| Ireland’s ‘War Budget’ - a victory for the long and steadfast pursuit of pro enterprise economic policies since the Global Financial Crisis |
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| Editorial on the 2023 Budget: Finance Dublin, October 2022 |
The Irish Budget of 2023, dubbed ‘Ireland’s war budget’ in our headline above, was an exercise in the art of the possible. It represented a balanced political fiscal strategy from a Government whose component parts represent parties who by and large see politics as an art designed to mitigate the forces at large in a particularly volatile and dangerous world – described as representative of ‘the political centre of Ireland’ by Minister Paschal Donohoe in his Budget speech today (September 27th 2022).
That political centre, by and large, represents that section of the electorate that sees citizenship as one of responsibility rather than entitlement – akin to JF Kennedy’s famous quote in his inaugural address – ‘ask not what your country can do for you but for what you can do for your country’.
The notion of citizenship and nationhood is particularly acute now, particularly in the context of the Russian invasion of Ukraine, an event that has brought war to Europe to an extent not seen since World War II. Perhaps the war situation is even more serious than even then, given the availability of nuclear weapons to the rogue protagonist in the present war, a factor that at least was not present in the last pan European conflagration.
Given this situation, and given the fundamental bearing on the European, Irish and global economy that the war, through the energy, food markets and inflation is having, it is apt to say that this is a War Budget, for a war economy.
As such, therefore, patriotic citizens will have been asking of the minister not what he can deliver. Instead their concern has been how best they and their fellow citizens can address the pain, and the sacrifice that all must share, so that right will win in the end, so that the economy is not damaged, and society, particularly its weakest and most vulnerable members, are supported to the fullest.
A balanced call on the Budget therefore sees a Government which did its best to help support the weakest, while preserving the freedoms and liberties that a Government of the political centre will have concern for.
Certainly, the Irish Government is finding itself in a much more favourable place economically than its neighbours, most notably its closest, as evidenced by the fact that it has been able to deliver what has been a very benign Budget for taxpayers considering the circumstances, against the backdrop of a rising Budget surplus, thanks, the Minister pointed out, to the buoyancy of Ireland’s corporation tax revenues.
Some might be tempted to say the Irish Government found itself in a lucky position because of that, but not so – that situation has been of its own making – a result of the steadfast pursuit of pro enterprise economic policies ever since the Global Financial Crisis, and Ireland’s banking crisis at the end of the first decade of this century. Those policies, especially the defence of Ireland’s corporation tax regime, particularly in its most severe test last Autumn, have reaped the fiscal benefits evident in the budget arithmetic this year. That defence has enabled the minister to refer to “Ireland’s headline rate of 12.5%” in his budget speech, a rate that importantly, continues to apply, and benefit employment creation in Ireland’s micro and SME sectors, the most important engine of growth for employment and enterprise in a future Ireland.
Minister Donohoe who seems set to switch positions with his Coalition colleague Michael McGrath in the Finance Minister responsible for tax role later this year as part of the coalition governance deal may have to take an early lap of honour, to follow his chairmanship of the Euro Presidency Group of Finance ministers. This is unfortunate, not to slight in any way the competence of his successor in the tax role, but it is realpolitik. The consolation is that it was critically important for Ireland to have held the position of Finance Group president at the critical political negotiations around the OECD global BES compromise, as US Treasury Secretary Janet Yellen's visit to Ireland last Autumn proved.
That made it worth it, no matter what the outcome. The real win for Ireland was gained in the early years of that incumbency, and it was a win not just for Ireland, but indeed for all other ‘small, open EU states’, to quote Donohoe in his Budget speech also. |
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