There is a well-known phrase that goes along these lines: He who has the gold, makes the rules.
After more than a decade holding onto the nation’s purse-strings, Fine Gael relinquished the role of Minister for Finance to Fianna Fáil TD Michael McGrath late last year as part of the changeover of Taoiseach.
McGrath tried to stamp down his authority this week, telling reporters that he would not be “bullied” into budget demands by Coalition partners. This followed a decision by three Fine Gael junior ministers to publicly call for a tax break of €1000 for middle income earners.
But while McGrath may hold the keys to the vault, the attitude among Fine Gael TDs is this: we fixed the mess that Fianna Fáil made, and we will reap those rewards come hell or high water. There is more than a hint of bitterness among the Fine Gael party faithful that just as billions and billions begin to roll in with huge projected surpluses, it is Fianna Fáil who may get the credit for letting the good times roll again.
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None of that explains the timing of the early budget kite flying, though. What is actually happening behind the scenes is that there is a “period of reflection” underway inside the Department of Finance.
The recently published Stability Programme Update predicted budget surpluses totalling some €65 billion over the next three years, largely driven by huge increases in corporation tax receipts. Mr McGrath has told colleagues that he will take some time to consider the best way to spend and save this money, and Coalition figures appear to be under the impression that this period of reflection will last six weeks.
The Fine Gael junior ministers’ demands came right smack bang in the middle of this six-week period. In a few weeks’ time, McGrath will go to Cabinet with a memo detailing his plans for the surpluses. There is clearly a time pressure on politicians to have their voices heard around what they want to see for Budget 2024 and beyond.
There is also a deeply political dimension to the war of words that has erupted between the two parties.
Fine Gael are under pressure electorally in various constituencies around the country, and they know it. This week, David Stanton became the fifth Fine Gael TD to announce his departure in recent months, leaving the party with the task of finding replacement candidates before a general election that could come next year. The day was always going to come when, with an election looming, the old Civil War parties would have to strike out and fend for themselves, and try to shore up their own vote.
For Fine Gael, they have always prioritised income tax cuts for the “squeezed middle” as their key policy commitment. Fianna Fáil have historically favoured a 2:1 split in favour of investment in public services. The Green Party’s goals are obvious.
In truth, actual negotiations for Budget 2024 are a long way off.
The next big set-piece will be in July, when the Government will publish the Summer Economic Statement, which sets out the broad parameters of what is available for the budget. After this, there will be a brief lull over the summer recess and towards the end of August, the actual substantive Budget 2024 talks will begin.
In the meantime, expect many budget kites to fly, and expect many such kites to be torn down in the battle of wills between the Coalition parties. The political cost of such sniping could be a little more serious, however, if Fianna Fáil continue to feel fundamentally undermined.
To finish on another apt quote, this time from Ralph Waldo Emerson: Money often costs too much, and power and pleasure are not cheap.
