Fianna Fáil plans for spending big on services

Fianna Fáil was first out of the manifesto blocks on Monday, publishing a 200-page document at an event in the Smock Alley Theatre in Dublin city centre.
It’s a plan for a continuation of the extraordinarily good economic fortune that Ireland has enjoyed since the recovery after the last financial crash. That recovery has been turbocharged by a remarkable and sustained surge in corporation tax revenues in the past decade, largely driven by a handful of multinational companies in technology and pharmaceuticals which have utilised to the full Ireland’s friendly tax laws, educated workforce and European Union membership.
Revenues from corporation tax have grown from €5 billion a decade ago to about €27 billion this year, excluding the one-off Apple tax. For context, it is costing about €100 billion to run the State this year.
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Fianna Fáil’s manifesto is a plan to use the proceeds of continuing success. It contains plans for an extra €60 billion in spending over the five years of the next government, above current levels, funded by additional tax revenues, the Apple tax and the sale of bank shares.
It promises more investment in housing, infrastructure, public services – both current and capital – delivering more doctors, more gardaí, smaller classes and so on. Every party will have its own version of these promises. All, like Fianna Fáil on Monday, will promise that they are fully costed by the Department of Finance.
Just as important as the question of what the parties want to spend the money on, though, is what they would do if the money ceased to roll in – or at least, ceased to roll in at the current rate. In the aftermath of Donald Trump’s victory last week, that prospect must look a little closer.
Micheál Martin said that protecting public services would be the priority, pointing to the savings funds established by the outgoing administration. A sustained slowdown in corporation tax wouldn’t be long getting through that, though.
Soon after the Fianna Fáil document was published, a statement arrived in from Fine Gael monstering their current partners in government. “Full of uncosted promises with little substance,” sniffed Helen McEntee, decrying the “type of back-of-the-matchbox-style politics that really could set Ireland backwards and scupper the economic progress that we have made in recent years.”
The early days of the campaign have featured quite a bit of this tit-for-tat between the two main parties of government, as they try to differentiate themselves from each other. The fights escalated on Monday, over the Fianna Fáil manifesto and Fine Gael’s continuing Michael O’Leary-induced woes. An election fight dominated by Fianna Fáil and Fine Gael suits nobody as much as Fianna Fáil and Fine Gael. But it’s unlikely to last.