving Labour into the arms of Fianna Fail. It needs to put its foot hard on the accelerator and try to become not only the biggest party in the Dail, but one that can get into Government the way Fianna Fail does, that is, with the smaller parties and independents.

It has to free itself of Labour. Labour holds it back. It stops Fine Gael from being Fine Gael and prevents it from being true to its instincts which are fiscally conservative, instincts that Garret FitzGerald tried to eliminate.

This week's Budget made life harder for Labour because it introduced more or less the sort of tax rises Labour wants, and Brian Lenihan now threatens to make them permanent.

But the Budget threw the door wide open for Fine Gael. It positively invited the party to become the champion of taxpayers who are now being mugged to fund a bloated, inefficient State. Fine Gael needs to step through the door and take full advantage.

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