Voters Won’t Pay More Tax and We Are Going to Hell in a Handcart

Also known as Saturday’s Irish Times. The story most politicians and backroomers will chew over this morning is the dramatic figures which suggest nearly 3/4 of the electorate will not pay more tax in order to fund services. The data prior to this from Red C polls in the Business Post had the figure at 50/50 between the electorate on tax and spend. The dramatic shift of 25% of the electorate in the space of a few months is perhaps a reflection on the condition of the health of household budgets as much as a grand ideological swing.

I refuse to credit the ideological argument (such as it has been) with that level of success.For parties it increases pressure in another way, for any party who now stands before people, the issue of proper administration of funds will become central. In boom times people can overlook these issues in order to simply keep the boom rolling (or indeed boomer, as our Taoiseach would have it).

The people are more aware of the squeeze on personal finances stemming from EU interest hikes and price increases. This is the subject matter of the editorial in the IT in which Madame lays the blame for inflation-fuelling growth at the door of the Fianna Fail/PD government. In recent electoral talk of past records of administration, it seems timely for the unofficial opposition to highlight that it was the last rainbow which managed growth, reduced unemployment and kept inflation low. As we highlighted above, people are feeling the squeeze from Europe and at home. There are a multiplicity of factors driving prices, many outside government control but some inside.

The implication from the Irish Times is that it is solely public spending (quelle surprise), however (again, surprise) I disagree. Look at the effect of energy prices on inflation and you will see it is one of the main drivers in price rises. As Michael Taft has noted however this is paradoxically a result of trying to lower public expenditure and privatise electricity provision. It is but one example which points to a more complex problem than ‘too much spending’. Granted people may not be willing right now to pay more. That is because they are being squeezed again. The time of willingness has since passed by.

Now the next government, of whatever hue, has to take the leap and ensure that they deliver on the funding they have. That entails reform (painful in many cases, though Richard Bruton is right to begin with the HSE/Health Board overlap) and honest prioritisation. Not always traits associated with the present government. This morning the Irish Times has raised perhaps more issues than it knows (or cares to perceive). People are not as flush as before, are less convinced that government can deliver and are less willing to give the next lot a free reign.

The economic conditions here are not bad, but not great. Our households are under more pressure than at any time in the past 5-10 years (with the arguable exception of the mini-bust around the last election). People need to hold on to their money, but in such a climate they also need government to deliver on its side. The education, skills, jobs, infrastructure. The good health, clean accessible hospitals, secure communities.