Noonan puts bet on quality-of-life issues

Betting that quality of life issues will decide the swing vote in the next election, the Fine Gael leader, Mr Michael Noonan, …

Betting that quality of life issues will decide the swing vote in the next election, the Fine Gael leader, Mr Michael Noonan, has turned his gaze on the less pleasant aspects of the Celtic Tiger.

The public, he believes, are tired of second best. They want a better health system, better care for the elderly, smaller class sizes, fewer traffic jams. Little new there, one might think.

He believes the public is ready to pay the price. Some in his own ranks are doubtful, but he insists: "I am not trying to paint rosy pictures here."

Fine Gael has travelled a similar road before. Last November John Bruton introduced the £160,000 "Celtic Snail" campaign to highlight the Tiger's downside. Dubbed "valid, but badly executed", it flopped.

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Known as "the social contract", Mr Noonan's plan is to overhaul social partnership and offer fleshed-out guarantees about services in return for agreement.

State employees would be expected to accept major changes in the way they do their work. "Simply throwing money at a problem will not make it go away," he said.

"We have to evaluate every extra penny that we spend. There is no point pouring money into services where the improvement is going to be frustrated by an antiquated system."

He pitched these ideas to the social partners over the past two weeks: the Irish Congress of Trades' Unions, the Conference of Religious in Ireland, the farmers and the employers.

"I put it to them that for the social partnership to survive it needs to be a much fuller contract," Mr Noonan said. He is trying to recover the pace he enjoyed briefly before the ESAT Digifone/Telenor row.

So far, the social partners have privately reacted positively. "There has been a sea change. People have made progress. For the first time, they don't have to struggle. We can make choices. We have Continental incomes, but we don't have Continental services," said one of them.

So what would a social contract look like? For instance, low-paid workers could be offered medical cards and guarantees that it would mean treatment, not "a 2 1/2-year waiting list".

Private-sector workers would be equally tempted, according to Mr Noonan.

"If people were sure, really sure that services were going to improve, they would agree. My instinct is that while taxation is an issue all the time, it isn't as strong as it was.

"Education is an issue, particularly now. Health is huge. Waiting lists now affect people, even if they have VHI or BUPA. It's five or six months for a knee operation, regardless," he said.

"We seem to have cracked the wealth creation problem. Now it is about a question of equity. It isn't just enough to have a successful economy. It must be socially successful as well."

Mr Joe O'Toole, a senator and leader of the Irish National Teachers' Organisation, agreed: "If the quality-of-life message is ever to strike a chord it has to be now."

The recent contacts have done much for Mr Noonan's standing with the union leaders. Although Mr John Bruton operated social partnership, they always regarded him as a sceptic on the subject.

But union leaders' opinions on "the social contract" are one thing. The views of their rank-and-file are another. Here, the omens are not so good.

The vote on the Programme for Prosperity and Fairness was won narrowly in many unions. State employees may balk at dramatic change, even if they are getting paid for it.

Hedging his bets, therefore, Mr Noonan has put something aside for those interested in taxes and not contracts: a 30 per cent tax rate to cover a single person's income of £20,000 to £31,000 and double that for couples.

Speaking to a nearly empty Dail chamber just days before Mr Noonan's "ardfheis that never was", the FG deputy leader, Mr Jim Mitchell, said middle-income taxation was still too high. If it did not fall tax bands would have to rise sharply and/or the top rate would have to fall. Both courses would be expensive, he argued. The latter would be unfair.

The plan, coupled with the abolition of DIRT, cuts in Value Added Tax and restoring employers' PRSI ceiling, met with the ire of the Labour TD, Mr Derek McDowell.

"We cannot pretend that one can have it both ways, as the Government did in its most recent Budget. It seems that Fine Gael wants to go down the same road, and I deplore that," he said scornfully.

Labour circulated the transcript of the exchange later. By this week, however, tempers had recovered as they chose to highlight the distance travelled by FG.

Two years ago, Mr McDowell said, Mr Noonan had pushed for a 35 per cent "middle" rate, effectively a top rate in disguise. "The refinement clearly makes a significant difference."

For now the social contract is "the big idea". With the clock ticking towards the next election. Mr Noonan accepts it will have to be sold.

"We will have to start putting out our stall quickly. We would be fairly convincing on some of them right now. But we can't wait until a campaign begins.

"It is very hard to convince the public in just three weeks about something like this. The credibility shutters come down once a campaign starts," he said.