INSIDE POLITICS:Opposition, Greens and Independents sharpen their swords as fiscal realities loom into focus ahead of budget 2011, writes STEPHEN COLLINS
THE ONLY important political question now is whether the Government has the capacity to frame the kind of budget necessary to stop the country sliding over the edge of the economic abyss and into the hands of forces completely outside our control.
At one level, the row over the Taoiseach's Morning Irelandinterview was a complete distraction, but at another it was a worrying sign that the country is bereft of the kind of inspirational leadership it so urgently needs. The Government was always going to have a huge credibility problem in getting the public to support its strategy to tackle the economic crisis, given its own role in the country's downfall. Its erratic performance over the past two years hasn't helped.
While the Coalition finally got the courage to cut spending in the shape of public pay, its refusal to implement the McCarthy report, the feet-dragging on necessary reforms like the introduction of a property tax and the concession of the Croke Park agreement to the public sector unions gave the impression things were not that bad after all.
Now the electorate is feeling puzzled and depressed that two years after the crisis began it is suddenly looking even more serious than previously believed. The international financial markets, which are funding our spending habits, are beginning to wonder whether we will ever be able to pay them back, and that is pushing up our interest rates.
Mind you, the performance of the Opposition parties, the social partners and the various vested interest groups that influence public policy hasn’t helped either. All of them have refused to focus on the central issue, which is not the banks, bad and all as they are, but the unsustainable level of Government borrowing.
Former taoiseach John Bruton made a pertinent speech on the subject last week, pointing out that while the net liability of the banks will be a huge figure, it will be a finite one. By contrast, the gap between spending and revenue, which is running at 10 per cent of our GDP, is not a one-off figure and is inexorably multiplying the total amount we owe. “I would prefer if the energies of our lively economic ‘commentariat’ were devoted as much to how we can bridge that recurring gap as they are to the one-off banking liability,” said Bruton.
The ability of the Coalition to respond to the deteriorating situation with a coherent strategy, involving more than €3 billion in spending cuts and tax increases, and to then convince the public to accept the package, will be an enormous challenge. The Opposition parties will make it as difficult as possible for the Government. While Fine Gael and Labour accept the €3 billion figure in theory, going on previous performance they will be critical of almost every cut and tax increase that will make up the package.
Politically, they are probably right to assume the electorate wouldn’t thank them for spelling out what they would do instead, but it will make the problem even harder to solve.
That is why the sooner an election takes place the better. A new government with a decisive mandate would have a better chance of devising the kind of measures that are necessary, and of facing down the range of vested interests that will inevitably mobilise in response.
The difficulty is that unless the electorate is educated about the kind of choices that lie ahead, any alternative government could quickly find itself mired in confrontation with groups which have a naive belief that the country’s problems will be conjured away once Fianna Fáil is out of office.
The really worrying thing is that that belief might even be shared by many Labour and Fine Gael TDs. While it is difficult to predict precisely when the election will take place, it is hard to see the Dáil running full term until the summer of 2012, given the pressure of political and economic events.
The latest straw in the wind was the decision of Galway West Independent Noel Grealish to call for an immediate election. The former PD has been a solid supporter of the Coalition up to now and, while he carefully refrained from saying whether or not he would vote against the Government in the weeks ahead, he is clearly signalling to the electorate of Galway that he no longer wants to be associated with the actions of the Government he has backed for three years.
Michael Lowry and Jackie Healy Rae moved strategically to keep Brian Cowen in place as Taoiseach, but that is no guarantee of their long-term support. Like Grealish, they will want to contest the election on an anti-Fianna Fáil ticket and, after voting against the Stag Hunting Bill before the summer, have positioned themselves to pull the plug when they deem it to be to their best advantage.
All of that makes the timing of the three byelections crucial. Fianna Fáil will certainly lose two and probably all three, and the arrival of three more anti-Government TDs will make its position in the Dáil more precarious. That in turn will damage its ability to govern. Whatever about getting a tough budget through in December, the prospect of getting an equally tough measure passed at the end of next year is slight.
The Greens will have important choices to make in the coming months. The party has proved far more rock solid in office with Fianna Fáil than most had expected. Some of this is due to the fact that Cowen has become ever more dependent on the Greens, and therefore more amenable to their agenda. Still, the party will have to make a careful judgment about whether or not it is prepared to go down with the ship or look for an issue that might give it a lifeboat.
The Opposition parties are currently hoping and planning for a spring election, after the byelections. They would secretly like to see the Coalition implementing the toughest possible package in December, to cement its unpopularity and save them the hassle of having to do it when they come to power themselves. All of them – Government, Opposition and Independents – are now at the mercy of events.