PDs' radical agenda resets parameters of political debate

Fianna Fáil backbencher John McGuinness purported to reveal this week that the PDs were exerting "subtle" influence in government…

Fianna Fáil backbencher John McGuinness purported to reveal this week that the PDs were exerting "subtle" influence in government to the extent that they were diluting Fianna Fáil's "centre-left" political outlook. He suggested this has been going on for about a year, writes Mark Brennock

If this reflects a concern that is now emerging among some of his Fianna Fáil colleagues, one wonders where they have been since 1997.

The Progressive Democrats have been the most successful political party for a generation, not as a result of "subtle influence", but due to an open determination by the party not just to hold power but to change society in line with their openly and consistently stated outlook.

In the six years since 1997 they, more than anyone else, can claim credit for the transformation of the tax system, the shift towards individual economic endeavour rather than collective social development, and the clear shift in Ireland's external outlook away from Europe and towards the US.

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They have not just implemented elements of a political programme - they have made significant changes in the nature of Irish society. And with around four years left before they risk losing power again, they haven't finished.

Their success owes much to their own efforts, but they also had a lot of luck. Firstly, election results fell unbelievably well for them, giving them the opportunity to spend almost nine of the last 14 years in government.

Secondly, in 1997 they inherited an extraordinary healthy economy in the middle of the biggest boom in the history of the State. This made it easy to implement the popular parts of the project - tax cuts - without having to implement the less popular parts - cuts in services.

Thirdly, they had bedfellows in Fianna Fáil in key positions. Charlie McCreevy is the central proponent of what is seen as the PD economic project. Seamus Brennan, Martin Cullen and Dermot Ahern are also firm supporters of the project to free up business and individuals to earn money and keep it. Without them, the PDs would have remained a minor force in government. Without the PDs, these ministers would not have so comprehensively dominated Fianna Fáil's economic outlook. Together they have not only implemented a radical and coherent political agenda: they have shifted the centre of gravity of political debate.

Cutting the tax paid by individuals is the central and most easily understood part of the agenda. In 1997 they inherited personal income tax rates of 26 per cent and 48 per cent. They have cut them - as they said they would - to 42 per cent and 20 per cent.

The effect was predictable and is clear. The ESRI's Budgetary Perspectives 2003 shows that during the lifetime of the 1997-2002 Fianna Fáil/PD government, the top 60 per cent of earners gained substantially, while the lower 40 per cent gained well below the average (although, incidentally, the 1995-1997 period, when Labour's Ruairí Quinn was minister for finance, showed the same pattern).

This does not take into account the effect of the Special Savings Investment Account scheme, which has placed the better-paid at an even greater advantage.

Such unequal distribution is a typical by-product of successful liberal economic policies. However, the Tánaiste is fond of saying that "the best anti-poverty measure is a job", and that there are 370,000 more people at work than there were in 1997 - a continuation of a pattern begun in the early 1990s and which accelerated.

The "tax individualisation" policy introduced by the Minister for Finance, Mr McCreevy, and supported enthusiastically by the PDs, is a classic example of policy driven by economic rather than social considerations. PD influence undoubtedly helped ensure that the move towards a low 12.5 per cent Corporation Tax rate continued uninterrupted, and that the pace of privatisation was maintained.

The last-minute change to the Finance Bill, giving tax breaks to developers of private hospitals, was a McCreevy-PD move, deeply ideological in its encouragement of private health development rather than socialised medicine.

With the assistance of Charlie McCreevy and former minister Síle de Valera, the PDs have effected a remarkable shift in Ireland's position in Europe. Before 1997, it was a given that Ireland was in the pro-integration camp. John Bruton - an enthusiastic supporter of the further development of the EU project - was taoiseach and his Europhile position was the mainstream one.

Today, the positions adopted by John Bruton at the Convention on the Future of Europe are described as "extreme" by ministers. We are perceived as being with the British and the Danes on the frosty fringe of the European project rather than in the vanguard of it. Back then, ministers hailed the single European market as the main contributor to economic wellbeing. Now they are more likely to emphasise private US investment and resist "extreme" proposals emanating from Brussels that could place curbs - specifically, extra taxes - on business. This has undoubtedly fed into the Government's position on the war on Iraq.

The PDs' success is evident not only in policies implemented. It is also apparent in the fundamental shifts in the parameters of public policy debate.

Nobody now dares argue to put even a penny in the pound on either personal tax rate. Tax, in the public mind, is bad. In relation to Europe, it is no longer seen as a given that deepening integration is good for Ireland.

What is remarkable about analysing the changes effected by this Government is that it can be done without a reference to any role played by the Taoiseach. If Mr Ahern has a political core, it is widely believed by other politicians to be a social democratic one.

Yet surely it is inconceivable that, six years into this particular Government, someone with such a personal philosophy could have led a Government that has so successfully changed Irish society in the opposite direction.

Isn't it?