Budget 2016: An election budget?

Anne Marie Stacey analyses this year’s Budget and asks the question of whether it is indeed just an “election budget”Finance Minister Michael Noonan, and Public Expenditure and Reform Minister, Brendan Howlin said the 2016 budget, which they announced on Tuesday 13th October, aims to keep recent economic recovery going. Noonan said the budget was designed to sustain the economic recovery and bring stability to families across the country. The opposition parties are claiming this is nothing more than a sham attempt to influence voters before the next election and that the targets set out by the budget are not sustainable.This is reflected in key areas such as child benefit, education and the minimum wage increase which are issues that prospective voters follow closely. Child benefit will increase by €5 to €140 per month for every child. There will be an introduction of statutory paternity leave of two weeks, to take effect in September 2016. In education there will be 2,260 new teaching posts, including 600 new resource teachers, along with 610 new special needs assistants. However some TDs have claimed that this is sacrificing education and healthcare in a push to maximise votes which could be detrimental to our future.
“This is sacrificing education and healthcare in a push to maximise votes”
So is this budget really two steps back instead of the push forward we had hoped? A very valid concern is that they are throwing far too much money at voters when the economy has just started to grow again, and that this repeats the dire mistakes of the boom era. The Fiscal Advisory Council and the Central Bank have warned that an expansionary stance on top of 6 per cent growth is a recipe for overheating the economy, but they have stopped short of criticising the government’s plans. Fianna Fáil's Sean Fleming has said: "This is all about the general election”, and Sinn Féin's Mary Lou McDonald has expressed her opinion that “today's Budget is not so much about righting the wrongs of the past, it's about winning the election”. Trade union SIPTU had a very different opinion and said the budget contained positive measures that will see workers make the first real financial gains from a budget in almost eight years. “The fact remains that the more you earn, the more you will gain,” the Union’s researcher Ger Gibbons has said.While this budget on the surface seems to have something for everyone, appealing to the family and voters, when closely examined it can be called the epitome of boom-bust politics. It is providing fast solutions to a complex problem and while providing some initial relief to a certain portion of the working class, it does nothing to address the inequality in Irish society and leaves crucial issues such as the housing crisis and the proposed rent cap untouched. Further supporting this belief that this budget employs its own political pre-election agenda are the cuts to the much criticised Universal Social Charge (USC) and the subsequent election promises made in an interview by Noonan, who said that the Government parties would work “progressively” to eliminate the USC if re-elected. Another election pledge was to complete tax equalisation for the self-employed and other measures to support job creators. This is in an attempt to appeal to what the electorate wants to hear rather than addressing crucial areas that did not receive funding in this budget and have been neglected. The Unite trade union has said Budget 2016 will “entrench inequality” because they say it has failed “to address the structural deficits left behind by austerity.”With the risk of considerable uncertainty in the European and international economy, the Government should have substantially increased investment in our infrastructure, productivity and education. Instead, it is recklessly cutting taxes. While on the surface this is set to appeal to the voter, in reality we must examine the facts deeper and they are that half of all workers earn less than €29,000 and these people will see few benefits from the USC cut. Jimmy Kelly, the Unite Ireland Secretary, perfectly summarises this budget, in saying: “this is not only an Election Budget – it is clearly a Fine Gael Election Budget from which any Labour fingerprints have been carefully wiped”.