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Fianna Fail Won the General Election on the Economy…
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…but were they really beyond attack for their management of it?
I know it is a pity line thrown out every time the tax take exceeds estimates but that is because it is every time. The regularity with which no one in Finance can predict tax takes is a measure (to the layman) of how big a mystery our success has been to government. Perhaps one commentator I heard last week was right when he suggested that Fine Gael and Labour lost this election by gifting Fianna Fail superiority on the economy.
They could have challenged management of it from the start and could have won (i.e. logically speaking, it was possible to win). This time they weren’t expecting €3.7 billion. Any government returned will be happy for it, but does it represent the height of good management to get this shock, the political will to be below-target every time (for some reason) or the worrying lack of awareness of the economic patterns?
Two interpretations of the systematic underestimation of revenue: (1) incompetence (2) deliberate understatement by right-wing finance ministers not wanting the general public to get more demanding of the state by thinking that revenue is permanently higher. Of course (1) and (2) don’t contradict each other. Notice how Bertie managed to make an issue out of how to pay for extra acute care beds even though revenue has always come in ahead of forecasts. So there does seem to be a public sense that the resource envelope is “tight”.
I agree completely about the economic management case but it was a challenge with the growth figures still figure good. The case needed to focus on inflation, the health of industry outside the tech/pharma sectors (e.g. this news today), and the whole benchmarking exercise. But the opposition for the most part chose not to fight on those grounds.