A pre-budget Leo can’t help it: he’s just hardwired to please us all
Are you ready for the Fine Gael budget? You have to hand it to Leo. Last Wednesday, fresh from his holiday, the Tánaiste and Minister for Enterprise saturated Ireland’s airwaves, sharing glad tidings about what would be in Budget 2023.
There was the usual shortage of solid news in August. Fianna Fáil ministers were on holiday. Enter Leo — never yet a minister for finance, but Taoiseach-in-waiting all the same. Leo filled the vacuum.
Of course, he added a caveat to all the kites he has been flying from Government Buildings: “Nothing has been decided yet, but…”
Paschal’s department had just released its Tax Strategy Group report, handing Leo a hook on which to hang the giveaway Fine Gael budget. Leo gatecrashed Paschal’s party, stealing the limelight, talking up the September 27 budget — despite the fact that Paschal alone had given Wednesday’s press conference on the topic.
Leo’s taxation totem pole needed debunking. Cue Paschal
Thursday’s papers were full of Leo. The Irish Times gave him top billing on page one. He revealed the bones of a possible budget under the helpful headline ‘Coalition pledges tax package to benefit of most workers’.
Paschal, the real Minister for Finance, was given a minor role, trotting in behind Leo. On page two, the same paper again gave Leo the lead story — ‘Varadkar promises budget help for tenants’, together with a picture and a positive spin. Leo was skilfully feeding a media beast starved of fodder.
On page 17 meanwhile there was a huge soft-focus picture of Leo with the chief executive of Manna Aero at that company’s announcement of its expansion plans. A run-of-the-mill story: dull but good news.
Where was Fianna Fáil in the budget picture? The Times managed to allot Fianna Fáil the final, very short, paragraph at the bottom of page one. And that was that. Otherwise, it was a Leofest.
The Irish Independent gave Donohoe the coverage he merited. Fianna Fáil voices were again missing in action. In today’s Sunday Independent, Fianna Fáil’s Minister for Public Expenditure and Reform Michael McGrath is making up lost ground in an interview with Philip Ryan.
Leo’s coup was vintage Varadkar. He was shovelling out good news by the barrow full. Wednesday evening’s headline in The Journal said it all: ‘Tax breaks for landlords a “good idea”, but renters should get concessions too says Varadkar’.
Leo has to please everybody, even opposites. Behold Leo, the landlords’ hero, the tenants’ hero, the hero of the squeezed middle, the dispenser of increased welfare payments. No one will be left out of his largesse.
On Thursday’s Morning Ireland, Paschal Donohoe surfaced to inject a dose of sanity into the spending spree. Paschal was forced to puncture his boss’s balloon. Very gently. Leo’s taxation totem pole needed debunking.
The Tánaiste, a long-time advocate of a 30pc income tax rate — his gift to the middle-class Fine Gael base — needed to be helped off his pedestal. Paschal’s mandarins had already given the Tánaiste a nudge, making it clear that a 30pc rate would only benefit one million people, while other measures costing the same amount could benefit multiples of that.
The 30pc proposal was, as Leo knew, only an option. Paschal the Prudent torpedoed it by reminding the interviewer that Leo himself had conceded that “nothing is decided”.
Paschal had put his boss back in his box, but also managed to produce a face-saver, by suggesting that such structural tax changes would be difficult for payroll systems.
Paschal knew that at a time of rocketing living costs, no party can be seen to favour the better-off over the needy. The opposition would convincingly paint a 30pc income tax rate as just a bit more of Leo’s weakness for those who “get up early in the morning”.
It takes courage to stand up to the demands of party colleagues
Paschal is one of the few who is not carried away by the large sums floating around in the Exchequer for Budget 2023. He prefers to use the money to make one-off payments to those in financial difficulties, ahead of making permanent commitments to unsustainable annual payments, as advocated by Leo.
Paschal is acutely aware of the transient nature of the vast windfall tax sums received from multinationals in recent years. Some of his colleagues want Paschal to spend them as though they will continue forever. He wants to spend them on one-off welfare payments, fuel subsidies, or other relief measures for those suffering crippling bills as a consequence of the shock spike in the cost of living.
He even wants to save a few bob. He recognises the need to give people a bigger take-home package, but intends to do it through changing the tax bands and tax credits, reaching many more hard-pressed citizens than Leo’s chosen squeezed middle.
It takes courage to stand up to the demands of party colleagues. Paschal is prepared to resist these pressures — but Leo is in the capitulation business. It probably suits the Tánaiste to champion tax changes that favour the Fine Gael heartlands, and then blame Paschal and his mandarins for blocking them.
Perhaps Fianna Fáil had decided to sit back and watch the budget show? On Thursday, Fianna Fáil minister of state Robert Troy appeared on RTÉ’s Today with Claire Byrne to argue with Sinn Féin’s Louise O’Reilly about the merits of maintaining special tax arrangements for well-paid multinational employees.
O’Reilly was kicking at an open goal, but Troy put up a robust defence of the need to protect Foreign Direct Investment and incentivise its employees.
Where would we be without the multinationals, he asked? Shades of Paschal’s willingness to take one for the team in the national interest.
But where were Troy’s colleagues? Were they playing holiday politics, ducking and diving and leaving the gap wide open for Leo and Fine Gael to make hay while Micheál Martin was on holiday?
On Thursday, Leo surrendered.
Under questioning in Roscommon, he gave ground, admitting that a new 30pc rate would have to be accompanied by relief for people with incomes outside the proposed threshold. A “universal approach” would be needed. Decoded, Fine Gael’s middle-class base could not jump the queue.
Game set and match to Paschal.
At the end of the week — at least before McGrath turned up in this paper — Budget 2023 had been hijacked as Fine Gael’s masterplan. A giveaway budget has many fathers, but only one was on centre stage last week.