Tuesday 17 September 2019

Kevin Doyle: 'Blaming the Brits for our woes is easier than accepting our own failings'

Meeting: Paschal Donohoe held talks with Fianna Fáil
Meeting: Paschal Donohoe held talks with Fianna Fáil
Kevin Doyle

Kevin Doyle

Blame the Brits. That was essentially Finance Minister Paschal Donohoe's message as he ruled out tax cuts in next month's Budget.

It's an easy mantra which many in this country will readily subscribe to after events of the past week. But when you scratch the surface a little further, it appears Brexit is only compounding a problem that we created for ourselves.

There was always going to be an economic slowdown at some stage. You don't have to be an economist to figure that one out. Ireland's finances are like long-range weather forecasts: wholly unreliable but a rainy day is never far away.

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For the past few years we have been on the upswing, enjoying our status as the fastest growing economy in Europe. The Government would never admit it, but Ireland has become the poster boy for austerity.

We have enjoyed listening to leaders from other countries note how remarkable our post-crash turnaround was.

That upward trend, fuelled by massive corporation tax takes, looked set to continue for another few years - but the threat of a no-deal Brexit means we must now assume the good times are over.

Taoiseach Leo Varadkar has been definitive in saying we are not heading back to tax hikes and social welfare cuts.

So it seems that for most workers, Budget 2020 will carry very little significance. It will be a 'standstill' Budget while we 'wait and see' what the mad neighbours do next.

Mr Donohoe met with Fianna Fáil's Michael McGrath and Barry Cowen earlier this week to kick-start the process under the Confidence and Supply arrangement. Sources said both sides accept "it's going to be different" this year.

Fianna Fáil had argued over the summer that tax cuts should not be on the table if a disorderly Brexit is. Fine Gael left that option open.

By the time the teams met this week, both assumed tax cuts were out of order.

What happens in the area of welfare will be more difficult. The politicians will want to protect the most vulnerable - but there are differing views on who falls into that category. Is it pensioners, the disabled, lone parents, the unemployed or those paying rip-off rents?

All of this is happening ahead of a general election which is usually where a 'giveaway' budget fits in.

These are strange times and the battle about to be fought by the parties will be over who is more prudent rather than who splashes the cash. By citing Brexit, Fine Gael hopes to avoid the obvious accusation that things are tight because it messed up the children's hospital and broadband projects.

In a devastating assessment, the Irish Fiscal Advisory Council says the Government squandered the good times and "we are back to where we've been in the past".

Of course, that past was brought to us by Fianna Fáil which now proclaims itself whiter than white.

Fine Gael roars that the Opposition party has made €4.35bn spending demands in the past six months and wants to return to power "at all costs".

Blaming the Brits is the easy option because we have plenty of problems at home.

Irish Independent

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