How the Coalition blew it in 1982

Following a press briefing in the Fine Gael headquarters in the early stages of the June '81 election campaign, John Bruton mused to a friend that if Fine Gael actually implemented its programme in Government, it and the country would be in serious trouble. Bruton was aware of the time-bomb contained in that manifesto but, in the event, he was unable to defuse it.

Garret FitzGerald devoted little time to policy formulation during those years of opposition. When the time came in 1980 to get around to.

putting an economic package together he roped in the adviser he had employyed when he was Foreign Minister, economist Brendan Dowling.

Dowling had written a report for the National Economic and Social Council in March of 1978, "Inteegrated Approaches to Personal Income Taxes and Transfers". It was thought initially that some of the proposals that he had outlined in that document would become the basis of a new Fine Gael tax, cum tax credit plan. In the event bits of the package were grafted into a general scheme to shift the burden of taxation from direct to indirect. The huge PAYE marches of 1979 were the inspiration for the proposal.

While there might have been merit in the plan that was eventually conncocted, the fact that the public finannces were in such chaos meant that once the new tax package was added in to the fray, serious trou ble was bound to ensue.

The reason for this was simply that if indirect taxes were going to have to bear the burden of both the switch from direct taxes and the reduction of the budget deficit, then the price increases that would ensure would be enormous and politically unsustainable.

Fine Gael managed to avoid this prospect during the course of the elecction campaign by repeatedly refusing to state how it would get rid of the budget deficit over a four year period, apart from saying that it would take no positive action about it until the budget of January 1983. It was this commitment that Bruton was commmenting on after the press briefing - he then desperately wanted to become Minister for Finance and he was deetermined that if he attained the posiition there would be immediate action, whatever Garret FitzGerald said.

Bruton's appointment to Finance was one of the most courageous of FitzGerald's appointments. He was relatively junior within the party, although he had been in the Dail since the 1969 general election. He had become spokesperson on Finance only in January 1981 and he didn't begin to match FitzGerald's own exxpertise in economic affairs.

But there was about Bruton a seriousness about politics and an inntelligent appreciation of the extent to which the country was getting into a serious economic mess and of the fact that the Dail had no control over it. There was also a great deal of deterrmination and single-mindedness and a certain personal indifference to the vagaries of political fortune - all the ingredients for a great Minister for Fiinance in our present predicament.

Garret fussed greatly when the Coaalition got into Government and irritated not a few of his colleagues.

He was also very unsure of himself and this showed itself in the Dail on a number of occasions, notably on the defeat of Paddy Harte as Leas Ceann Cornhairle as well as in his handling of the H Block crisis. It was Bruton who supplied the steadying influence within the cabinet on economic affairs and it was he who clearly saw the need for an immediate budget in July to stem the rising tide of the budget defiicit.

There was a lot of hocus-pocus about that at the time. The deficit was really no larger than they antiicipated but Bruton wanted immediate action and he got it. Because of the commitments on reducing direct taxaation, that action had to be in the form of more indirect taxes.

Garret began to find his composure in the autumn and it was probably the inadvertent announcement of the connstitutional crusade which got him onto ground on which he felt more secure. His blurting out that he had come into politics to work towards a pluralist Ireeland and to achieve great social and economic equality seemed to relish his personal roots - he was to folllow up the announcement of his connstitutional crusade by telling a meeting in Kilkenny that the elimination of poverty could not await future econoomic growth. This was a statement which contradicted what he himself had been saying for years previously and which ran counter to a political consensus stretching from Sean Leemass to the likes of Ruairi Quinn èthe rising tide lifting all boats synndrome.

But there remained the committment to the new tax package and within it the time-bomb ticked away. When the figures underlying the package were found to be underestiimates the problem was made all the more difficult, for even the partial implementation of the promise would cause serious difficulty.

It was foolhardy to have expected deputies whose claims to legitimacy depended on their socialist credentials to have tolerated another budget which loaded the full burden of the tax package and the problem of the public finances onto indirect taxes, which are seen to be anti-working class.

Meanwhile Fianna Fail had their printers standing by for a week before the Budget and within hours of the Government falling the party's election posters were reeling off the presses.

Fine Gael was just as quickly off the mark. The party's main strategist in the June election, Sean O'Leary, was in the Dail chamber when the buddget was defeated. Enda Marren, the cooordinator of the campaign in the Dubblin region, and Sean Murray, the Fine Gael moneybags, were in the public gallery. Before some deputies had streamed out of the Dail lobbies, these three were in conclave on the third floor in Leinster House. They were joined later on by Peter Barry and later still by Garret FitzGerald. The Fine Gael campaign was under way.

Labour, again, was in the throes disarray. •