It appears that the public finances are not in the best of shape at present with sales and tax revenues diving. Former Taoiseach, Garret Fitzgerald, called last week for a mini budget. Was he correct in doing so? He was the leader of a coalition that had its own financial problems in 1982 when the budget of the then Finance Minister, John Bruton, caused the downfall of the government after Fine Gael lost the support of the independent TDs. The Green Party holds the key to the present Government.
A national Government with Richard Bruton, John’s brother, as Finance Minister would prove more decisive. What is the best thing that can be done? Brian Lenihan may be improving in office. The corporate fraud-squad raids on Anglo Irish Bank have bolstered the reputation of the government but not enough. A drop in top executive pay is also needed as paying €300,000 is excessive in today’s world of top bankers. Cuts at that end are badly needed.
Would the consultants and doctors, plus other highly paid professionals, take pay cuts too? People at the top-end can pay more as, in the old days, they used to pay super-tax. This was very high and, like in England, it was over 60 per cent of income. Are we going back that direction again after decades of lowering taxes.
Public anger suggests that more equity will be needed. Higher top-rate taxes and some form of property tax, as hinted by Fitzgerald, may be coming. The property tax will be unpopular but maybe unavoidable. Already, there is a modest second-home tax in place but we can expect this to jump soon.
Capital taxes may also rise. This is a tough time to be in Government. Maybe the burden should be shared and a national Government would bring more confidence. Last week, we had the public spectacle of the opposition parties attacking the new appointment of chief executive of the Bank of Ireland. The gentleman from Zambia got a tough baptism. The attack seemed excessive on a man, especially for one born outside the country.
Had they a better candidate? Ireland has some problems but the opposition seemed to be making more last week. But now there appears to be a change of heart after the Euro bank chief paid a visit to Dublin.
Journalist Fintan O’Toole put this point over very well on TV last week. He said we needed Fine Gael or Fianna Fail co-operating and that he liked the idea of them going together in Government. Charlie Flanagan of FG seemed very uncomfortable with the suggestion as did Minister Martin Cullen.
Neither party likes each other. Instead they have cat fights in public and create more damage in the process. Republicans and Democrats are doing the same in America. Where is it all going to end we wonder. Will a big problem need to happen before an EU intervention to save the currency?
The head of the European Central Bank was in Dublin this past week. Mr Jean Claude Trichet calmed nerves by pointing out that taxes do have to rise. Spending cuts were also necessary and the Irish could do it themselves.
It is a terrible conundrum but the public should be calling for a national government now. Good to hear from Fine Gael and Labour that there are some movements to get consensus on action. The public have had enough name calling and smart criticism. Action is needed. Demonstrations may release anger but will not fix things. Garret Fitzgerald’s intervention was very helpful and you could see that he was directing his comments to our Finance Minister.
Could he have helped turn the country around? President Obama is trying hard in America and we need to try every bit as hard. All the partied need to contribute. Maybe we should get Mr. Trichet to assist in a recovery plan with government and opposition thus taking politics out of it as well as the private and public sector row.