How the government has fared, compiled by HARRY McGEE
BANKING
PROGRAMME FOR GOVERNMENT PROMISE
“We will seek a reduced interest rate as part of a credible recommitment to reducing Government deficits to ensure sustainability of our public finances”
AND WHAT HAS HAPPENED SO FAR
France, and to a lesser extent Germany, demanded that any reduction in the interest rate conceded to Ireland would have to be matched by changes to the State’s 12.5 per cent corporate tax. TheGovernment sought a 1 per cent cut, yielding €450million in savings per annum.But on June 8th, the Taoiseach told the Dáil that any reduction would only apply to funds not drawn down (€24billion as opposed to almost¤40billion).Heand Minister for Finance Michael Noonan also hinted that France and Germany have effectively vetoed any change. Both said corporation tax ismore important. .
PROGRAMME PROMISE
“The Government accepts that enabling provisions in legislation may be necessary to extend the scope of bank liability restructuring to include unsecured, unguaranteed senior bonds”
AND WHAT HAS HAPPENED SO FAR
“[The European Central Bank in] Frankfurt would not agree to sharing with the bondholders,” Michael Noonan said on April 1st. Yesterday, Noonan said the Government would seek to impose losses on senior bondholders in Anglo Irish Bank. He said around €3.5bn of senior unsecured, unguaranteed bonds issued by Anglo and Irish Nationwide should have losses imposed on them.
PROGRAMME PROMISE
“We will seek to replace emergency lending to our banks with medium-term, affordable, official financing”
AND WHAT HAS HAPPENED SO FAR
ECB would not agree to it when results of bank stress tests were announced in March. However, Michael Noonan pointed to a line in the ECB statement that promised “ongoing” funding at 1 per cent and contended “ongoing” was another word for “medium-term".
PROGRAMME PROMISE
“We will end further asset transfers to Nama, which are unlikely to improve market confidence in either the banks or the State”
AND WHAT HAS HAPPENED SO FAR
This was agreed in the revised agreement with EU-IMF in May, ending further loan transfers to Nama. It accepted that the “Nama II” transfers would not go ahead at present and required the banks tocome up with an alternative for deleveraging these loans.
PROGRAMME PROMISE
“The new Government will restructure bank boards and replace directors who presided over failed lending practices”
AND WHAT HAS HAPPENED SO FAR
On publication of the Nyberg report into banking in April, the Minister for Finance said he had asked bank chairpersons to provide a “board renewal plan”, replacing directors in place prior to bank guarantee in September 2008. AIB had already done so, he said.
PROGRAMME PROMISE
“We will establish a Strategic Investment Bank.”
AND WHAT HAS HAPPENED SO FAR
No action so far.
PROGRAMME PROMISE
“The new Government supports the objectives of the EU/IMF programmeof support, ie restructuring and recapitalising the banking system, achieving fiscal stability and returning the Irish economy to growth”
AND WHAT HAS HAPPENED SO FAR
Less than three weeks after it assumed power, the Government announced that stress tests had concluded overall further future exposure of banks was at €24 billion, less than provided for in worst case scenario projections. Michael Noonan announced the creation of two pillar banks, AIB and Bank of Ireland, with other institutions being merged or wound down. Anglo Irish Bank would cease to exist. He conceded that there would be no haircuts for senior bondholders or medium-term financing. Noonan said the pillar banks would provide €12 billion in credit to small and medium business each year.
JOBS
PROGRAMME PROMISE
“We will –within the first 100 days – resource a jobs fund”
AND WHAT HAS HAPPENED SO FAR
Initially billed as a jobs budget by Fine Gael pre-election, Enda Kenny promised 20,000 jobs a year for five years. Following discussions with the EU-IMF it was billed as revenue-neutral with more modest ambitions. Some 15,000 places in training and a raft of other measures are promised. Government would not predict overall job creation numbers. Funding for the initiative would come from the new levy on private pensions.
PROGRAMME PROMISE
“Reverse the cut in the minimum wage”.
AND WHAT HAS HAPPENED SO FAR
This was announced as part of the jobs initiative and included in the Social Welfare Bill
PROGRAMME PROMISE
“We will abolish the €3 travel tax subject to a deal being agreed with Ryanair and Aer Lingus to re-open closed routes”
AND WHAT HAS HAPPENED SO FAR
Abolition planned under the jobs initiative but without preconditions
PROGRAMME PROMISE
“Accelerate capital works that are ‘shovel ready’ and labour intensive, including schools and secondary roads”
AND WHAT HAS HAPPENED SO FAR
Budgets more modest than set out by Labour and Fine Gael pre-election but part of jobs initiative.
PROGRAMME PROMISE
Fine Gael jobs strategy New Era was included in the programme. Fine Gael said the creation of new utility companies, including a State water company, natural resource companies and alternative energy companies could create up to 100,000 jobs. It promised a budget of €7 billion, €2 billion of which would come from the sale of non-strategic State assets.
AND WHAT HAS HAPPENED SO FAR
Fergus O’Dowd appointed Minister of State with responsibility for implementing this policy. But given that the EU-IMF wanted some of the proceeds from the sale of State assets to go to service debt, there are doubts about the overall programme.
LABOUR MARKET
PROGRAMME FOR GOVERNMENT PROMISE
“We will reform the Joint Labour Committee structure... Reform options will examine the rate of pay for atypical hours.”
AND WHAT HAS HAPPENED SO FAR
Richard Bruton brought proposals to Cabinet which have been subject to sustained criticism from Labour Party backbenchers over the past three weeks.
SALE OF STATE ASSETS
PROGRAMME PROMISE
”We will target up to €2billion in sales of non-strategic state assets drawing from the recommendations of the McCarthy Review Group on State Assets when available.”
AND WHAT HAS HAPPENED SO FAR
The McCarthy report did not recommend a firesale. The Government insisted proceeds from disposals could be used to fund the“New ERA”stimulus plan but in April, the EU-IMF revised agreement seemed to suggest the realised funds could only be used for debt reduction: The Government says it can agree with EU-IMF on a case-by-case basis to use funds raised as either a stimulus or to pay off State debts.
PUBLIC SPENDING AND FISCAL MEASURES
PROGRAMME PROMISE
“As part of our fiscal strategy, the new Government will...conduct a Comprehensive Spending Review to examine all areas of public spending and to assess effectiveness of spending programmes . . .”
AND WHAT HAS HAPPENED SO FAR
The IMF and EU agreed to its inclusion and that savings identified might be used to offset other cuts or taxes. The review is underway and will report in September.
PROGRAMME PROMISE
“The new Government will . . . keep the corporate tax rate at 12.5 per cent”
AND WHAT HAS HAPPENED SO FAR
The Government has refused to concede any ground on what it calls a cornerstone of Irish economic policy.
PROGRAMME PROMISE
“The new Government will. . . maintain the current rates of income tax. . . We will not increase the top marginal rates of taxes on incomes”
AND WHAT HAS HAPPENED SO FAR
On June 9th in the Dáil, Minister for Finance Michael Noonan cast some doubt on this promise: “I am not going to rule out any tax initiative, or any tax increase or any tax reduction,” he said.
SITE TAX AND WATER CHARGES
PROGRAMME PROMISE
“Consider, arising from the previous government’s deal with the IMF, various options for a site valuation tax. Any site valuation tax must take into account the significant number of households in mortgage distress and provide local government with a reliable stream of revenue . . . We will introduce a fair funding model to deliver clean and reliable water . . .The objective is to install water meters in every household and move to a charging system based on use above the free allowance”
AND WHAT HAS HAPPENED SO FAR
In early June, the Minister for the Environment Phil Hogan announced the introduction of a household utility charge, a form of flat rate property tax that would fund local authorities. He said water charges would not be introduced until water meters were installed. Fianna Fáil said the household utility charge also had a water charge component, a claim rejected by the Minister.
EDUCATION
LABOUR PARTY PROMISE
Labour made third level funding one of its core issues in election campaign. Eamon Gilmore and Rúairí Quinn pledged their opposition to the €500 increase in student contribution fee in the election campaign.
AND WHAT HAS HAPPENED SO FAR
Early this month Mr Quinn said he could not rule out any new fees or charges, because of new facts showing the scale of the national debt. Accused by opponents of a U-turn. Mr Quinn defended the change on this basis: “Michael Collins, the first minister for finance of this State, had more room to manoeuvre than his successor as minister, Deputy Michael Noonan, has today.’’
PROGRAMME PROMISE
A review of the patronage system in primary schools where the Catholic Church retains control of a majority of schools.
AND WHAT HAS HAPPENED SO FAR
Rúairí Quinn has been one of the busier Ministers. A very early innovation, though a final decision on changing patronage will be contingent on a consultation process.
CONSTITUTIONAL REFORM
PROGRAMME PROMISE
“We will introduce a package of changes that will bring about a 50 per cent increase in Dáil sitting days . . .We will significantly reduce the size of the Oireachtas by abolishing the Seanad, if the public approve in a constitutional referendum, and we will reduce the number of TDs . . . We will introduce the necessary legal and constitutional provisions to ban corporate donations to political parties . . .” The programme for government also promises referendums on the abolition of the Seanad, reducing judges’ pay and allowing Oireachtas committees to carry out full investigations.
AND WHAT HAS HAPPENED SO FAR
The Minister for the the Environment published legislation in June encompassing many of the measures. One unexpected addition was a new requirement for political parties to have a minimum of 30 per cent women candidates, otherwise they would face financial penalites. The ban on corporate donations did not materialise. The Constituency Commission was asked to redraw constituencies with a view to reducing number of TDs by as many as 20. The proposal to abolish the Seanad will now form part of the Constitutional Convention and is likely to be held in 2012, a little later than promised.
Yesterday, Enda Kenny told the Dáil three referendums would be held with the presidential election in October – one on cutting judges' pay, another on giving Dáil committees more investigative powers, and a third on protection for whistleblowers.
POLITICAL REFORM
PROGRAMME PROMISE
“We will end the automatic right to State cars for former office holders and other state officials”
AND WHAT HAS HAPPENED SO FAR
State cars are now limited to the Taoiseach, Tánaiste and the Minister for Justice, Equality and Defence. Other Ministers supply their own car and can employ a civilian driver.
PROGRAMME PROMISE
“Ministers’ salaries will be reduced”
AND WHAT HAS HAPPENED SO FAR
This was implemented very soon after the new Government took office. TheTaoiseach’s effective salary is now €200,000 – some €108,000 less than it was when Bertie Ahern was in office
HEALTH
PROGRAMME PROMISE
“The HSE will cease to exist . . . A system of Universal Health Insurance will be introduced by 2016”
AND WHAT HAS HAPPENED SO FAR
Minister for Health James Reilly has moved quickly. Board members of the HSE have resigned and some key responsibilities have been brought back within the remit of the Department of Health. The VHI chief executive resigned after meeting the Minister, who wants the State health insurance company to be split into three. Reilly also set up a “special delivery unit” to cut hospital waiting lists.