28 April 2013 Edition
Once upon a time, there was a party who got it right
Eamon’s and Enda’s world of fairytales
By the day, Fine Gael, Labour and Fianna Fáil are coming round to our way of thinking and even implementing some of our policies
JUST a short time ago, I was sitting with Peadar Tóibín in the most boring conference ever held when both our phones started to come alive with a Twitter feed. Now it wouldn’t have taken much to distract the two of us from the monotonous, grey-suited, grey-haired, grey-everything speakers at the top table but here was something interesting.
Eamon Gilmore was attempting to make a passionate defence of Labour and, in true cornered rat fashion, was getting stuck into Sinn Féin’s ‘fairytale’ economic policies.
Peadar Tóibín turned to me and said wryly: “It’s the last refuge of the scoundrel that – trying to deflect from your own failings by falsely labeling your enemies.”
How right he was.
The sole weapon used by Fianna Fáil, Fine Gael and Labour in their attacks on Sinn Féin economic policy is that it is ‘fantasy’ or ‘fairytale’.
How many times have you heard them say it?
How many times have you heard them say, ‘Well, actually, I fundamentally disagree with you on raising Capital Acquisitions Tax because that would in fact plug some of the deficit without harming the real economy?’
Wait – never?
That’s because they don’t engage with us on our actual policies. And also because they are, in fact, by the day, coming round to our way of thinking and even implementing some of our policies.
• Clueless – Finance Minister Michael Noonan and Minister for Public Expenditure and Reform Brendan Howlin
Unfortunately with these three parties, it’s economics for slow learners. The utterly conservative IMF has been quicker to arrive at the Sinn Féin analysis.
Now, you might be reading this and thinking, hang on, doesn’t she head up the team that writes a lot of our economic policy documents? Talk about biased!
How very dare you. I am the epitome of objectivity.
Even if I wasn’t, that doesn’t take away from the fact that our policies are in fact being implemented, not just in Ireland but across Europe.
In 2009, one year into the crisis, Sinn Féin produced three documents that would prove to be absolutely prophetic.
The jobs document said unemployment and emigration was the greatest challenge facing us. It listed dozens of measures outlining job retention proposals, a stimulus for the economy, and removing obstacles faced by businesses.
The Emergency Budget document said the deficit would be fixed quicker if adjustments were made that did not destroy the disposable income of low and middle-income earners. It proposed a range of fair tax increases on wealth (Capital Gains Tax and Capital Acquisitions Tax) and on income in excess of €100,000, as well as reducing the amount paid in tax reliefs. It set out savings in the health budget and in high-paid civil service salaries.
The banking document said that NAMA would end up being a gravy train for the legal profession, would nurse developers and allow them to retain high living standards, and was paying over the odds for bank loans.
It called for the nationalisation of AIB and Bank of Ireland, the winding up of Anglo and the smaller banks, and for the new state bank to focus on lending to business.
People in mortgage distress, it said, should be helped and the crisis should not be allowed to trickle on.
That was in 2009. All those documents were published.
In 2010, faced with the prospect of giving up sovereignty and going into an IMF/EU programme, the party set out a way to avoid this course.
We called for bondholders to be burned. We called for it so often I suspect people thought Pearse Doherty was personally carrying a special lighter around in his pocket with ‘For the bondholders’ engraved on it.
• Sinn Féin’s Pearse Doherty, Peadar Tóibín and Mary Lou McDonald have all called since 2009 for bondholders to be burned
There were sufficient reserves on hand in the state (€20billion in the National Treasury Management Agency cash reserves, €24billion in the National Pensions Reserve Fund) to take a break from the bond markets. During this time, the state could implement a jobs stimulus, bring in measures to reduce the deficit but not harm growth and introduce a bank resolution scheme.
We stood against the ‘Consensus for Cuts’ – the Fianna Fáil, Fine Gael, Labour troika (along with their faithful Green lapdogs).
They said if we went the Troika way, we’d get to a 3% deficit by 2014. Not a hope, we said. 2016 would be a realistic deficit target year.
They then said burning the bondholders would be sheer madness. The Labour Party tried to elevate themselves from Sinn Féin, claiming they were the only party to not vote for the bank guarantee. The fact that Sinn Féin gave the guarantee conditional support and then voted against the guarantee two weeks later when the conditions were published (and continued to vote against it even when Labour was extending it in Government!) is ‘semantics’.
The purpose of this little history lesson, mo chairde, is that we have been right since the beginning of this crisis and at an early stage we were influencing policy direction, even if some parties rolled back on promises after being elected.
By the 2011 general election, Fine Gael and Labour were claiming “not one more red cent” (Leo Varadkar) would be going into the banks and bondholders would take their losses. By the end of 2011, both parties had put €24billion into the banks and Enda was telling us we would not have defaulter stamped on our foreheads (it seemed the only stamp available in Enda’s office is ‘idiot’).
• Leo ‘Not One More Red Cent’ Varadkar
The two parties that said they would never implement Fianna Fáil’s property tax plan, are now implementing the property tax plan.
The two parties that said they would renegotiate the memorandum of understanding with the Troika are implementing pretty much the same memorandum – despite having a huge mandate to alter the agreement.
They don’t like us pointing this out. They don’t like talk of an ‘alternative’. That reminds them, and the public, that there are options. The best way to deal with these options is not to argue on their merits but to strategically ridicule them.
And ‘fairytale’ is born.
In reality, this fairytale is the one where the Emperor (the Government) has no clothes, so it keeps stealing Sinn Féin’s.
In mid-April, the Cabinet finalised its ‘stimulus’ package for jobs, paid for mainly from the National Pensions Reserve Fund. Sound familiar?
The last two Finance Bills – the bills that implement the budget – were full of Sinn Féin tax proposals:-
- Applying PRSI to share income;
- Reducing tax reliefs;
- Increasing CGT and CAT;
- Reducing the CAT thresholds;
- Taking low-earners out of the Universal Social Charge;
- Reducing the pension contribution earnings cap;
- Reducing mortgage interest relief against rent for landlords;
- Cracking down on tax evasion;
- Reducing non-residence loopholes;
- An excise rebate for transport and haulage businesses.
We proposed all this in our ‘fantasy’ annual Budget submissions. I can see a day where a Finance Bill recommends a wealth tax – which of course, will be the Government’s idea. ‘Sinn who?’
The Government has also brought in pay caps for civil servants. We proposed pay caps.
Examining the cost of drugs and the subsidising of private healthcare and private education is also on the table. We put it there.
Sinéad Ní Bhroin in Mary Lou McDonald’s office reminded me just recently that we secured an end to the special Top Level Appointments Committee (TLAC) pension terms for new-entrant Secretaries General and City/County Managers which enabled them to retire 10 years early on a full pension with an additional lump sum payment of on average extra €100k. Brendan Howlin admitted to not even knowing about the TLAC terms when Mary Lou first began to raise the issue with him.
We introduced legislation that removed these special provisions from pension legislation. We also politically forced Howlin to increase the Public Service Pension Reduction on pensions over 100k.
Outside of Government, we’re impacting on other agencies. Peadar Tóibín was rubbing his hands with glee when he saw that Bord Gáis have increased their borrowing from the European Investment Bank to invest in more wind energy. They know Peadar by his first name in the EIB. This was one of our proposals in last year’s Create Jobs, Create Growth document.
• The government doesn’t like talk of an alternative as it reminds them, and the public, that there are options
Pearse Doherty has collected an impressive few thousand parliamentary questions on NAMA. You could say he is obsessed with ensuring the agency performs for the taxpayer – and he’s getting results. He has pressured NAMA into increasing their level of investment on the island after discovering that they were actually investing more of their discretionary funding over in Britain (NAMA can forward money for developments to be completed so they can be sold off at better value – it creates jobs when they do that here).
Abroad, resolving banks the way we proposed has become the topic de jour. Last June, the EU accepted that Ireland should not have bailed out its banks and that bondholders should have been hit. The Sinn Féin policy of separating bank debt from sovereign debt is now on everyone’s lips, even if they are slow to implement it.
This is by no means a comprehensive list of what we’ve had implemented or influenced. Our jobs document proposed hundreds of innovative measures and we’ve produced lengthy Budget proposals annually since the crisis began, as well as effective legislation. And this is just on the economy.
Our opponents will keep dismissing us despite all of this.
They have to. But people aren’t stupid. When our economic TDs line up and articulate the compelling and fair proposals that we offer, Noonan, Kenny, Gilmore and Howlin can jump up and down as much as they like and scream ‘fairytale economics’.
The fact is – under Sinn Féin economic policy – there really could be a happy ever after.
» Joanne Spain is a Sinn Féin Senior Economic Advisor