Election hangover

This time gives us an opportunity to assess the wisdom, or otherwise, of politicians tempting voters with promises of more expenditure. With tax revenue surpluses, full employment, and low inflation it is little wonder that our public representatives would want to come up with imaginative and tempting proposals to spend public money. This is what concentrates the minds of voters to a far greater extent than consideration of long-term strategies to ensure that our good economic health continues. There are clear indicators that our future may be compromised by global shocks. The election of Donald Trump, a self-proclaimed protectionist, is one potential shock factor. His determination to reclaim the profits of US multinationals operating in Ireland and elsewhere, could deliver another shock to the Irish economy. Add in energy supply uncertainty from the Russian/Ukrainian war and the conflict in the Middle East, and there is more than enough reason for caution. Unfortunately, the utterances of our politicians during the election were far from cautious. There are few votes in advocating financial probity, and promises of free money are a staple of voter fodder to encourage preferment at the ballot box.
Meanwhile, we have serious infrastructure inadequacies that will increasingly stymie economic growth. Water supply, that most basic of necessities, will require enormous public expenditure to support private and business requirements in the coming decades. Yet, there is still no political will to levy water consumers, with politicians of all shades willing to allow us to believe that potable water is a cost-free commodity, unlike electricity, gas, bread or any other necessity. We have one of the most expensive energy prices in Europe, with little evidence of political ambition from any quarter to reduce this burden on homes and businesses through a more pragmatic approach to energy generation. Again, huge energy infrastructure and transmission investments are needed, and our politicians have not challenged voters with these realities, instead adopting a Dutch auction for votes, with no financial health warnings attached. We should expect better.

While a surfeit of teacher TDs may not be an ideal membership component of Dáil Éireann, any competent economics teacher would know that an economy running at capacity does not require more financial fuel. In fact, most students of economics would understand that the time to support economic activity is during recessions and depressions, not when an economy is growing strongly. The best way to assist people under cost-of-living pressures is by cost reduction, not by subvention. Many of the costs are the result of government decisions, energy being a prime example. Having said that, there is a clear case for investing in infrastructure that will reinforce the economy. Capital investment as once-off expenditure does not involve a recurring annual charge to the Exchequer. Unfortunately, in many instances, there is clear evidence of lack of due diligence and cost control in Irish capital investment projects. Again, an economics or accountancy teacher should possess the competencies to manage these investments, so that out-of-control cost overruns do not damage public confidence in government. Perhaps we should have learnt from previous missteps, including over-generous election promises dating back at least to the 1970s, but it is never too late. The incoming government would do well to study Irish economic and political history to learn how to govern better. Maybe a few history teachers would be useful in the new Dáil.
I wish all our readers and supporters a happy and peaceful Christmas.