Economic analysis:"Our programme is based on growth projections of 4.2 per cent." With those words Enda Kenny yesterday seemed to imply that Fine Gael and Labour's joint economic manifesto Protecting the Progress was a more prudent one than Fianna Fáil's.
On the face of it, it was. Fianna Fáil's, published on Monday, had assumed that real economic growth - the physical increase in goods and services not counting any increase in value caused by price growth - would average 4.5 per cent over the life of the next government.
In fact, the rainbow's assumptions about growth are virtually identical to those of Fianna Fáil. The rainbow compensates for its lower real growth forecast by implicitly assuming that price growth will be higher so that both manifestos assume that nominal growth - which reflects price growth as well as the production of goods and services - will average 7 per cent from 2008 to 2012.
Like Fianna Fáil, the rainbow also assumes that for every percentage point of nominal growth, tax revenues will grow by 1.1 percentage points, implying an average annual rate of tax revenue growth of 7.7 per cent.
Fine Gael and Labour's slightly different estimate of tax revenues this year leads them to forecast a tax revenue take of €71 billion by 2012, very similar to the €72 billion forecast by Fianna Fáil.
With both the Central Bank and the ESRI forecasting nominal growth to fall to 6 per cent next year, the possibility of either side getting a rude awakening is very real. Just as I had with Brian Cowen last Monday, I put this point to Enda Kenny and Pat Rabbitte yesterday and asked them to identify which of their promises would get first call on the public purse should the economy disappoint them.
Mr Rabbitte responded: "I think the health service has to be the priority. Continuing the infrastructure programme has to be a priority. Protecting people who are vulnerable has to be a priority."
Earlier in the session, Richard Bruton had asserted that reform of stamp duty would be a "core priority" of a Fine Gael-Labour government. So when Mr Rabbitte had finished stating his priorities, I asked if this meant that tax reform, writ large, came after spending on the rainbow's list of priorities. "It's not a case of either/or," was his response. Which brings us back to the question of how prudent political parties are being with their economic forecasts.
Applying a rate of nominal growth that is 1 per cent lower than expected by Fine Gael and Labour and assuming that instead of being 1.1 times economic growth, revenue growth will exactly match the rate of economic growth ie running exactly the same "stress test" exercise as performed in this paper on Monday for Fianna Fáil's manifesto on Monday - produces a similarly large hole of about €5.3 billion in the 2012 value of the rainbow's tax revenues. By the end of 2012, the two parties are promising to commit €4.9 billion in additional spending and €3.4 billion on tax reductions, including stamp duty reform. That adds up to €8.3 billion by 2012. Should the "worst case" outcome materialise (and the outcome could even be worse than this), this would leave the rainbow with just €3 billion to spend, barely enough to cover the spending priorities identified by Mr Rabbitte, never mind tax reform (the rainbow's proposed extra health spending alone will cost €2 billion by 2012). Even if the squeeze never comes there is the issue of timing. Mr Bruton said yesterday that stamp duty reform would depend on "conditions in the market for those buying and selling homes and on the budgetary conditions".
Now if the property market - and the employment and tax revenue that depend upon it - are suffering from anything at the moment, it is uncertainty in relation to whether stamp duty will be reformed and, if so, when and how quickly.
The reference to "budgetary conditions" in the rainbow manifesto, coupled with the modest risk that growth will underperform, suggests that stamp duty reform could be postponed for some years if Fine Gael and Labour are elected.
Mr Cowen made a fair point last Monday when he pointed out that thousands of people's livelihoods depend on certainty and stability in the market in relation to the next government's intentions. But like excise duties, reform of stamp duty should be done quickly or not at all. The rainbow has shot its bolt on this topic. Whether it has hit its intended target or its own foot remains to be seen.