As the current president of the European Commission Jean-Claude Juncker said a few years ago, knowing the right thing to do is easy. The hard part is getting re-elected after you've done it.
Juncker is not a good role model for any politician, especially on tax matters. But lots of Irish politicians ruefully will be thinking the same thing this year, since we are now a maximum of 15 months out from the next general election.
The temptation for the government to do whatever it takes to get themselves re-elected will be overpowering, whether it's right for the country or not. The signs are already emerging that if it means throwing money we don't have at the voters, then that's what this government will do.
This is the kind of stuff Ireland got up to in the bad old Fianna Fail days as the boom gathered momentum. The present government is meant to be above what came to be known as the "auction politics" used to buy elections back then. But are they?
In the past few weeks they have been making extravagant promises to voters which add up to a huge amount of extra state spending. It's all designed to make voters feel better about the future and decide to stick with the present government in the upcoming election rather than risk everything on economic illiterates like Sinn Fein or a ragbag of independents.
Fianna Fail is claiming that the cost of all the promises by the government since the start of the new year add up to €3.5 billion in extra spending outside what was allowed for in the budget. The promises include cutting the public service pension levy, reversing public sector pay cuts and reducing the Universal Social Charge. There have also been hints about increasing the minimum wage, cutting the top rate of income tax and giving some help to working parents on child care costs.
The government is saying that all this can be done because we will have strong economic growth this year and next year which will produce extra revenue to pay for it. But of course that is far from certain.
If we lash out this kind of cash and then we don't have enough growth we could fail to reach our three percent budget deficit target at the end of this year. And that would be a disaster, after all we have been through.
So what is the background to the promises now being made? There are almost 290,000 state employees in Ireland and that's a big block of votes, enough to be a significant factor in the outcome of the election.
To get them on side, the government is making noises about reversing the seven percent public sector pension levy that was introduced at the height of the crisis back in 2009. During the crisis the state workers were also hit with a pay cut of over six percent, so the overall impact was severe enough.
It was done because our public sector workers are among the best paid in Europe and we simply did not have the money at the time to maintain their salaries and their generous pensions. We still don't have the money, in spite of the recent modest recovery in the economy and the improvement in tax revenues.
But that won't stop the government, particularly the Labour Party, which traditionally got many of these votes, from throwing enough money at the sector to reverse the cuts.
The pension levy was imposed to get the state workers to pay a little more towards the astronomical cost of pensions in the sector. It's worth remembering that their guaranteed pensions of around half final salary are incredibly valuable, particularly at a time when so many of the workers in the private sector have seen their pensions shrink, or even collapse altogether.
State workers only pay a small fraction of what it would cost to finance their pensions on the open market. A good pension was always part of the attraction of a state job.
And it's not just pensions. The average pay levels in the public sector climbed dramatically before and during the boom until they were up to 50 percent higher than average pay in the private sector.
The pension levy and pay cut imposed on the public sector workers were a necessary corrective, at a time of great financial difficulty. They have only slightly reduced the pay gap between state workers and other workers.
So using the improved tax revenue from our modest economic recovery over the past year or two to again feather the nest of public sector workers for the sole purpose of buying their votes in the next election is completely unjustifiable. Yet it looks like it's going to happen.
In most countries in the West average earnings in the public sector are lower than in the private sector, and that used to be the situation here until we invented "social partnership" over 30 years ago to stop unions going on strike. These non-strike productivity deals did not produce much productivity, but they did produce massive pay rises.
The lower pay in state jobs in the old days used to be justified by the greater job security state workers had and the good pensions they were guaranteed. That should still be the case, but in fact the present situation is that state workers have both high pay and job security and guaranteed high pensions. Hey, this is Ireland, we don't follow logic or economics here!
The public sector unions (the only area of the economy where unions are still strong) have an argument to justify the gap. They say that the 50 percent extra in pay is simply a reflection of the higher qualifications and skill levels state workers (like nurses, teachers, etc.) have compared with workers in the private sector.
But if that was true the same size pay gap would exist in other countries in Europe and it doesn't. The fact is that the public-private pay gap in Ireland is much bigger than in other countries.
Having said that, there are many state workers in Ireland who are on modest pay. The problem is that there are far too many in the middle and top levels of the state services who earn far too much.
The pressure from state workers to have the cuts imposed on them reversed is only part of a wider pay story here. There is now a general move for all workers across the private sector to get a pay rise this year, in recognition of the slight recovery in our economy. Given all the tax hikes, property tax and water charges they now have to cope with, there is strong pressure for all workers to get something back.
It's arguable that some companies here, particularly those who are strong in exports, are now in a position to meet these demands. But there are many others who can't because they are still struggling to make a profit.
Similar to that group is the state itself. Even though we are on target to get the deficit down to below three percent this year, the fact is we are still borrowing up to €800 million every month to keep the country going.
Instead of trying to get into budget surplus as fast as we can to start paying down some of the debt, our politicians are shaping up to spend a lot of money to buy votes. That's what politicians do. It's all about staying in power.
Instead of reversing the cuts for state workers, what the government should be doing is easing off on the tax burden for everyone. Minister for Finance Michael Noonan was all smiles on TV here recently when he announced that the latest figures show that last year's tax take was €1.24 billion higher than had been built into the budget figures, due to the recovery in the economy.
That stronger than expected tax revenue growth is continuing, and it will mean that we should have no trouble getting the deficit down below the target three percent by the end of this year. In fact the government is saying it will hit 2.7 percent.
That is good news. But there are two ways of looking at it. It may be good for the state finances, but it shows just how much tax is being drained from ordinary taxpayers, which is not good for them.
We have among the highest rates of income tax not only in Europe but in the world, when you add together the various ways we pay. Calling the extra taxes on income the Universal Social Charge or Pay Related Social Insurance does not fool anyone here any more. It's all income tax, and on top of that we now have property tax and water charges.
The idea of giving back the pension levy money to state workers also sticks in the throats of all private sector workers here who were paying into their own private pension funds. Over the past few years the government dipped into these funds with a levy to raise extra revenue, and of course there is no proposal to give that money back!
The official data on the out-turn of the state's finances for last year has some interesting headlines which contradict the usual narrative we hear. Last year, for example, the state spent €42 billion in total voted expenditure.
But at the height of the boom in 2006, when revenue was rolling in, the state spent €40 billion. Which puts a rather different perspective on the "austerity" we are now supposed to be going through.
It's the same when you look at the tax side. Despite the fact that unemployment is now higher and wages have been cut, the tax take is close to what it was at the height of the boom.
Last year the tax take was €40 billion. One economist here pointed out that this is €2.5 billion more than the 37.5 billion tax take in 2005 when, as Bertie Ahern might have put it, the boom was very boomy. (It eventually peaked in 2007 and the downturn began.)
What does this mean in simple language? It means that in spite of all the talk of austerity, we are still taxing and spending like we did in the boom days.
Of course some of the spending is due to the higher welfare costs caused by unemployment. And the tax take is achieved by piling the pressure on those who do have jobs.
The same economist pointed out that income tax on the average industrial wage has risen by one-third since the days of the boom. In a nutshell we are still hiking taxes rather than cutting spending.
And now the government wants to do even more of the same. Will it be enough to save the Labour Party and get the Fine Gael-Labour government back into power?
It looks like a long shot at the moment, although both parties showed a slight recovery in the most recent opinion poll ratings. But that does not mean they won't try it.
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