Next election may show Fine Gael has misjudged public mood again

The most notable feature of the budget is that electoral considerations trumped the long-term national interest on climate change. The only explanation for the rejection of expert opinion on the subject is that the Government is readying itself for an election and is not willing to court the limited level of unpopularity that increased carbon taxes would entail.

The entire budget was designed to cause the minimum of offence with something for everybody and an avoidance of bold decisions that might alienate any major interest group apart from the green lobby.

While it might be pushing it to describe the measure as an election budget it was certainly an each-way bet with enormous care being taken not to provoke any major interest group in society.

A feature of budgets down the years is that a small item, such as the famous rod licence, can come back to bite a government months later. There has been a determined attempt to insulate this budget from that kind of backlash but only time will tell if it has been successful.

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The whole emphasis is on spending, with massive resources being allocated to the two big burning issues of health and housing. Both are areas that certainly require more money but whether the increased allocations will improve the situation significantly in either case may be doubtful.

In particular the allocation of an extra billion euro to health following the overruns in the budget year after year is a serious cause for concern. The sheer scale of the increase in health spending each year without any obvious improvement in the service is something that cannot continue indefinitely.

Other increases in spending are designed to cover every possible base, with sweeteners for welfare recipients, pensioners, couples with young children and small improvements in after-tax pay for middle-income earners.

Pensioners

As usual pensioners fared reasonably well, because they have serious electoral clout, while young working people on middle incomes had very little to cheer about because there is no vocal pressure group to represent their interests.

It seems Fine Gael has taken a lesson from its last election budget in autumn 2015, when the emphasis was on tax reductions. That backfired in the campaign of February 2016, when Fianna Fáil successfully framed the debate about fairness and the main government party suffered an unexpected reverse.

The emphasis on spending programmes in this budget and the very modest reductions in tax indicate that Fine Gael is determined not to make the same mistake twice. The party might do well to remember the old adage that political parties almost always make the mistake of preparing for the next election on the basis of the last one.

It is now obvious to all that a significant increase in carbon tax is necessary to save the planet and its people

The failure to increase carbon tax may appear a clever move in purely political terms. A rise in tax on fossil fuel, particularly diesel, would certainly have provoked some negative reaction, but the way the issue has been ignored could well backfire politically as well as inevitably costing the country dear in the long run.

In the past week the UN Intergovernmental Panel on Climate Change has issued a warning about the catastrophic impact on the planet that will inevitably take place if there is not a serious change in the approach to global warming.

At a national level the Government’s own Climate Change Advisory Council and its chairman, John FitzGerald, have called repeatedly for an increase in carbon tax and Minister for the Environment Denis Naughten has publicly accepted that it should happen. Yet nothing was done.

Diesel tax

At the very least tax on diesel should have been increased to the same level as the tax on petrol given the damaging public health impact of diesel as well as its contribution to carbon emissions.

It seems this time around it was the Independent Alliance that vetoed any increase in tax on diesel and forced Fine Gael to agree to a pilot scheme for the absurd “granny grant” being promoted by Shane Ross. Raising the tax on diesel would have generated more revenue as well as doing something for climate change and a lot for public health.

Mind you, when diesel was given preferential tax treatment by the Fianna Fáil/Green Party government a decade ago, the health implications were already well known. When this was pointed out, one Green government adviser remarked tongue in cheek: “You know the Greens. Saving the planet is more important than saving people.”

Nonetheless, it is now obvious to all that a significant increase in carbon tax is necessary to save the planet and its people. Green Party leader Eamon Ryan naturally focused on the issue in his Dáil response to the budget, pointing out how the Government could have changed its approach to climate change across a range of areas, from housing to forestry and from electricity generation to agriculture.

Ryan insisted that the Irish people are ready, willing and able to do their bit, and he could well be right. It is an issue on which the Government may well have misjudged the public mood and it could come back to haunt them whenever the election is called.