That old chestnut: it’s the economy, stupid

We like to feel that we’re special, that in Ireland things run differently because we aren’t like other countries. We’re a little better at some things. Our welcomes are more welcomey. Our smiles are broader. Our grass is greener. Even our booms are boomier and our busts are, ahem, bustier. The ould sod is a special place.

But it just ain’t so. We are not unique or special, and when it comes to voting patterns, Irish people confirm the old adage that it’s the economy, stupid. The economy is on the up, and voters are responding to this increased economic growth by appearing to prefer the incumbent government who will naturally enough claim they created the conditions for that growth.

By now, a very large academic literature has documented this simple fact: when there’s a bit of growth, particularly in people’s disposable incomes, the incumbent’s fortunes rise. And the growth needs to be for about nine to 12 months before a general election to secure a re-election.

Irish people, despite evidently being the nicest, smartest and best dancers in the world, just aren’t that different when it comes to voting. They vote with their wallets.

This in the month of the interim report on policing by Mr Justice Nial Fennelly, the issuance of a second batch of Irish Water bills, the return of the Dáil; next month will see the budget and the finance bill, which will focus minds on what kind of government the people wish to see returned.

Last week, the CSO released its quarterly statistics covering the second three months of 2015. We saw an increase in personal consumption of 2.8 per cent as compared with the same quarter last year. We saw an increase in capital investment of 34 per cent over the same period. Total domestic demand rose by 3.5 per cent. Overall gross domestic product grew by almost 2 per cent.

With employment levels rising and unemployment levels falling, all of a sudden the Irish economy isn’t just the comeback kid – it’s the stayback kid of eurozone economies.

Despite everything, despite the austerity and the fiscal stains left by Anglo Irish Bank and Irish Nationwide, despite the mess caused by Irish Water and despite the persistent problems associated with policing across the 32 counties, the government’s fortunes are turning up. Why?

I’ve said it already: when there’s a bit of growth, particularly in people’s disposable incomes, the incumbent’s fortunes rise. And there’s a bit of growth now.

According to the latest Red C poll for this newspaper, support for Fine Gael is up to 28 per cent in September 2015, nowhere near its 36 per cent support level in the 2011 general election, but moving in the right direction, and crucially shrugging off the Irish Water-induced slump of 2014. Labour’s fortunes have also taken a turn up, at 10 per cent. Not quite a ‘Burton Bounce’, but enough of a positive to go into the autumn season with a spring in their step. Combined, without any overt campaigning and without the feelgood factor of a budget behind them, the coalition are on a rather respectable 38 per cent.

Over 67 per cent of those surveyed think the country is generally on the right track. When asked the same question in December 2014, only 54 per cent thought the country was on the right track. That’s a large change, in line with large changes in the fortunes of the country. One issue the coalition will surely want to address is that 62 per cent felt they didn’t see a recovery in their personal situation. The budget will surely change that with taxation measures and spending within a fiscal envelope of around €1.2 billion to €1.5 billion.

As I wrote in this column some months ago, expect to hear the phrase “stability and security” repeated by government parties until you hear it in your dreams. Never mind five-point plans, for the 2016 campaign there’s only one point: this government delivered stability and security. End of.

The clear threat to the coalition being returned in some form, perhaps with an independent grouping making up the numbers, is Sinn Féin, currently experiencing a bit of a dip from March 2014 when they were polling in the early 20s to today where they are polling around 16 per cent.

Expect an inevitable barrage of comparisons between Sinn Féin and Greece’s Syriza, between Sinn Féin’s performance in Europe, where they voted for water charges while opposing them here, and between Sinn Féin’s performance in government in the North versus its role in opposition in the South.

Ultimately, Sinn Féin’s moment may have passed as austerity, and its consequences, seep away beneath a very, very thin veneer of relatively robust economic growth.

Electoral bounces follow economic bounces. Increases in consumption, government spending, net exports and particularly residential investment all play a role in securing large cumulative changes in the fortunes of the economy. We are seeing these in spades across every measure of the economy now, and the growth is not confined solely to the Dublin conurbation, which will be a huge relief to rural TDs who are scared the changes in the fortunes of dairy farmers and other agribusinesses will harm their own electoral prospects.

Ultimately, Ireland is a small open economy which has large positive and negative risks to deal with in the short and medium term. The possible implosion of the power sharing institutions will sap vitality from Ireland’s recovery. The world economy is worrying about China’s stumbling growth rates, while the eurozone is still struggling to get out of its deflationary spiral. And, of course, the threat of Brexit is ever-present.

None of these will figure prominently in the run-up to the election. Not one of the long-term risks (either positive or negative) will be looked at. Everything will be couched in terms of changes in disposable incomes for taxpayers over the last 12 months. We wouldn’t have it any other way. And neither would the government, whose fortunes rise and fall with the movement of a single number.