There is no getting past Irish Water, it seems. We are told this is now a crunch issue in the talks about whether Fianna Fáil will support a Fine Gael-led minority government. Unless an "Irish solution" can be found to the Irish Water problem – something seen to adhere to the contradictory election promises of the two parties on the issue – then we are told another general election is in the offing.
Disagreement on Irish Water may yet be the ostensible cause of a general election. But come on. If the two big parties want to strike a wider deal, then they could sort out an agreement on Irish Water in a few hours .
There are two essential issues – what kind of body runs the whole thing, and how is it paid for. Fine Gael wants to maintain Irish Water as a utility – a separate body with its own funding – and maintain water charges. Fianna Fáil favours phasing out Irish Water as it is, giving power back to local authorities co-ordinated by a smaller national "authority". They also want to postpone water charges for a period.
A compromise could be dressed up here which maintains one slimmed down central organisation in charge of the water infrastructure with some agreement of how it would be paid for, which would probably involve the ending of charges as they now exist, or their suspension, or their rolling in as part of residential property tax or whatever.
If the two parties are so afraid of the anti-water lobby that they can’t come up with some plan, then all the signs would be of a arrangement that couldn’t agree anything remotely controversial – and thus wouldn’t last long anyway.
If this deal does not fly, we may be told Irish Water was the crunch point, but there will be more fundamental issues at play. Even standing back from the narrow party political questions facing a deeply damaged Fine Gael and a deeply divided Fianna Fáil, the question is whether anyone is willing to really run with the ball of being in government.
While Irish Water is to some extent a distraction, it also highlights something more fundamental. Large parts of the public have lost faith in the ability of the “system” to raise money and spend it efficiently. The social contract – that we pay tax and benefit from services – is fraying. Rebuilding faith among voters is a huge challenge.
Close on half the population did not pay water charges and this was let slide at the time, and those who did pay will be further annoyed if charges are shelved – and there are no consequences for those who did not cough up.
‘Austerity fatigue’
This boycott was driven in part by “austerity fatigue”. But it also reflects a lack of confidence that a modest charge for water will actually result in a better system. The horrendous mess made of setting up Irish Water, of course, contributed to this. But there is a wider problem facing whoever comes into power – and to an extent also whoever supports them from the opposition benches. In post-crisis
Ireland
, everyone wants more pay, more payments and less tax. There is a complete lack of understanding – or acceptance – of the ongoing constraints facing the public finances, the level of our national debt and the constraints on the next couple of budgets, partly due to EU rules. In terms of tax, public pay and spending, the demands all reflect one theme – the crisis is over, so can we please have our money back. If we are to have a minority Fine Gael government, possibly with a few Independents included, and supported by Fianna Fáil from the opposition benches, it would surely struggle to deal with this pressure cooker of demands. Fine Gael would be looking over its shoulder at Fianna Fáil, who in turn would be caught in the half-way house of some kind of ongoing “support” for what was going on.
The irony is that, if a British exit from the EU can be avoided, there may well be a few years of good growth and resources would be available to ease taxes and increase spending – just not nearly enough to meet the demands being made. Not by a long way.
Underpin our prospects
If a new government managed to make a few of the right calls in the early years, and kept the deficit and debt heading down, then it could actually have decent room for manoeuvre in the second half of a normal five-year term. If it had the courage to divert resources to investment – as opposed to meeting demands for cash now – it could help underpin our prospects for the future.
But in an environment where politicians are afraid to tell people that fixing our water infrastructure will cost us all a few euro, this kind of long-term strategy will not emerge. It is hard to see a minority government supported by a reluctant Fianna Fáil being anything other than a temporary little arrangement, blown in the wind by the demands of the day. Irish Water will be an issue in the talks now under way, for sure, but this is really about an awful lot more.