Risk-averse Opposition

It seems that it's an undisputed truth of electoral strategy that promising to raise taxes is tantamount to electoral suicide.  Hence Labour and the Greens making clear pledges against any increases in taxation at their respective conferences over the last couple of weekends.  The latter's stance was praised by one commentator as a mark of its wisdom and realism, reflecting its transformation from protest movement to potential party of government.

"Taxes are down and will stay down," declared Pat Rabbitte in his Saturday night speech.  He justified this by saying that "in a successful economy with buoyant revenues, there is no need to increase taxation and Labour has no intention of doing so."  Mark Brennock, in yesterday's Irish Times, endorses this approach as common sense:

Gone are Rabbitte's suggestions of recent years that taxes on wealth might be increased under Labour. The Government parties appear to have convinced voters that any tax increases - even on wealth and windfall capital gains - would cause grave economic damage. So ruling out all tax increases - even on wealth - is almost certainly the right thing to do electorally.

Rabbitte says that what is needed is not more taxation but fair taxation.  It might work as a soundbite but what exactly does that mean operationally?  The Labour leader's position echoes that of David Begg, General Secretary of the ICTU who acknowledged the aversion of most Irish people to the idea of tax increases:

The realpolitik of Ireland's situation is that we are not going to adopt the Nordic model anytime soon. Indeed, it would seem at first sight to be an impossible dream. A country whose people recently voiced enthusiastic support for improved provision for elder care, but who balked at even a mild increase in PRSI to fund it, would seem an unlikely candidate for such a transition. But some of this inconsistency can be explained by the legacy of an unjust tax system, which provided the wealthy with a plethora of tax shelters to avoid paying their fair share. People need to be reasonably certain that the tax system is fair and that money is efficiently and effectively used on their behalf. It will take time to rebuild confidence in this regard.

Rabbitte's weekend speech also reflects the fact the public is also disgusted by the sheer waste of taxpayers' money, hence his call for "genuine" public service reform from the next round of benchmarking.  There is an obvious if implicit attack on public sectors unions when he says that the public good will have to take priority over "vested interests".  The government's failure to deal with the 130,000 waiting list for driving tests were cited as one element in a bigger picture of massive government failure.  One wonders what any officials of Impact, the driving tester's union, made of this. 

So with the Rainbow parties all locked into keeping taxes low the government's regular attack lines on the opposition parties will have to be revised, a fact acknowledged by Finance Minister Brian Cowan when he welcomed Labour's belated conclusion that low tax rates had been the correct policy position all along.  Will bland centrism and risk-averse politics dominate the the now permanent campaign up to the next election?  Do parties matter at all, especially in the context of social partnership?  I will explicitly deal with those two questions in a series of forthcoming posts.

Comments

[EWI]

Rabbitte's weekend speech also reflects the fact the public is also disgusted by the sheer waste of taxpayers' money, hence his call for "genuine" public service reform from the next round of benchmarking.

Nice soundbyte by Rabbitte, but (i) there's a perception of public sector wastage, but anyone who's worked in a company should be able to discern that the real culprit here is bureaurcacy and (ii) what's he going to do about it? Pledges are nice before an election, but they often turn out to be hollow promises.