The fiscal backdrop to the general election is probably more favourable than it has been for any previous campaign. And the parties are making commitments on the basis that the strong trends in the public finances will continue.
For a reality check, they would be advised to read through the general election manifesto published recently by the American Chamber of Commerce Ireland. The State’s finances are significantly supported by the corporate taxes paid by the US multinationals, which the chamber represents, and the income tax paid by their staff. The manifesto is a long list of what needs to be done to ensure the economy remains on a sustainable footing.
Government policy should not be designed in response to business lobby groups. But as it happens the key issues it identifies are also of vital concern more widely and are essential to social and economic progress.
Obviously, housing is a priority. But the chamber also calls for investment in physical infrastructure such as energy, water, sewage, and transport, as well as the digital infrastructure. And strategic investment in education and skills.
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What happens at an international level is, to a large extent, outside the control of the next government. And there is no doubt that the election of Donald Trump does bring new concerns.
However, threats to investment because of domestic shortcomings are caused by internal policy failures. There are plans in the pre-election manifestos to put fiscal resources to good use, particularly in housing. But there is a notable absence of detail about addressing wider physical and digital infrastructure problems and, more importantly ,realistic timeframes for doing this.
Ireland’s healthy fiscal position relies in large part on foreign direct investment. If these resources are not used to ensure the future sustainability of this model, it would be a serious error.
There are wider reasons to do so, too. The slow provision of electricity, water and wastewater is a vital issue delaying housing and endangering the provision of proper services. In turn, developing wind energy and the associated infrastructure is central to the climate transition.
The main parties say they are committed to investment in these areas and have made a variety of proposals to reorganise the public services to deliver. Fine Gael says it would create a new infrastructure department and Fianna Fáil wants to give responsibility to the National Treasury Management Agency for major projects.
These proposals are worth examining. But whatever structure is chosen, the State apparatus needs new planning and engineering skills and a much improved method of overseeing and coordinating delivery. And all this needs focus – something entirely absent in most of the manifestos.