Budget 2017: The strategic reality of what to expect tomorrow

Budget will pass without much shock because the only realistic alternative is a second general election

Budget 2017: The strategic reality of what to expect tomorrow

File photo. Image: Niall Carson / PA Archive/Press Association Images

Barely five months after the Government was formed on May 6th, Ministers Michael Noonan and Paschal Donohoe will tomorrow present its first budget.

That basic sentence camouflages the reality of a budgetary process underpinning the most dysfunctional Government in modern times. While Enda Kenny and his Ministers will portray the measures announced as a triumph for his Government, the reality is that they will only survive the customary vote because of the 'deal' done with Fianna Fail.

The 'deal' was officially termed as “confidence and supply” but could more accurately be described as grace and favour. This Government will survive only until Fianna Fail gauge that there is sufficient consistency in opinion polls to ensure that they will, by some distance, be the largest party in the next Dail.

Quite simply, the budget will pass because the only realistic alternative is a second general election this year and the polls indicate that the current electoral line-up is only going to change marginally. A frisson of excitement surged through Fianna Fail ranks in July when an MRBI poll had them at 33% and heading for 60 seats. There were whispers of Government by Christmas although it certainly was not a view endorsed by the leadership of the party. However, another MRBI poll last week saw their support back at a more credible 26%.

The best that they could hope for after a snap election would be a handful of seats more than Fine Gael and relying on that party to support a Micheal Martin led administration. In many ways that would actually be a worse position than they currently occupy where they hold most of the cards.

Promises, promises

One of the most difficult tasks facing Fianna Fail spokespersons currently is to keep a straight face when they claim that they are in opposition and governing the country is a matter for Fine Gael and the Independents. They are in the perfect position of being able to cherry pick credit for the most popular measures in the budget while tutting at those that will draw criticism. A good example of this is the furore over the proposed €5 per week pension increase. In the 2016 budget when the pension was increased by a mere €3 per week, Fianna Fail accused Fine Gael and Labour of neglecting the elderly.

The emphasis by Fianna Fail on championing the cause of our senior citizens is as much for potential electoral gain as for any altruistic motives. Some 480,000 pensioners voted last February with Fianna Fail gaining the biggest single share at 32% which meant that almost 30% of the party’s 520,000 votes came from that group. Even more significantly the last month of the campaign saw a surge in support for Fianna Fail from the over 65’s when they gained 14% points worth some 65,000 votes, and effectively won an extra 7 seats for the party which, consequently gave them the opportunity to be in the pivotal position that they are today.

In order to spread the available funds over a larger number of people Fine Gael are suggesting that the €5 increase be deferred until at least the second quarter of 2017, with some wanting to go as late as six months into the New Year. However a three month delay would mean an effective weekly increase of just €3.75 while a six month delay would result in just €2.50 a week. On Friday evening Michael Martin made it a red line issue that the increase should be paid in full from January but if fails to deliver on this, the stink that his party kicked up last year will look like hot air. It would also open him up to attack from Sinn Fein and the parties of the left as to his real influence on the Government.

Growing discontent

There is growing disquiet within sections of Fine Gael that Enda Kenny too readily bows to Fianna Fail demands and they want him to stand up to Micheal Martin over this issue. They argue that by benefitting a much wider range of voters, albeit by relatively small amounts, it will enhance their election prospects. The big question is - would Micheal Martin be willing to collapse the Government if he doesn’t get his way on this issue? If he compromises, he is in danger of being seen as weak and potentially ridiculed by those who see themselves as the real opposition.

It will be interesting to see how this unfolds tomorrow. 

 

Independents

One of the other main points of interest is the dynamic with the Independent members who comprise the non-Fine Gael element of the Government. During the Government formation talks, we witnessed the Independent Alliance and the so called Rural Five parade in front of the cameras as they glorified in their time in the spotlight almost every evening.

Although it was not a registered party, the Independent Alliance seemed to have a self-styled leader in Shane Ross who ended up as Minister for Transport and Sport. Having, by his own admission, been made to look somewhat foolish in his attempt to involve himself in the Pat Hickey controversy, the man who would win an Olympic medal for getting to a microphone first has gone to ground. It is rumoured that he will get some €70 million extra in the budget although it is unclear what precisely the additional funds will be spent on. Maybe Rhetoric Ross has finally realised that if you have nothing to say, say nothing at all.

Finian McGrath is prepared to countenance a delay in the implementation of the pension increase if it is compensated by commensurate increases for those with disabilities. In fairness to McGrath, he is not a 'Johnny come lately' in seeking help for the disabled as it is a cause that he has championed throughout his political career. Interestingly, he appears to be prepared to risk votes among pensioners in his constituency, which has the highest percentage of over 65’s in the country.

John Halligan has just had a large dose of political reality in his battle with the HSE over the cardiac unit at Waterford University Hospital. Whatever about the rights and wrongs of the case and whether or not political promises were made, Halligan has rowed back on his threat to leave the Government. The fact that Stephen Donnelly is now a free agent and chomping at the bit to get to the Cabinet table should a vacancy arise, has certainly concentrated Halligan’s mind on being better off inside the tent. It will be interesting to see if any crumbs are directed his way tomorrow.

Politicians and Independent TD’s in particular bridle at the accusation of being parish pump politicians. Despite this they regularly offer up examples of why they often deserve the label.

Sean Canney and Kevin “Boxer” Moran attracted attention last May when it was decided that they would share the Junior Minister job at the OPW. They dignified the role by flipping a coin to see who would go first. Then last week when funds were announced for improvements to the flood defences along the Shannon, it was reasonable that Minister Canney would be in Athlone to make the announcement.

However, alongside him every step of the way was the aforementioned Moran who was determined to ensure that the good people of Athlone are well aware that their local TD and putative Minister are looking after their interests.

Keeping it local

For many Independent TD’s, getting re-elected trumps the national interest every time. They want measures in the budget that target the rural population, such as additional help to farmers, a “rainy day” fund, inheritance tax increases and relaxation on the rules on the Fair Deal Scheme in relation to farm assets.

Despite the high profile of the Independent Alliance members it is The Yankee at the Court of King Enda that has stolen a march on them all. Last April and May when the Independent men (they were all men) were traipsing up and down before the cameras, Katherine Zappone slipped in the side door of Government Buildings and did a deal with Enda Kenny to support the formation of another Fine Gael led administration. At a stroke it virtually ensured that Michael Martin would not be able to get the numbers to make a credible run for Taoiseach.

Her reward was being appointed Minister for Children and in the budget negotiations she has copper fastened her reputation as an astute political operator by playing hard ball on her demands for increased childcare provision. While we won’t know the precise details of the package  until tomorrow it appears that she will get some €100M primarily aimed at lower income families. Either way it is a much better deal than anyone in the previous administration achieved.

Her confidence in her security of tenure in the Government is her open support to repeal of the Eighth Amendment despite the Cabinet decision to refer it to the Citizens Assembly.

Apart from Zappone, the other big winner from the Independent ranks is Denis Naughton, who is now Minister for Communications. As a former member, Naughton knows his way around Fine Gael and quietly gets on with his job without seeking undue publicity. It is expected that he will get good news tomorrow in relation to funding for the roll out of high speed broadband across the country.

Power

This budget is aimed at keeping Fine Gael in power and staving off an internal challenge to Enda Kenny’s leadership. Fine Gael lost 26 seats last February not because they had to take corrective measures to save the State. They lost those seats primarily because of Michael Noonan’s almost masochistic love of austerity measures that in many cases targeted those who could least afford it while many of those who caused the crash rode off unscathed into the sunset. This approach enabled Fianna Fail to develop a softer focus and begin to distance themselves from their free for all economics of the Noughties and they reaped some electoral reward.

So now it’s going to be something for everyone in the audience. However whether the measures will satisfy expectations is another matter. The proposals to marginally reduce USC rates are barely baby steps in fulfilling the Fine Gael commitment to remove a deeply unpopular tax. Similarly, will a tax credit of up to €20k really make a dent in the housing market or just end up in developers pockets?

Tomorrow will give a fair indication into how much longer this Government can last and whether or not “new politics” is just a flag of convenience until old politics returns.