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Warning: beware of politicians' promises

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The Government's strategy seems to be a return to the well worn path of the election promise while simultaneously urging us to hold on for fear of finding something worse

The Government's strategy seems to be a return to the well worn path of the election promise while simultaneously urging us to hold on for fear of finding something worse

Leo Varadkar

Leo Varadkar

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The Government's strategy seems to be a return to the well worn path of the election promise while simultaneously urging us to hold on for fear of finding something worse

In a do-or-die effort, the Government last week embarked on a dual strategy to win the election.

The new mantra, which sounds like it was devised by a firm of political consultants, will be: "Don't risk the recovery".

Richard Bruton, the Jobs Minister said as much last week. "Don't risk it," he said on Newstalk, in his first try-out of the new soundbite.

But, would you risk it for a biscuit?

Last week, we got a taste of the biscuit: State share sale to reduce bank-related national debt; tax relief and subsidies for child-care; reduce or abolish the public-sector pension levy and reverse pay cuts; and to top it all, full employment by 2018.

So the Government's strategy seems to be a return to the well worn path of the election promise while simultaneously urging us to hold on for fear of finding something worse.

After years of slash and burn, it is surely nice for it to offer a few sweeteners for a change; so on a human level it is difficult to be too critical.

But it would be remiss not to call it as it is: several election promises in the making which may not amount to a hill of beans.

In all, it has been estimated that the Government has made promises to the tune of €3.5bn in the last few weeks.

That's is more than enough to grey the hair of your average academic economist who must be concerned about the return of deflation and a potential softening of the economic recovery.

Seamus Coffey, a lecturer in economics at University College Cork, told the Sunday Independent he believed it was not possible to spend an extra €3.5bn and still meet the target to bring the budget deficit under 3pc of the value of the economy.

Currently, the target as laid out in Budget 2015 is 2.7pc: "You'd need phenomenal growth in tax revenue to cover that," Mr Coffey said. "If they plan to spend €3.5bn more than they set out in the budget, we will not hit the deficit target. We would be way above it."

Regardless, the Coalition is almost good to go. The Agriculture Minister, Simon Coveney, said as much last week.

He told the Fine Gael parliamentary party that the election campaign plan was already in place and the party's manifesto would be ready by the summer.

So there may be an election in May, after the spring statement and before voters head off on holiday, or after the Budget in October, or a few months later into next year.

At this stage, it doesn't really matter when the election is called, other than to suspect it will be sooner rather than later if Fine Gael and Labour continue to rise in the opinion polls.

You can be sure: "Don't risk it" will form a central part of the Government parties' election campaigns.

This time around, however, voters will be well advised to read the small print of each manifesto, and not just the footnote which conditions all such promises on economic circumstances at the time.

And not just the promises made by Fine Gael and Labour for that matter; but all election promises of all the parties, and alliances, who will soon be clamouring for your vote.

Last week, for example, the Health Minister made a valid point in relation to what will undoubtedly be a central plank of the Sinn Fein campaign.

If Fine Gael's election posters urge voters: "Don't risk it", then Sinn Fein's will promise the abolition of water charges and property tax.

To make up the shortfall, among other things, the party has and will continue to promise a wealth tax, which has populist appeal to all but those administrations which have already tried it.

Among Sinn Fein's proposals are the introduction of a third rate of tax of 48pc on income over €100,000; the introduction of a 1pc wealth tax on assets valued at over €1m; the standardisation of all discretionary tax reliefs; the capping of public-sector salaries at €100,000; increases of 10pc in both capital gains and capital acquisitions taxes.

The point made by Leo Varadkar was that, at present, the entry pay level for hospital consultants working exclusively in a public hospital is set at €116,000.

At the moment, though, there are 300 consultant vacancies, with many young consultants choosing to work abroad for higher pay rather than put to use their highly specialised skills at home.

Under new proposals, consultants' pay would increase, over time, to a maximum of €175,000, which seems a reasonable sum for somebody to whom you entrust your health, well-being and life.

But tax a large proportion of that proposed new salary at 48pc - well, let's just say, it's doubtful those vacancies will be filled.

The number of vacancies, along with restrictive work practices, is a contributory factor in the chaos which has gripped hospital emergency departments since the New Year.

So the Sinn Fein promise, and that of the other populists on the far Left, to go after so-called wealth will have knock-on effects - and not just in the health service.

That said, it is not only the promises, or threats, of the 'loony' Left that should be closely examined as the election moves closer.

If voters have learned anything in recent years it is to rigorously question and examine the consequences of all such promises.

For example, last week the Finance Minister, Michael Noonan, was reported to have said he was confident the State would recoup the €29bn to bail out Allied Irish Bank, Bank of Ireland and the PTSB.

However, Mr Coffey has pointed out that what Mr Noonan really expressed was confidence that, over time, the State will, at a minimum, fully recover the funds "this Government" has invested in those banks, which is about €17bn, which leaves a shortfall of €10bn to €12bn.

In an interesting aside, Mr Noonan was also reported to have expressed broad support for the prospect of a European debt conference, as demanded by the far-Left favourite to win the forthcoming election in Greece.

That was enough to make the Foreign Affairs Minister's hair even greyer; He must have been anxious that Mr Noonan would not be seen to take sides in the election in Greece.

Not to mention the Fine Gael parliamentary party, many of whose members blanched at reports that the party's ace in the hole seemed to have advocated the policies of the far-Left.

For the record, the Department of Finance says it would not be "appropriate" to discuss the Finance Minister's reported views while the election in Greece is on-going.

For his part, Mr Noonan is believed to be of the view that he was misinterpreted.

No doubt these matters will be, shall we say, ironed out by the time Mr Coveney is ready to sign off on Fine Gael's manifesto this summer.

The other parties and alliances, old and new, would also be advised to have their manifestos ready by then too; not only in place, however, but wide open to the cynicism of voters who have heard it all before and bear the wounds to prove it.

Sunday Independent