David Quinn: Fine Gael is no longer any champion of the taxpayer

The opposition parties love to decry the Government, and especially Fine Gael, as “right wing”. But where is the evidence that supports the accusation? When someone is called “right wing”, it normally implies they have an aversion to high public spending and taxes. Depending on whether you are a libertarian or a conservative, it usually means a very strong commitment to personal freedom in the first case, or to pro-family policies in the second.

The Government is currently passing a “hate crime” law that does not appeal to libertarians because it cracks down on free expression, and it’s planning a further referendum on marriage, one on “gender” (whatever that might mean), and one on women in the home, none of which appeal to social conservatives.

What about tax and spending? Has either Fine Gael or the Government shown much in the way of “right-wing” inclinations there? The answer is a definite “no”.

On the contrary, we have seen massive increases in public spending in the last few years and very little for taxpayers.

In 2019, total current spending by the Government came to €60bn. The Covid years don’t really count for comparison purposes because so much had to be spent protecting people from the economic effects of lockdown.

This year, current spending is projected to come in at almost €78bn. Therefore, current spending has shot up by €18bn in just four years.

Would a truly “right-wing” Government preside over this kind of spending rise? Obviously not.

This is why the recent article in the Irish Independent from three Fine Gael Junior Ministers, Jennifer Carroll MacNeill, Martin Heydon and Peter Burke, has garnered such reaction.

In the piece, they called for more government spending in areas like health and housing. But what grabbed the attention was their call for a tax break of €1,000 in the October Budget for workers on the average wage.

This caused ructions in Fianna Fáil. It was variously described as “populist”, “uncosted”, “nuts” and pre-budget “kite-flying”.

But the Programme for Government, agreed by all three coalition partners, is committed to ensuring that tax credits and tax bands be index-linked to earnings, so if there isn’t a substantial tax break for wage-earners in the next budget, that promise will be broken. If anyone should be angry, it’s Fine Gael TDs and not their Fianna Fáil counterparts.

In fact, the question arises, does Fianna Fáil believe taxpayers deserve anything? They should be the ones having to justify their opposition to modest tax breaks, and not the other way around.

It is also interesting that they seem far more upset by such a modest proposal (assuming it even comes to pass), rather than by the much more disruptive policies of their Green coalition partners which are inflicting so much pain and angst on Fianna Fáil’s core rural voters.

Do Fianna Fail TDs really believe a tax cut of €1,000 is worse than seeking to cut the beef herd by 200,000 cattle, or further promised increases to the carbon tax, or the recent reimposition of full excise duties on the price of petrol?

It is almost as if tax cuts are considered somehow immoral and greedy and therefore anyone who wants to keep a bit more of their hard-earned money is less worthy than someone who wants further increases in spending on health and housing.

But compared with 2019, spending on health is up by 37pc, or €6.5bn, and spending on housing is up by over 50pc, or €2.4bn. Therefore, money is being poured into the public sector at unprecedented levels. It is receiving more than its fair share.

Compared with that, taxpayers have been cut barely any slack at all, and the small alterations in the tax bands are hardly covering wage inflation which pushes even more workers into the higher tax bracket.

Even the changes to income tax proposed by the three Fine Gael Junior Ministers are incredibly modest. Note also how they used the term “tax break”, rather than “tax cut” in their article. What is currently taking place is political theatre. Fine Gael is delighted that some Fianna Fáil TDs, plus the opposition parties, are attacking the proposed tax break. If the next Budget contains something along the lines outlined in the article, then Fine Gael can flag it to their voters as a win.

In fact, all they will have done is fulfil the promise all three coalition parties agreed to in the Programme for Government. Fine Gael will deserve no credit for this.

A number of European countries, such as Denmark, Sweden and Norway, which are hardly renowned as bastions of the right, automatically alter the tax bands in line with wage inflation, but not us, and we are supposed to be grateful if granted even this small concession.

Indeed, Fine Gael did not extract enough on the tax side from their coalition partners. The Greens extracted one major commitment after another, the most radical of them being a promise to halve carbon emissions by 2030, an incredibly radical target that has no hope of being met.

But the Greens, at least, have a purpose. But what is the point of Fine Gael? It seems to have no unique selling point anymore.

It cannot pretend to its voters that it is on the side of taxpayers when it has presided over massive spending increases and only negligible changes on the income tax side.

The imbalance between the huge rise in spending on the one hand, and tiny tax breaks on the other, is so vast that if Fine Gael was not actually in power, you would assume this is one of the most left-wing governments in the history of the State.

The big tax increases that occurred during the period of austerity, including the Universal Social Charge, have been retained. Barely adequate adjustments to the tax bands have been reluctantly offered while the spending cuts of the austerity era have been far more than reversed.

In other words, taxpayers are being handed a very raw deal by this Government. Fine Gael is supposed to be the champion of the taxpayer and it has utterly failed in this task. Don’t be fooled by the small tax break that appears to be on offer. Fine Gael should be demanding a far better deal for ordinary workers, one that strikes a fairer balance between spending increases and tax reductions.

Get ahead of the day with the morning headlines at 7.30am and Fionnán Sheahan’s exclusive take on the day’s news every afternoon, with our free daily newsletter.

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