Citing housing, the cost of living and a united Ireland as its political priorities, and with a new emphasis on climate action, Sinn Féin on Wednesday unveiled its alternative budget, ahead of the real thing next week.
It was one of three political groups to publish budget documents today – the Social Democrats (minus unwell leader Holly Cairns) and the Rural Independent group marched out on to the Dáil plinth this morning in quick succession. Labour will be out on Thursday.
But neither Labour nor the Social Democrats nor the Independents will lead the next government – Sinn Féin might well do so. As last week’s Irish Times/Ipsos opinion poll attested, the party is on course to be the biggest party in the next Dáil, perhaps by a large margin. It may well be writing the next budget. So what it says matters more than ever.
The document launched by finance spokesman Pearse Doherty in the constituency of Mary Lou McDonald today is comprehensive and painstakingly costed, its numerous small-bore promises (€300,000 promised to fund agricultural shows; €200,000 to increase funding to Defence Forces veterans’ associations; and so on) bearing the hallmark of an extensive listening exercise and an open door to lobby groups.
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In its macro impact, however, it is a centre-left manifesto, with big spending increases, tax breaks for middle-income earners, plenty of populist (and popular) giveaways, paid for by Ireland’s still humming economy and by taxes on the better-off, on business and on – naturally – the banks.
Giveaways in tax cuts (€766 million) and mortgage interest relief (€300 million) and concessions to renters (€200 million) will be paid for by the 3 per cent “solidarity tax” on incomes above €140,000 a year, removing tax credits for salaries above €100,000, and the increased bank levy. Other taxes on wealth include restrictions on tax relief for larger pensions, an increase in the second home charge and an increase in stamp duty for more expensive houses and for commercial property transactions. These will hurt, for sure – but they won’t directly hurt most people.
In summary, it takes resources away from the better-off parts of Irish society and spends them on the less well-off – but also on those in the middle. It is a budget calculated to appeal to middle ground voters – but also not to scare them off.
The rhetorical focus on climate is interesting – suggesting that Sinn Féin believes it will be an important issue for many of the younger voters it has attracted in recent years. But it will be criticised by environmental groups for promising to freeze the carbon tax – the firmest promise in a suite of measures that do not seem very worked out.
It has often been remarked that the centre of gravity in Irish politics has moved to the left over the past two decades, a process that happened first slowly and then quickly after the financial crash. The process seems to have been further boosted by Covid, when the State’s reach expanded enormously. Political survivors that they are, Fine Gael and Fianna Fáil moved leftwards with the prevailing political currents; and that process seems set to continue with the forthcoming budget. If – as is generally expected – the entire budget day package runs at about €10 billion, then just more than a tenth of that figure will be allocated to tax cuts. Judged by its budgets, this is hardly a rabidly right-wing government.
All the same, Sinn Féin’s policy platform is distinctively and identifiably to the left of the current Government, and this alternative budget underlines that. That is its essential message.
But the days when they advocated nationalisations, withdrawal from the EU, or when Gerry Adams would tell Ireland’s lenders to take their money and buzz off – they are long gone. Economically, Sinn Féin is moving to the governing mainstream. Politically, the party is attempting the difficult but not impossible balancing act of convincing people that the things they don’t like (housing, the health service) will change, while the things that they like (one of the strongest economies in the world, high living standards) won’t change. Today’s budget document sought to delicately tread that line.
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What of the others? The Social Democrats promised €16 billion in extra spending – divided between using some of the surplus for a climate transformation fund, one-off measures and €8 billion in recurring spending measures. The extra spending would be financed by a range of tax increases, including a wealth tax, a third rate of income tax, increases in capital gains and inheritance tax, and other tax increases.
If the Social Democrats were taxing and spending, the Rural Independent group wants a whopper of a tax cut – the abolition of the USC. This would certainly be popular – it would also blow a massive hole in the State’s finances. The tyranny of the Dáil numbers means that neither plan stands much chance of being implemented.
