McDowell's bogus election options

If we had a credible opposition, it would be setting the agenda for the next election. Instead it is a member of one of the Government parties, Michael McDowell, that is doing that, and doing it with vigour and ingenuity. On Friday 24 February in a speech to members of the Progressive Democrats in Waterford, he sought to define the issue in the forthcoming election as who will be the junior partner in the next government, because, he argued, it was always the junior partner that defined the ideological colouration of a government.

He said: "I have to say that I find the focus on who will be the next Taoiseach to be significantly overblown. If the history of the last 35 years has taught us anything, it is that the most important party in a government is not the senior party but the junior party. The larger party may provide the Taoiseach. But the junior party provides the essential direction of the government".

He then went on to make a series of highly tendentious observations, on none of which he has been challenged by anybody, least of all by the other putative junior partner in government, the Labour party.

He said: "Consider the 1973-1977 coalition of Fine Gael and Labour. That government was led by Fine Gael's leader, Liam Cosgrave. But the junior, defining partner was the Labour Party. That government was the only one in the history of the State to introduce a Wealth Tax".

The wealth tax was introduced because death duties were being abolished and it was considered that death duties were unfair to inheritors. The notion of a wealth tax infuriated the tiny elite that was likely to be the targets of it, the same elite that benefited hugely from the abolition of death duties.

He went on: "Consider the 1982-1987 coalition of Fine Gael and Labour. That government was led by Fine Gael's leader, Garret FitzGerald. Even though Fine Gael's main election policy at the 1982 election had been a determination to address Ireland's public spending deficit, our national debt doubled under this government. That is because Labour blocked the necessary cuts in public spending".

It is true the national debt doubled during this period. It is also true that the national debt trebled during the time that Michael McDowell's friends, including his party's founder, Des O'Malley, were in office. And it is also true that the crisis in the nation's finances arose directly from the promises made in the 1977 general election by that faction of Fianna Fáil that later formed the basis of the Progressive Democrats.

Michael McDowell went on: "To compound their errors (that is the "errors" of the Garret FitzGerald government), that government introduced a Residential Property Tax, again at the insistence of Labour". The Residential Property Tax was designed to capture in the tax net the high-net-worth individuals who otherwise were and are escaping the tax net altogether. The abandonment of the Residential Property Tax has contributed to massive tax avoidance on the part of the rich, a problem which the last budget has attempted to address.

He contrasted this record with the record of the Fianna Fáil-Progressive Democrat government from 1989 to 1992. "The defining partner of that government was the Progressive Democrats. In its three year life, that government reduced the top rate of income tax from 56 per cent to 48 per cent. It reduced the basic rate of income tax from 32 per cent to 27 per cent."

But without the assistance of the Progressive Democrats the Haughey government from 1987 had started to reduce income tax. In his budget statement of 27 January 1988, the then Minister for Finance, Ray McSharry, said: "In the Programme for National Recovery the Government gave a commitment to introduce income tax reductions to the cumulative value, over the next three years, of £225 million, including increases in the PAYE allowance costing £70 million. The Government also undertook to make significant progress towards having two-thirds of taxpayers on the standard rate. To honour this commitment, tax reductions costing just over £30 million this year would be sufficient. I propose, however to go very much further than this and to provide for tax reductions costing £91 million in 1988 and £152 million in a full year".

Referring to the Fine Gael-Labour-Democratic Left government with John Bruton as Taoiseach, Michael McDowell said: "Despite strong economic growth and rapidly improving public finances, that government could manage just a single one per cent cut in the basic rate of income tax in the immediate run-up to the 1997 general election".

But so what?

The following is what Charlie McCreevy had to say on 3 December 1997 about the performance of the economy during the period of the Fine Gael-Labour-Democratic Left government: "I would like to acknowledge the contribution that my predecessors in this office have made in that period (ie 1994-1997)... In that period the numbers at work have increased by over 250,000. Our public finances are in much better shape... Nineteen ninety-seven has been the fourth successive year of very strong economic growth".

So in other words, the economy was in fine shape in 1997 before the Progressive Democrats got back to government and before the lavish tax cuts.

Those tax cuts and the general policy of the Fianna Fáil-Progressive Democrats government since 1997 have greatly exacerbated inequality in Irish society, large areas of disadvantage have been ignored, the health service has been deprived of necessary funding (yes, there has been a huge increase but an insufficient increase to compensate for the cut backs in health in part from 1987 to 1989 and in part during the period when the Progressive Democrats were in government from 1989 to 1992).

One of the choices in the next election is between that mix of parties (or a similar mix) which brought the economy to such a healthy state in 1997 without the ravaging policies which followed, courtesy of the Progressive Democrats, or the present Government, which has merely overseen a continuance of the economic success that was underway when it came to office but in the meantime has delivered most of the fruits of that success to the wealthy elite.

vincent browne