Next week's Dáil debate will be the scene-setter for the drama to come before budget day, writes NOEL WHELAN
SIX WEEKS before he was elected president of the United States, Barack Obama received a top secret briefing from Mike McConnell, then director of National Intelligence, on the terrorism threats facing the US.
According to Bob Woodward in his new book Obama’s Wars, the most terrifying parts of the briefing focused on the unstable situation in Afghanistan and Pakistan. Candidate Obama listened intensely in characteristically calm mode. As McConnell finished up, Obama half joked: “You know, I’ve been worried about losing this election. After talking to you guys, I’m worried about winning it.”
One suspects that the budgetary briefing given to Opposition spokespersons by the Department of Finance on Monday had a similarly sobering effect.
Buoyed by a year and half of opinion polls in which Fianna Fáil has done extremely badly, Fine Gael and the Labour Party have had little reason to worry about losing the next election. However, the growth and deficit scenarios outlined to them in Merrion Street this week will have made them worry – a lot – about winning that election.
If either Opposition party had any enduring illusions about how difficult economic conditions will be for the next government, they have been shattered. The next election is the one to lose. Even if it does not come until mid-2012 there will be no appreciable economic recovery before polling day. The budgetary constraints on any government elected over the next two years will be at least as difficult as those faced by the current Cabinet.
Unlike current Ministers, a new Fine Gael/Labour, or indeed Labour/Fine Gael government will have a fresh mandate and won’t be burdened with responsibility for the economic mess. That, however, as Obama himself has learnt, will not insulate them from the public disenchantment that attaches to those governing in economically challenging times.
Before they get to deal with the challenges of government, however, both Fine Gael and Labour are about to face their toughest period in opposition.
Opposing the Government has been easy up to now. The scale of the banking and economic collapse has been so severe and the extent to which the public blame Fianna Fáil so acute that Opposition parties just had to scream and shout in tune with a public and media chorus of criticism.
Now things have changed. Endeavours at real cross-party consensus have failed, as predicted, but parties cannot simply return to politics as usual. The Opposition parties cannot unknow what they now know about the scale of the budgetary challenge. They will ultimately have to come to terms with its implications for their plans for government. More immediately they will have to deal with its impact on how they conduct themselves in Opposition.
In the next few weeks the public will come to appreciate the true enormity of the crisis in the public finances and the type of hitherto unpalatable policies required to address it. That will exacerbate the anger at the Government but will also lead to greater demands for detailed alternatives from the Opposition.
Some in Fianna Fáil have convinced themselves that framing the four-year fiscal plan presents an opportunity to redeem their electoral standing. As they see it, by designing a tough and credible plan they can show themselves more realistic and relevant than the alternative. They are fooling themselves. It is too late for all that. The public view of the party is largely fixed until after the next election. A tough, frontloaded and imaginative four-year plan would be in the national interest and may accrue to Fianna Fáil’s benefit in the medium to long-term but its impact on the party’s standing in the short-term can only be marginal.
The situation is different for Fine Gael and the Labour Party. The decisions they make over the next few weeks have the potential to impact dramatically on their support levels.
Fine Gael has watched momentum shift to Labour in recent months. All indications are that Enda Kenny will seek to regain the initiative by adopting a responsible approach to the fiscal crisis. They have quickly reiterated their support for reducing the deficit to 3 per cent of GDP by 2014. It looks like Fine Gael will publish detailed, costed proposals on how that is to be done over four years. As Michael Noonan implicitly acknowledged on Thursday, it is politicians who ultimately have to make the judgment calls.
Labour has also this week reiterated its support for deficit reduction to 3 per cent by 2014. If it sticks to this it will be significant. Even that, however, will no longer be enough for the party to retain credibility. The context of public debate is shifting. The level of media scrutiny of the Labour Party has also intensified. It will be difficult for Gilmore, Burton and their colleagues to come through this process unscathed. If they stay vague they will lower themselves in the eyes of many economic and political commentators and some of the electorate. If Labour signs up for draconian welfare, tax and spending proposals it risks alienating its newer support.
The Cabinet has cut short its bank holiday break for further meetings to consider its narrowing options. The Dáil will give over most of its shortened timetable next week to a special pre-budget debate. This will simply be the scene-setter for the real political drama to come as budget day approaches.