As the 33rd Dáil approaches its final stages, a pair of prominent issues that surfaced this week exemplify the dilemmas faced by the ruling parties as they gear up for the impending election.
The first issue is that of the minimum wage on which the Coalition needs to take a stand, a decision that is bound to upset a certain section of the electorate. Even in an era where the treasury is sprawling with funds and the smart political move would be to avoid risky decisions, there are still tough choices that need to be tackled.
Ever since his promotion to the Cabinet, Minister for Enterprise Peter Burke has been sharply steering towards Fine Gael’s primary voters where business policy is concerned. His intent to lower the VAT rate to 9% for specific sectors of the hospitality industry was evidently included in his pre-budget proposal.
Although it’s highly unlikely that the Government will adopt this approach, Burke advocating for it has a clear political agenda. Fianna Fáilers have expressed their discontent, privately criticising the importance he is attributing to the matter. They suspect Fine Gael are eager to profile Finance Minister Jack Chambers as the stingy villain who shot down the proposal instantly.
However, when it comes to the decision Burke has to make on the minimum wage, it seems improbable that there will be a scapegoat readily available. Despite it being part of the budget process, Fine Gael is apprehensive that raising the minimum wage as suggested by the Low Pay Commission (LPC) will not sit well with their supporters.
During a vigorous performance on RTE’s Morning Ireland on Thursday, Burke pledged to back SME owners who operate from 5 am to 9 pm, as opposed to the customary 9 am to 5 pm. The notion of the SME voter clearly holds significant heft in the overall FG view (possibly more than it does in actuality). However, if he imposes another expense on businesses before the election, then no amount of sweet talk will do the job.
The LPC’s proposed increase in the minimum wage, which is less than the initial prediction of up to €1.20 – closer to 80 cent, could provide some relief to businesses, albeit minimal. Naturally, the government reserves the right to disregard or alter the suggestion, although this would be inconsistent with the protocol established since the LPC’s inception. A key question arises – would Micheál Martin, who positions Fianna Fáil as a slightly left-of-centre party, agree to this divergence?
Also, where do the Greens stand on this? An alternative approach could be for the government to use its significant funds to support businesses – whilst they have utilised such an approach in the past – is it sound strategy to motivate businesses to become partially dependent on state aid, fed by tax concessions and grants? In an economic slowdown, how can you counteract the downturn if resources have already been exhausted?
Recent data concerning housing inflation paints a dire picture: an 8.6 per cent rise in house prices, and according to a Savills study, the population is increasing at four times the rate of new house builds. The LPC, for which the Labour Party still claims responsibility, was established to depoliticise minimum wage decision making. But irrespective of Burke’s actions, this moment has significant political implications.
The second issue of the week highlighted in news – housing prices – shines a light on the government’s current limit in power in this phase of the election cycle. Despite considerable political efforts and financial investments in housing, the course is now decided. No last-minute alterations can be made – the battlefield now lies in a battle of credibility between the government and the opposition.
The recent statistics unveil a grim reality: house price inflation is at 8.6 per cent, and as per research by Savills, for every new house built, the population increases by four people. The SCSI discovered that even Government intervention in the form of shared equity cannot make typical homes in Wicklow and Kildare affordable for a nurse and a garda.
Rory Hearne, Social Democrats Candidate for Dublin North West, voiced his concern over the week, questioning how people earning average salaries can hope to own a home when the cost of houses is consistently drifting further beyond their means.
The feeling of despair felt by many individuals in regard to the existing situation is undeniable, with governmental options appearing sparse in this regard. The fluctuations in housing policy are gradual and lengthy, resembling geological transformations. When questioned about any surprise solutions the Coalition government may have up its sleeve, a governmental representative sarcastically responded this week, “Other than constructing additional homes and counting on the principles of supply and demand?”
Now entering the fourth year of a presumed shortened five-year term due to prospective early elections, the government has played its housing cards. This includes an increase in tax credits for renters and several other financial incentives likely to be introduced during the budget period. The First Home and Help to Buy initiatives championed by Darragh O’Brien will likely be maintained, as despite their flaws and enabling participation in a stretched and broken market, it turns potential buyers into property owners. This likely influences the decisions of undecided voters on their preference between the ruling government and the opposition party.
The opposition aims to cater to the fraction of the electorate whose aspirations are hampered, even with the introduction of these initiatives, adding pressure on them for a revolutionary shift. Housing is a significant political conundrum, as despite it being a forefront issue for voters, parties focussing primarily on housing, like Sinn Féin, have seen reduced momentum. Similarly, centre-left parties who place emphasis on housing are yet to show significant improvement in polls.
Perhaps it could be that voters, worn out and defeated, have lost confidence in the ability of politics to rectify the issue. Sinn Féin’s strategy relies on voters’ faith towards a commitment to deeper, structural reform rather than the government’s cosmetic offerings – in the hope of attracting enough voters to distinguish them from the ruling government. If their strategy turns out to be accurate, if underlying dissatisfaction bursts open and the balance tips, it might still influence the outcome of the general election.
Lacking the opportunity to change realities, this has become primarily a mental conflict to be fought by the government and opposition within the minds of the voters.