The tensions within Irish society have been held at bay by the sense of never having had it so good, writes Fintan O'Toole.
FOR ALL but one of the last 15 years (the exception being the aftershock of the 2001 attacks in the US), we've lived in a bubble. The problems we've been willing to discuss have been the problems of growth: bad planning, an overburdened infrastructure, personal and social stress. The tensions within Irish society have been held at bay by the sense of never having had it so good, or, more recently, by the fear of bursting the bubble. All interest groups could be bought off, to one degree or another, with public money. We could use our new wealth not to make choices but to avoid them.
Inside the bubble, you could forget that a lot of what happened to us from the early 1990s onwards was sheer dumb luck. Governments and social partners did a lot of things right, but some of the conditions that created and sustained the boom were beyond our control. The long IT-led expansion of the world economy in the 1990s filled a huge pool of capital looking for opportunities to invest. Irish demographics delivered a massive bonus. Both in absolute and proportional terms the working-age population rose to its highest ever levels. In 1971, the proportion of the population that was between 18 and 64 was just 58 per cent. It is now 68 per cent, and this demographic shift has delivered, for governments, the windfall of fewer dependants to be supported and more workers to support them.
These conditions did not result from choices Irish governments had made and in fact they took away the urgent need for hard political choices. The job of a minister for finance has been little more demanding than that of a tester in a mattress factory. Budgets have been a doddle. Employment has risen from 1.2 million in 1995 to 2.1 million, bringing huge increases in revenue. The tax take rose from less than €16 billion in 1996 to over €47 billion in 2007. The national debt has fallen from nearly 75 per cent of GNP in 1996 to less than 25 per cent and the cost of servicing it has fallen from nearly 20 per cent of tax revenue to 5 per cent. Between 1998 and 2007 the overall unemployment rate, and its heavy drag on the public finances, halved from 8.5 per cent to 4.2 per cent.
In these extraordinary circumstances we had Gay Byrne government. There would always be something for everyone in the audience. Like Robin Hood on ecstasy, governments could give to the poor without taking from the rich. They could hand out tax cuts which favoured the better-off while providing real (if relatively modest) increases in social welfare. They could simultaneously reduce debt and increase spending. They could waste vast amounts of money on whimsical and idiotic projects without having to face any real consequences. They could concede at least a little to all interest groups.
With the ESRI now forecasting GDP growth of less than 2 per cent this year, a rise in unemployment to 6 per cent and no net increase in jobs, the bubble has finally burst. A political leadership that has been able, for over a decade, to operate on cruise control is now being forced to take the wheel and steer a course. Choices are becoming unavoidable.
In theory, this might be the upside to the downturn. Having it easy has made government lazy, arrogant and wasteful. Bold decisions like setting up a universal pre-school system have simply been ignored. Big targets like eliminating consistent poverty have been abandoned because they are too damn hard. An extreme ideology of privatisation has been allowed to take over the health system, largely by default.
A serious response to global warming has been endlessly postponed. So the new obligation on government to set priorities, spell out tangible goals and decide who will pay for them might not be a bad thing.
Except that we can see already that, as in the late 1980s, the "hard choices" are going to be inflicted on soft targets. We've seen the start of this process over the last year. Who is paying the price? The elderly, who are having homecare packages withdrawn. Children in poorer urban areas, whose subsidies for crèches and playgroups are being withdrawn. Multiple sclerosis sufferers, whose home assistants are being withdrawn. Parents of children with intellectual disabilities, who are being told that they will have to pay for long-term residential care. Children in some of Europe's largest primary school classes, which are going to get larger as Mary Hanafin's pre-election promises are abandoned. People in smaller towns whose hospital A&E units will, Brendan Drumm announced recently, be closed if he cannot find cuts elsewhere.
These are portents of what is to come. There will be a lot of blather about "painful readjustments", but none of it will be from the people who are really feeling the pain. They'll know that when sacrifices have to be made, their betters will bite their lips, brush a tear from their eyes and push them to the front of the queue.