Taking credit for economic miracle

Political analysis: The Progressive Democrats helpfully provided a map for journalists seeking to find the news conference where…

Political analysis:The Progressive Democrats helpfully provided a map for journalists seeking to find the news conference where they launched Sustaining Success, their economic and enterprise policy.

The location they chose was the Dublin Chamber of Commerce, quietly tucked away on Clare Street, but party leader Michael McDowell was anxious to point out that the party was paying for the use of the hall. "There's no free lunch," he said.

The concept of a free lunch was never a central element of PD economic policy. Since its foundation in 1985, it has always been the party of self-help and pulling yourself up by your own boot-straps.

Free lunch? Try Labour, or maybe the Greens if you want the vegetarian option.

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Flanked by Mary Harney and Liz O'Donnell, Mr McDowell was claiming a great deal of the credit on behalf of his party for turning the economic debate around in this country.

When the PDs started up, personal tax rates stood at 35 to 60 per cent and, in a moment of nostalgia, he harked back to the days when the party was condemned as "Thatcherite" for proposing rates of 25 and 40 per cent.

Now, virtually everyone supports a standard rate of 18 per cent and, although there is still some quibbling about the upper rate, nobody is straying far above 40 per cent. We are all Thatcherites now.

So the PDs can claim to have won the argument - but will they win enough votes to be in power after the election?

Despite his party's uncertain prospects, Mr McDowell can still pull the crowds, but some reporters were openly wondering if he had any more tomorrows or was he yesterday's man?

McDowell needs the assistance of a PowerPoint presentation like Luciano Pavarotti needs vocal back-up, but he still insisted on taking the class through the PD version of "Economics for Beginners".

An abundance of charts and graphs was produced to show how the PDs had forced through a low tax regime, thereby generating an economic miracle and ensuring Irish workers and their families kept more of what they earned than their counterparts in just about any other country.

McDowell makes a strong argument that the PDs have acted as a neo-liberal catalyst for transforming the Irish economy from a sluggish under-performer into a lithe athlete constantly bounding to new heights of achievement. But there's no gratitude in politics and elections are not about the past but the future, with a sharp focus on the approach of different parties to key policy issues.

Stamp duty has dominated the debate up to now and, as is his wont, the party leader had his own particular "take" on this issue. Seeking to gain advantage from the uncertainty about the date of implementation for the Fine Gael-Labour proposals, McDowell pledged that, if returned to government, the PDs would have their stamp duty reforms enacted into legislation before the new Dáil rose for the summer recess.

This inevitably raised the question as to why the party had not done it already. After all, they have been in Government for the past 10 years and McDowell made his original proposal for stamp duty reform last September.

Proving that his barrister's training was not wasted, the PD leader responded that the people were entitled to have their say on this issue.

But hadn't Fianna Fáil, their putative partners in a future government, set their face against changes in stamp duty? McDowell replied that every party had the right to formulate its own policy, but added that there had been "discussions in private" with Minister for Finance Brian Cowen about the matter.

Fine Gael and Labour will doubtless feel aggrieved at being accused by McDowell of creating uncertainty in the housing market with their stamp duty proposals, when it was the PD leader himself who first raised the issue at the party's Malahide "think-in" seven months ago.

Like Fine Gael and Labour, the PDs are pitching strongly for the "parents under pressure" vote, with proposals to ease the burden on families in the commuter belt struggling to pay taxes, mortgages and childcare bills.

There are plans for increasing the payment for children under six years from €1,000 to at least €2,000 per annum; raising child benefit payments in line with the cost of living; greater spending on childcare services; and a year's free preschool education.

Meanwhile, the PDs want the top rate of personal tax reduced to 38 per cent compared with the current 41 per cent rate. This compares with Fianna Fáil's proposal for a 40 per cent rate and the Fine Gael-Labour plan to leave the upper rate untouched. The PD leader made the point yesterday that "it does matter who's in government and it does matter who the partner in government is". It certainly matters to Michael McDowell.