AT A time when the public is crying out for a clear sense of direction and decisive leadership, it is being fed conflicting and confusing signals by Government. Two weeks ago, as the Lisbon referendum campaign got under way, it decided to publish a long-awaited report by the Commission on Taxation. Why a contentious report that was guaranteed to antagonise a large swathe of society should be introduced in such a fashion remains unclear, particularly as the Government was in no hurry to seek the Commission’s recommendations earlier in the year. As a consequence, the outcome of the Lisbon Treaty and the national interest could be threatened.
Taoiseach Brian Cowen compounded the confusion by first welcoming the document as an important and timely contribution and then, last weekend, suggesting that implementation of its recommendations would be a long-term project. If the latter contribution represents an official reaction to public anger, then it casts a harsh light on the quality of strategic thinking and planning in Government.
A sense of uncertainty is a hallmark of this Government. Last year, it failed to recognise the signs of an imploding economy and its responses were late and inadequate. Its efforts to provide liquidity within the banking system is still a work in progress, even though it has decided to pay over the odds for property assets. Many senior bankers and executives who helped to fuel the property bubble by engaging in speculative lending remain in prominent positions. Declarations of Government concern in relation to unorthodox banking practices have long lost their capacity to impress.
Political focus is of immense importance at this time. The most pressing and important issue at stake is the quality of our future relationship with the European Union. The outcome of the referendum on October 2nd will have long-term political implications for how we are perceived within Europe. It may also affect inward investments and the speed of our economic recovery. Separate concerns, like taxation reform and the composition of the December budget, should not have been allowed to intrude on referendum issues.
It might be argued that publication of the Commission on Taxation report was necessary in order to support the Green Party’s demand for a carbon tax. Nothing could be further from the truth. A commitment to introduce such a tax was contained in the programme for government. And its implementation was reported on by the ESRI. The commission was asked to devise a low-tax system for the next decade that would be fairer and more robust than the model that presently operates. In making detailed proposals, it recommended that changes should be introduced as a package and in a manner that would not increase the overall tax burden.
The Government’s befuddled behaviour, however, in first publishing the report and then running away from its recommendations has generated uncertainty and worry. Does anyone believe that the Government will pursue €4 billion in salary cuts or redundancies in the public sector this December?