Budget February 1981

That an assessment of the budget must be done strictly in terms of considerations of political expediency is a reflection on the degeneracy of Irish politics generally. In a report on the Labour Party in this issue, we show how removed that party's deliberations are nowadays from any socialist perspective. Fine Gael, which has decried "materialism" and the Dutch auction approach to politics, is currently busy concocting an election programme which will amount to a further dose of the dreaded "materialism" and more goodies for the Dutch auction. Their programme for the farmers was the first instalment of this strategy, with of course no hint as to how it would be paid for.

In the light of this it is difficult to fault the recent budget for failing to grapple with the serious problem of Government borrowing and for again cheating on the public expenditure estimates for the coming year. The fact that income taxation may have to be doubled in a few years time to deal with the borrowing problem goes ignored by all the political parties, unwilling to grapple with the harsh and unpalatable issues of the here and now.

It was fairly predictable that the Government would underestimate public expenditure for the coming year, for to do otherwise would have involved the imposition of taxes which would have been electorally unacceptable and/or a borrowing rate which would have frightened people out of their current indifference to this problem.

What was not predictable was the provision of £80m. for special increases in public sector pay and £70m. for contingency requirements in the capital budget. Why these weren't lumped into the general kitty to present a better gloss in the claimed reduction in the borrowing is hard to understand

It is also difficult to understand why the Government opted for a 25 percent increase in social welfare benefits. Not, of course, that they aren't vitally necessary for those dependant on them, but because there aren't any votes in them. Now and again in politics, even nowadays, a little genuine compassion and commitment seeps through. This has been a part of Charlie Haughey's complied political make-up and one which he is personally very defensive of and perhaps that accounts for the increase.

A half hearted attempt has been made to buy off the farmers vote, which is going to be crucial in the coming election. However, the measures do little to off-set the 45 per cent drop in farmers' incomes last year and will do equally little to stop the defection of the farmers' vote from Fianna Fail.

The key to the farmers' vote would now appear to be the success of the price fixing talks by the EEC Council of Ministers. This should come to a conclusion in early April but the expectation of an increase of more than 10 per cent in farm prices then is unrealistic and even that would hardly do much for Fianna Fail's chances of holding on to that vote.

There is another complication in that the French may want to delay the outcome of these negotiations until after the French Presidential elections in early May, if this transpires the situation is further complicated and, incidentally, Ireland's sole major ally in the negotiations will hardly be as insistent on a significant price rise than if a deal were done before the election.

The budget would appear to suggest that the election will be held before the autumn of this year - September at the latest. If there is a delay until after that date the discrepancies in the Government's calculations on public expenditure will have become evident or there will have been industrial relations trouble in the public sector because of refusals to pay special increases. It will also be apparent by then .1 that the size of the non-pay public expenditure cuts in the health, education and other services will have been massive, with all kinds of electoral repercussions. Alternatively the situation will have got out of hand again and the figures will have been shown to have been disastrously wrong.

There is no point in holding an election before April when the social welfare benefits come on stream and by then there will be a temptation to hold on until the early summer months when the effects of the public capital programme will be making themselves felt.

Once into late May or June there will be a temptation to hold on until the end of the summer in the hope (a) of an oil find and (b) of good weather and a consequent boost in farmers incomes.

So the options open to the Taoiseach on the timing of the election would appear to boil down to (i) late Mayor June, (ii) September and (iii) April/ May 1982.

It was argued in Magill last month that there is little hope of Fianna Fail winning an election at any time this year because of the prevailing rate of inflation, the trend in the six months prior to the election appears to be the decisive issue in electoral outcomes. It just does not seem plausible that Fianna Fail would be returned to power having presided over an annual inflation rate of over 15 per cent for nearly three years, nor that the massive drop in farmers' incomes, wouldn't be reflected in a very substantial swing against the Government in the key marginal constituencies.

It would seem that the only hope they have of hanging on to power is to wait until 1982 when things might be better on the economic front generally and on prices and farmers' incomes in particular. There is also the consideration that Charlie Haughey has been Taoiseach only since December 1979. He would like to ensure that the history books noted he was Taoiseach for more than a year and a half - he has no way of ensuring that than by holding off on an election until as late as possible.