This bud­get en­hances the Gov­ern­ment’s sus­tain­abil­ity

The Irish Times - - Opinion & analysis - Noel Whelan

Dono­hoe suc­ceeded partly be­cause he is nei­ther an ide­o­logue nor a risk taker. He is un­apolo­get­i­cally mod­er­ate and in­cre­men­tal

Yet again it was a mo­ment on RTÉ’s

Prime Time that il­lus­trated the changed po­lit­i­cal con­text in which bud­gets are shaped in the cur­rent Dáil. In the era of con­fi­dence-and-sup­ply agree­ments the tra­di­tional head-to-head be­tween the Min­is­ter for Fi­nance and the lead­ing Op­po­si­tion spokesper­son on fi­nance is no more.

In­stead, Paschal Dono­hoe lined up on a panel with no fewer than five other deputies, in­clud­ing a fel­low Min­is­ter, to de­bate the finer points of the bud­get. The pre­sen­ter, David McCul­lagh, drew mat­ters to a close, not­ing that the politi­cians around him were needed for late-night votes on bud­get res­o­lu­tions in the Dáil. Men­tally, one be­gan pair­ing the panel off, re­al­is­ing that any vote Min­is­ter for Chil­dren and Youth Af­fairs Kather­ine Zap­pone and Min­is­ter for So­cial Pro­tec­tion Regina Do­herty would cast for the bud­get would have been can­celled out by those of Sinn Féin fi­nance spokesman Pearse Do­herty and In­de­pen­dents4Change TD Clare Daly. Labour leader Bren­dan Howlin’s would have been the de­ci­sive vote be­cause Fianna Fáil’s fi­nance spokesman, Michael McGrath, was in ef­fect rush­ing back to Le­in­ster House merely to ab­stain.

At this point to­day the Gov­ern­ment will be happy the bud­get has slipped down the news agenda. Even when bud­gets go well on the day, there is of­ten an un­no­ticed po­lit­i­cally con­tentious mea­sure which can take a few days to ex­plode. The fact that some con­tracts for the trans­fer of farm land may be im­pacted by the in­crease in stamp duty on com­mer­cial trans­ac­tions caused some flashes yes­ter­day but are likely to fiz­zle out.

It will take a year to as­sess the eco­nomic suc­cess of this bud­get but what is al­ready clear is that po­lit­i­cally Bud­get 2018 has en­hanced the Gov­ern­ment’s po­si­tion and its sus­tain­abil­ity.

It is sig­nif­i­cant that this makeshift mi­nor­ity Gov­ern­ment, while weak in many other re­spects, has com­fort­ably de­liv­ered a bud­get for the sec­ond time. In this bud­get Dono­hoe man­aged to give some­thing small to ev­ery­one in the elec­torate. He also man­aged to feed the Fine Gael grass­roots and to keep his In­de­pen­dent col­leagues in Cab­i­net happy. He did so while at the same time re­in­forc­ing rather than strain­ing the con­fi­dence-and-sup­ply agree­ment with Fianna Fáil.

To have suc­cess­fully charted these var­ied po­lit­i­cal pres­sures care­fully in his first out­ing is no mean achieve­ment. Dono­hoe had the ex­pe­ri­ence as min­is­ter in a sup­port­ing role to Michael Noo­nan’s last year. This year, how­ever, he had to man­age the var­i­ous po­lit­i­cal com­pli­ca­tions in his own right. It is worth remembering that Dono­hue was pro­moted to Cab­i­net only three years ago.

He suc­ceeded in this task partly be­cause he is nei­ther an ide­o­logue nor a risk-taker. He is un­apolo­get­i­cally mod­er­ate and in­cre­men­tal.

Generosity

Dono­hoe also suc­ceeded be­cause he dis­played po­lit­i­cal generosity. Zap­pone, for ex­am­ple, an In­de­pen­dent, was al­lowed to claim credit for the an­nounce­ment of more staff for Tusla. Dono­hoe not only found the money for an in­crease in teacher num­bers to en­able a re­duc­tion in the pupil-teacher ra­tio at pri­mary level but he was pre­pared to let Fianna Fáil take the credit for that and for the other bud­get ini­tia­tives that party had cham­pi­oned.

The smooth changeover in the lead­er­ship of this Gov­ern­ment from Enda Kenny to Leo Varad­kar last sum­mer and the calm pol­i­tics around the bud­get this au­tumn all serve to lengthen the life span of this Gov­ern­ment. There is now no sub­stan­tial dif­fer­ence in eco­nomic or bud­getary pol­icy which should threaten the sur­vival of the Coali­tion or their con­fi­dence-and-sup­ply ar­range­ments over the next year. There is every rea­son to be­lieve the par­ties in­volved in keep­ing this Gov­ern­ment in power, in­clud­ing Fianna Fáil, will re­peat this smooth bud­get process next year.

For now, the two main par­ties have a strong in­cen­tive to keep things as they are. Last week­end’s Ir­ish Times MRBI poll con­firmed a trend in which both Fine Gael and Fianna Fáil are in­creas­ing sup­port at the ex­pense of In­de­pen­dents and smaller par­ties. It seems less and less likely that this Gov­ern­ment will fall be­fore bud­get day next Oc­to­ber.

The other po­lit­i­cal con­text in which this bud­get was shaped was the loom­ing and threat­en­ing spec­tre of Brexit.

Dono­hoe ac­knowl­edged that he held back from two big moves he could have oth­er­wise made in this bud­get be­cause of the prospect of Brexit. He opted to re­tain the low VAT rate for the tourism and hos­pi­tal­ity in­dus­try be­cause of the fall in tourist trade from the UK. He de­cided against in­creas­ing duty on al­co­hol for fear of ex­ac­er­bat­ing cross-Bor­der price dif­fer­en­tials when ster­ling is fall­ing be­cause of the Brexit un­cer­tainty. The Min­is­ter also an­nounced a favourable loan scheme for busi­nesses likely to be af­fected by Brexit.

Else­where this week, the news was very dis­cour­ag­ing about Brexit. Grad­u­ally, the true im­pact of Brexit on Ire­land is be­com­ing in­creas­ingly ap­par­ent. Brexit above all else will shape our bud­gets for years to come.

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