Are Labour's election promises adding up?

We analyse the feasibility of Joan Burton's pre-election promises

Labour, General Eleciton, national conference,

Image: Eamonn Farrell/Rolling News

They say that you should never return to a place that evoke unhappy memories, so the decision of the Labour Party to hold their pre-election conference in Mullingar, home of the eponymous Accord of 2007 was either very brave or foolish.

An audience of just over 500 saw the conference season thankfully brought to a close. The real election will hopefully be launched within the next couple of days. It was probably the best crafted leaders’ speech of the last three weekends but it was also the one that ranked as the poorest in delivery. In fairness Joan Burton would not claim to be a great orator and the party faithful recognise this and listen to the message rather than the messenger.

Upfront she referenced the part played by Fine Gael in the last five years, which was a lot more generous than Enda Kenny had been to Labour the previous weekend.

It was notable that she concentrated the early part of her speech on the damage that had been done to the country by Fianna Fáil stating that “Fianna Fáil inherited a boom and blew it”. It was clear from the speech that the Labour Party strategy is to remind the electorate what happened prior to 2011 and counter the Fianna Fail strategy of year-zero, which attempts to wipe from the collective memory the role they played in the crash.

The only reference to Sinn Féin and the hard left was made in posing the question: “Do you want to vote for the party that destroyed the country or for one that would destroy the country?” Perhaps during the next few weeks Labour will take on Sinn Féin but they may have decided to starve them of the oxygen of relevance in relation to Government.

Promises, promises

Burton made a number of commitments that would be implemented if her party is returned to power.

USC

They will abolish the USC for everyone earning up to €72,000 per year. Her ambition is to raise the minimum wage to a living wage, which by definition suggests that those on minimum wage for the past five years have struggled to survive. The problem with this proposal is that, as is the case for Fine Gael and Fianna Fáil, the tax raises over €4 billion per annum and there is no suggestion how that loss will be compensated for by other proposals.

This is part of Labour’s fair tax system which will apparently allocate one quarter of all spare resources to tax deductions with three quarters going to investment in services.

First-time buyers

In a throwback to the Charlie McCreevy years as Minister of Finance, Burton promised to introduce a scheme to help first time house buyers save for a deposit. Basically it means that for every €4 saved the State would add another €1 up to a maximum of €1,200 per year and this would continue for five years giving a maximum pay out of €6,000. They estimate that some 30,000 people would apply for the scheme which would cost €36 million per year.

Pensions

Pensions would be raised by €5 per week each year in the lifetime of the next Government. I estimate that this will cost an additional €130 million per year and that cost will escalate given the increase in the population of the pensioner sector.

However the two big ticket items are the ones that will surely be the most difficult to convince the electorate that they are feasible and not just election stunts.

Free GP care

They propose to introduce free GP care for everyone. Now Kathleen Lynch has acknowledged that the scheme for under 6’s and over 70’s will cost some €70 million per annum. By my calculation this caters for some 850,000 in the two age categories. This works out at some €83 per person per year. The cost of adding the rest of the population of 3.74 million would be an additional €310 million annually giving a sum total of €380 million or €1.9 billion over a five year period.

Childcare

The other big promise was the reiteration of the childcare proposals announced three weeks ago. I did a reality check on them at the time which is available on the website but a summary of the proposals are:

The bare bones of the story are that childcare will cost parents just €2 per hour per child for up to 40 hours per week. However the scheme would not just apply to pre-school children but would include all children up to the age of 12. They claim that they can phase in this proposal over a 5 year period at a cost to the exchequer of €500M per annum.

However there are 356,000 children aged between 0 and 4 in the country plus another 504,000 aged between 5 and 12 giving a total figure of 860,000. This averages out at €581 per child per year in subsidies to the childcare industry. I realise that all children would not require the same number of hours in childcare but even taking a conservative average of 20 hours per week per child the figures just do not add up.

Even at 40 weeks per year that amounts to 800 hours per child and the €500m subsidy would result in a measly €0.72 per hour per child.

Another way of looking at the proposal is that €500m would support just 52,000 children per year for 40 weeks at 40 hours per week

This represents just 6% of the total children in the State in the relieved age groups.

Effectively this is not workable and is insulting the intelligence of those desperately seeking a solution to a long-standing problem that is inhibiting the ability of people, especially women, to remain in the workforce.

The problem with these proposals is that while some are costed they do not all stand up to scrutiny and there is no indication of where the money to implement them is coming from - especially as most of the income generated by the USC will be eliminated.

After accepting the acclaim of the audience for Labour’s role in ensuring that the same-sex referendum was put to the country and subsequently passed into law, Burton announced that she will ensure a referendum to repeal the 8th Amendment. As she said: “In such tragic circumstances (fatal foetal abnormalities), some women will wish to see out their pregnancy. Some will not, and it’s not right that our answer is to send them abroad.”

This will put her at odds with Enda Kenny as he has merely promised to send the proposal to the Citizens Assembly for consideration.

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