ROLL up, roll up, for the prosperity auction. Opening bids are being taken at £1.5 billion, the halving of unemployment, better education, a crime crackdown and shorter hospital waiting lists. And all, of course, while remaining financially responsible and preparing the economy for monetary union.
The good news for the politicians is that they can promise a lot without being accused of being irresponsible. This is because strong economic growth is expected to continue. Both the Economic and Social Research Institute and the Organisation for Economic CoOperation and Development have predicted strong growth will continue to 2000 and beyond.
Never mind that long term economic forecasting is as risky as picking a Grand National winner. The prospects of further strong growth have allowed the parties to lay out ambitious tax cutting plans for the next five years. For politicians, prosperity is painless, allowing them to offer goodies to the electorate and promise buoyancy will pay the bills. In 1987, the debate was about how deep health service cuts needed to be to restore order to public finances. Ten years on, things could not be more different.
Now the debate is about how to spread the fruits of growth. Politicians realise many taxpayers are sceptical, to say the least, about claims of the economic boom and the "Celtic Tiger" and still feel the State takes far too much out of their paypacket.
They also know that some 7 per cent of the labour force have been out of work for more than one year and are not sharing in the boom. Much of the debate will centre on these issues. But it will also revolve around who is bestplaced to maintain the recent strong economic performance. The electorate may look more for a safe pair of hands than for any dramatic new policy approaches.
So far, much of the argument has surrounded taxation. All the parties are offering around £1.5 billion in tax reductions over five years - or about £300 million a year. This would roughly mean reductions on a par with those introduced in this year's Budget. Where the parties disagree is how best to spend this money on tax reductions.
It would be a mistake to overemphasise the differences. The main parties agree that much of the fruits of growth should be directed to cutting the tax burden. The plans being put forward all propose that by the end of the five years the vast bulk of taxpayers should only be paying at the standard income tax rate. And they all plan to give something to all taxpayers through either reducing income tax rates, increasing allowances or reforming the PRSI system and the 2.25 per cent health and employment levies.
There are important differences. For example, the Progressive Democrat plan to cut the top rate to 40 per cent is a part of their package which will clearly benefit the better off. Meanwhile, the Coalition parties are promising significant increases in personal income tax allowances. This would make less income liable to tax and offers greater proportional benefit to tower earners, although still giving larger gains in terms of cash to those on the higher rate.
Fianna Fail and Fine Gael, in particular, have aimed their plans directly at the middle ground. They differ a little. For single earners, for example, the Fine Gael plan offers the greatest gains for those on around £15,000, while the gains from the Fianna Fail package peak, as a proportion of total income, at around £20,000. But such differences are too obscure for heated election debate, particularly as voters will realise that fiveyear plans are bound to change over such a long period in office.
Control of public spending is also becoming an issue. Fianna Fail and the PDs have similar approaches, proposing a much tighter control on day to day spending. Fianna Fail is proposing a 4 per cent limit on overall spending growth, for example, compared to a 6 per cent increase seen in recent years.
The Coalition partners have not yet been as specific in terms of spending targets. Fine Gael is promising to eliminate borrowing which constrains spending. Labour is likely to argue at today's manifesto launch that higher spending is needed in some areas to ensure everyone shares in economic growth. Democratic Left has also proposed a new programme aimed at the long term unemployed and is likely to propose further measures aimed at this group in its manifesto tomorrow.
In terms of spreading the fruits of growth, the rate at which spending increases is not the only issue. After all, the Coalition will plead that much of the increase in spending in its term has gone to the disadvantaged, and some of it has. But the main pressure on spending in recent years has been the relentless rise in public sector pay. The quality of public spending is important, as well as its quantity, particularly when it comes to areas such as tackling disadvantage or improving the health and education services.
With many electoral promises likely to be discounted, much will come down to whom the voters trust to maintain the strong economic conditions and distribute its fruits. Because the most effective way of spreading the benefits of prosperity around is job creation, with the much vaunted "1,000 jobs a week" coming on stream over the past couple of years, providing benefits to many families and almost ending involuntary emigration.
Fianna Fail is already pointing out that it was policies introduced in 1987 when it was in government which laid the foundation for the economic turnaround. Meanwhile, the Coalition partners will trumpet the recent strong economic performance under their stewardship and the very strong pace of job creation in areas such as electronics and services.
The reality is that whichever comes to power will find its hands firmly tied by the Maastricht Treaty and the move to monetary union. In many ways, Irish economic policy is now on autopilot, with little flexibility on interest rate trends and a limit set on the level of Exchequer borrowing.
Whatever combination of parties forms the next government will hope that, within these constraints, continued strong economic growth of 5 per cent or more will still leave scope for sizeable tax reductions and further public spending increases. A recent analysis by Davy stockbrokers warned that if growth waned, room for flexibility in the Exchequer finances would be greatly circumscribed.
Such thoughts will not worry the politicians, for the next few weeks at least. They will be promising something for everyone in the audience.
