So we have a deal. The deal commits us to an extra €3.2 billion of extra spending between now and 2021 – roughly the amount the Irish Fiscal Advisory Council argued for before the election – as well as introducing sugar taxes, tobacco taxes, and phasing out the universal service charge.
Is this enough to solve the three big problems we have – housing, health, and education? No, it’s not.
It it enough to purchase the loyalty of enough TDs to get the minority government over the line? Yes, it is.
And that’s what matters most, now.
Programmes for government (or partnership, in this case) come and go, with many priorities not met at the end of any government’s time.
The current document amounts to a well thought out wish list, but not much more. There are some really interesting ideas – nothing more – such as taking a look at a new model of community banking.
The programme for partnership is an emulsion of the Fine Gael and Fianna Fáil pre-election manifestos, with some independent issues threaded through, like €10 million in additional funding for regional airports, turf cutting initiatives, independent clinical reviews for Waterford Regional Hospital, and funding for underwater research.
€3.8 billion will be spent faster than previously planned on housing, with a new minister for housing overseeing it all, while the action plan for jobs will continue as is, but with a more regional focus.
The new unemployment target of 6 per cent from the stability programme update released last week shows just how fast things have changed—this time last year the target was over 7 per cent unemployment by 2021. Education barely gets mentioned.
Whatever its makeup, the new government will have the aid of buoyant revenues from tax, and a benign international environment, though it might well be all just for now. Brexit, the Chinese economy sliding further in terms of its growth, a revaluation of the oil and gas markets, the refugee crisis, or some other unforeseen event could derail this recovery fairly quickly.
Cynics might point out that there will be an emission of commissions during the lifetime of this government. Public sector pay, education, water provision, abortion, Western development and more will have their cans kicked down the road.
While there’s understandably a lot of cynicism about commissions like these, I don’t share that cynicism. Page 12 of the document has a pretty good rationale for commissions—securing broad agreements on what the public wants on a specific issue, matching ambitions in an area to resources, and moving ahead. It all sounds very rational, and it can be done, if the will and the processes are there.
The idea of gaining a national sense of the value of health, of housing, of education, is tantalising and worth doing.
One of the biggest failings of Irish Water was the government’s failure to make the case for water conservation and investment before the establishment of the semi-state. More consultation takes longer, but has the effect of securing public buy-in, which is both more democratic and more likely to result in a stable outcome.
The budgeting cycle will be much improved under the new programme, with more public consideration, a budget office within the Oireachtas and new oversight structures.
We may well get to the kind of budgeting cycle where the big ‘budget day’ event becomes less important, which is sad for economists, because it was a bit like Christmas for us, but for everyone else, it will be a good thing.
Carefully mapped out and costed policies will now be possible for this administration, if they choose to use the budgeting service, which has the potential to end the kind of ‘fiscal space’ type arguments we all got sick of during the election.
The big question I’ve posed is also the simplest one: is it enough? Assuming the government survives to 2021 (an heroic assumption of Herculean proportions) even another €3.2 billion devoted entirely to it won’t solve the issues within the HSE, let alone the housing problem. We simply won’t find the money in the lifetime of this government to solve our problems.
The other large issue is the focus on current spending—pay, benefits, and spending more on stuff. There’s almost no focus on the capital side, the big, long term projects that alter the capacity of the state, which is a great pity. Beyond housing policy, almost nothing on capital gets a look in.
And remember: this is the mom and apple pie version of the programme. Reality will be much more circumspect, typically proportional to resources.
But let’s not be too cynical here. Ultimately a new government is a new opportunity for the state to develop in different directions. Our state’s institutions will adapt over the next year or two to cope with the new minority reality, and with that the kinds of questions our political system can answer will change, too.