A GAME CHANGER OR A DEAD-CAT BOUNCE? A DEAD-CAT BOUNCE?
Coalition takes ‘poll position’ in race to win us voters over – for now at least
THE next political opinion polls – for once – will be very interesting. For the past year or so, the polls have strongly favoured Sinn Féin and an apparent desire for change, with Fine Gael and Fianna Fáil struggling to attract much support, especially since the worst of Covid lifted and appreciation for the Coalition’s efforts in that regard waned.
But it’s all been a few points here and there with no big shifts in the public mood, largely characterised by an overall feeling of dissatisfaction and a desire for some change.
So the big question is: is the €11billion Budget announced yesterday a game changer? Will it provide a boost to the immediate fortunes of the big two Government parties (and the Greens too)? Or will this be a dead-cat bounce instead of a more permanent turning point at the near midway junction in the life of this Government, and before FG and FF swap portfolios, including Taoiseach and Minister for Finance?
Paschal Donohoe and Michael McGrath most certainly splashed the cash in their announcements yesterday. It was hard to keep up with the spending announcements
‘Something for everyone in the voting audience’
as they came thick and fast. There was almost something for everyone in the voting audience… and some of it very generous too. There may have been more headline-grabbing tax cuts in the past, but the transfers of cash to benefit social welfare recipients, pensioners and workers was beyond almost anything in memory.
The opposition of course would have spent even more – Sinn Féin an extra €2billion or so – and might have shown more favour towards those more likely to vote for them, those dependent on social welfare or on lower incomes. But even the opposition must have been taken aback by the willingness of the Government to spend as much as it announced.
It left Sinn Féin’s finance spokesman, Pearse Doherty, in possibly the most difficult position he has been in since entering the Dáil in late 2010. He ran the risk of looking as if he was merely nit-picking, although renters in particular will have appreciated his intervention on their behalf.
For all the fine words from the Government benches about increased supply, the cost of housing – either to rent or buy – remains the primary concern for many younger voters. The rental tax credit announced yesterday went nowhere near as far as Sinn Féin would have gone.
As much as the commitment to additional spending caught the eye and ear, the Government was clever enough too to make commitments that would appeal to the more conservative in the audience. It is keeping money in reserve, literally, with €2billion this year and €4billion not being spent but funnelled into a reconstituted National Reserve Fund, the rainy day piggy-bank or whatever you want to call it.
It was also prudent not to present all of the money as permanent increases, which is why social welfare hikes were €12 a week instead of €20, as many had demanded. Instead, there are one-off payments that hopefully will not have to be repeated.
Careful analysis of yesterday’s figures suggests that the extra money will not compensate in full for the extra costs affecting all individuals and families because of soaring inflation. The increase in electricity and gas prices are bad enough, but wait until the impact of increased mortgage interest rates starts to bite.
Mortgage repayments or rent are always the biggest monthly outgoing. Many people are going to find those monthly bills going up significantly if they have not fixed their mortgage rates. They will not be able to expect the Government to step in to deal with that, and many employers will plead an inability to deliver pay increases that will compensate sufficiently.
There will always be some who expect the Government to sort out all of their problems – and they will be the ones who will gravitate towards the promises made by the opposition parties.
Equally, however, there will be plenty of voters who appreciate that some of the problems facing us are beyond the Government’s control, and the money to provide compensation is limited. And they won’t necessarily agree with the idea of raising more taxes or adding to State borrowing to pay for everything.
Those people are likely to be higher-income earners who, relative to lower earners, did better in yesterday’s Budget, although the disparity was nothing like that in Britain’s controversial mini-budget last Friday. (And, as Mr Donohoe emphasised to me in a radio interview yesterday, Britain’s budget involved massive borrowings, which is not what our Government is doing.) But those higher earners are the people who are more likely to vote for so-called ‘establishment’ parties. Why would the Government parties give a greater proportion of what’s available to those who would never vote for them anyway?
There is a political market into which Fine Gael and Fianna Fáil and the Greens can continue to tap. Yesterday’s Budget may have been the start of the fightback. But it’s only one day.
Let’s see how long the afterglow lasts. And maybe the second and third post-Budget opinion polls will be even more revealing than the first.