Thursday 21 November 2019

Shane Coleman: After a winter of discontent, the bloody autumn of the long knives

A BRUTALLY tough Budget, sparking fears of a backbench revolt. Speculation about a cabinet reshuffle in the autumn. Governments change but politics, it seems, remains the same.

Time will tell whether Enda Kenny will ultimately embark on the kind of radical cabinet reshuffle that Brian Cowen was urged to do, but never quite managed.

Cabinet reshuffles rarely succeed in improving the image of a government. History, though, is littered with examples of them going spectacularly wrong.

A long run into a reshuffle may help keep ambitious backbenchers in line for a bit.

But, given some of the tensions between Fine Gael and Labour, there must be a doubt whether the instability and uncertainty created by a reshuffle is in the Government's best interests.

And, with the Government so dominated by the four-man Economic Management Council, it's also questionable what difference a change to the wider Cabinet would make (unless one of the two finance ministers was moved).

Ultimately, of course, voters are more interested in the decisions made by the Cabinet rather than who sits around the table. In that regard, there is an unmistakable sense that both government parties, particularly Labour, crossed the Rubicon last Wednesday.

Brian Lenihan oversaw much bigger Budget adjustments, but none of them felt as tough as this one.

After five hairshirt budgets, all the "easy" options were gone. But it was also the range of ways people were hit -- PRSI, child benefit, wine, car tax, Dirt, property tax etc etc.

The pain may have been unavoidable, but that doesn't make it more palatable. No longer is the Coalition on the side of angels. And, given the current volatility of the electorate, the political consequences could be massive.

A considerable part of the problem is that, when in opposition, the two parties shamelessly milked the public outrage at the austerity policies of Fianna Fail and the Greens. Now they are reaping in government what they sowed in opposition.

For three years, Fine Gael and Labour opposed all cuts and tax increases and gave every impression that there was an easier, less painful way to plug the gaping hole in the public finances.

Even when it was obvious that Fianna Fail was heading for wipeout, the promises didn't stop.

Having built up such unrealistic expectations, it's a moot point whether or not the electorate would have been more amenable to such a tough Budget if the Coalition had gone for it in year one.

The suspicion is that the Government should have done so, laying the blame for its severity at Fianna Fail's door. But Fine Gael and Labour, reluctant to sacrifice political popularity, wanted to put off the evil day as long as possible.

That's not to say the first 20 months in government was a cake walk. Labour, in particular, has taken a hit in the polls.

However, the expectation is that things are going to get worse, a lot worse, on that front.

For Labour, the cuts in some of the secondary social welfare benefits, the reduction in child benefit and regressive change to PRSI will certainly cost it support.

Fine Gael is inevitably going to take a hit from the property tax, particularly in Dublin.

The next opinion poll will be fascinating. It's difficult to see anything other than a fall in support for both parties. And it will be interesting to see how the Coalition partners, so used to being on the front-foot, will cope with that.

And there are other causes for concern. The disappointing November tax returns indicate economic recovery remains a fair bit off. It also remains to be seen whether health can deliver the promised massive savings next year or if the Government could be into mini-budget territory.

It would be foolish to suggest all is anywhere near lost for the Coalition: the Cabinet showed steel in seeing through a horrendous Budget, while a deal on the promissory notes is attainable. Remember as well, the two parties would need to drop more than 30 seats in the next election to lose power.

It's clear that, having alienated so many voters with the Budget, the Coalition will need a new positive narrative.

Exiting the bailout programme at the end of next year would give it such a narrative -- 'the tough medicine worked in curing the patient'. The two parties would inevitably reap the political reward.

But the reverse equally holds true. Failure to return to the markets in 12 months would cause voters to question what all the pain was for.

Increasingly, it seems the Coalition's political fortunes will be tied to the State's success or failure in exiting the bailout programme.

The problem is that so much depends on events in the wider eurozone. Enda Kenny and Eamon Gilmore can decide who sits around the cabinet table, but it seems the fate of their Coalition could be determined by factors almost totally outside their control.

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

Don't Miss