Fine Gael and Labour have reached unprecedented agreement on all major tax matters but continuing confusion on stamp duty will dog them unless they give a firm date for change, suggests Stephen Collins, Political Editor
The detail of the joint Fine Gael-Labour agenda on tax and jobs was overshadowed somewhat by questions about the timing of their proposed stamp duty reforms. All the other commitments in the key policy document of the alternative government's election campaign, published yesterday, played second fiddle in the continuing controversy over timing of any stamp duty changes.
The fact that the emphasis was not on the commitment of the parties to cut the lower rate of tax, or to provide considerably more tax relief for one-income families than the present Government has chosen to do, was frustrating for the two party leaders, Enda Kenny and Pat Rabbitte, who both emphasised the historic nature of their joint policy platform on the economy going into the election campaign.
The two men refused to be drawn on precisely when the stamp duty issue would be addressed during the lifetime of the government, if they win office, but they accepted that it would be done in one fell swoop and that it would be a priority item.
The failure of Enda Kenny and Pat Rabbitte to follow the logic of their own argument and simply commit themselves to the introduction of the stamp duty changes in their government's first budget only fuelled the flames of speculation and allowed their opponents to suggest that it might not happen until year five of any Fine Gael-Labour government. The clear intention is that the issue will be dealt with in the first budget but they are already under great pressure to spell it out.
The withering criticism by Minister for Finance Brian Cowen of Fine Gael's initial proposal to phase in stamp duty changes over three years probably encouraged agreement between the two alternative government parties that the matter would have to be dealt with in one budget. However, by not making their timetable clear they left themselves open to another jibe from Brian Cowen.
"On stamp duty, Fine Gael's daft proposal to introduce change over three years has been ditched in favour of a pure fudge which promises up to five rather than three years of uncertainty," said Cowen, who maintained it would damage the property market.
He still appears dead-set against matching other parties in the stamp duty auction, but the signs are that he is holding some inducement for first-time buyers up his sleeve for later in the campaign.
One of the reasons both Kenny and Rabbitte gave for not spelling out when stamp duty would be abolished was the etiquette of budget announcements. Fine Gael and Labour might be well-advised to forget their financial manners and make it crystal clear to the voters that they propose to deal with the issue in their first budget. Anything less will be a recipe for confusion.
To some extent, though, the focus of the Government parties and the media on the stamp duty issue is a reflection of just how well Fine Gael and Labour have managed to mesh their policies in the wake of the Mullingar accord. They have disproved initial claims by Fianna Fáil that they had different and incompatible views on a whole range of issues, including corporation tax and capital gains tax.
Instead the two parties have performed the unprecedented feat of agreeing all their major tax and spending plans in advance of the election. Both parties are agreed that there will be no increase in either corporation or capital gains tax and they are both committed to the reduction of the standard rate to 18 per cent as well as the indexation of the bands and an extra tax allowance of €5,000 for one-income families.
The detailed agreement means that not only can they present a united front to the voters but that if they do get into power, they will have sorted out the important bones of contention beforehand. The Fine Gael-Labour governments of the 1970s and 1980s were bedevilled by ongoing squabbles about the basic thrust of economic policy. If they make it into power again they should have a clear unity of purpose on all these important issues.
Brian Cowen maintained that the plan was not as generous to low-income earners as the Fianna Fáil tax plan and he also claimed that the Fine Gael-Labour spending plans would mean that the national debt would start to rise by the end of their term of office. Whether those criticisms are valid or not, the remarkable thing is that the tax and spending plans of the alternative governments are actually quite similar. The Fine Gael-Labour coalition has adopted a relatively prudent approach to the national finances, even if its spending plans appear to be a bit more generous than those of Fianna Fáil.
The Opposition will now try and move the debate on to the quality of public services, where they sense the Government is weakest, rather than having it on the economy where the Fianna Fáil-PD coalition has a record of achievement over 10 years that has resulted in unprecedented prosperity.
The credibility of the Fianna Fáil response yesterday was blunted by a publicity stunt designed to deflect attention from the Fine Gael-Labour plan. Copying American negative electioneering techniques, Fianna Fail staged a so-called "pre-buttal" press conference to attack the plan before it was even announced. This was rightly described by Senator Brian Hayes of Fine Gael as embarrassing, and all it did was to take away from the more considered critique of the actual plan by Brian Cowen later in the day.
With their major joint policy platforms on the economy, health and crime now published, Fine Gael and Labour will proceed with individual policy documents.
With Fianna Fáil also producing sectoral policy documents every second day it looks as if most of the election policies will actually be published before the Taoiseach even names the day.
Most TDs, including Ahern's own Fianna Fáil colleagues, are hoping that he will take them out of their misery and dissolve the Dáil sometime next week so that the election proper can begin.