The agreement and publication of the Government’s new economic plan on Tuesday is a significant moment for the Coalition and a key challenge as the country emerges from the pandemic.
Covid is not yet over but politics, always prospecting to the future, is already looking beyond it to the challenges and contentions that will shape policymaking and competition between the parties once the pandemic recedes. The economic plan signposts the period after Covid when economic questions will play a more central role again in politics.
There are two challenges for the Government: one internal and one external. The first is to agree the strategy and details of the plan, a complex task of political balancing in a three-party government that must pay heed to the differing priorities and needs of its constituent parts. Finishing touches are still be added to this today.
The second is to present, sell and defend its plan against Opposition attack and media scrutiny from tomorrow. In other words, once the internal debates and struggles for resources are finalised, Government has to pivot to promote the package externally. This will involves Ministers strenuously defending measures they have argued against in private. It always does.
But the manner in which it does will tell us something about the Government’s capacity to coherently manage itself internally and conduct itself externally.
Three parts
Sources familiar with it say there are three parts to the plan tomorrow. The schedule for tapering the Covid supports will grab much of the attention, and will be the focus of the much of the Opposition criticism. There is extreme nervousness about this in Government, as Ministers prepare to impose measures that will be unpopular with those affected by them – and will see people face reductions in their payments from the State. The denunciations of “austerity” have already started.
But there is also a settled belief in Government that 15 months later, payments introduced last year for a few months – or so Ministers thought – will have to be brought to an end. The Coalition will approach the subject gingerly; but it believes it has no alternative. “This is a crisis payment and the crisis is ending,” says one person involved in drawing up the plan.
The ending of the pandemic unemployment payment and the other supports will be made as gradual and painless as possible. But the adjustment will not be without difficulty. It cannot be. How the Government makes the case for what it sees as a difficult but necessary policy will tell us a lot about its ability to fight inevitable political battles in the future. Equally, if the Opposition can put the Coalition on the run, that will send its own signal too.
In the body of the plan there will be a heavy emphasis on retraining and on investment in climate action, according to people familiar with elements of it. There will be hundreds of millions of euro for what used to be called labour-force reactivation – training for people to transition from the jobs that have disappeared during the pandemic to the jobs that will grow out of the recovery.
There will be hundreds more for climate-action schemes, demonstrating the policy direction of the Coalition and the willingness of the European Union to fund it. The plan is understood to also contain the Government’s submission to the European Commission for the €900-odd million in funding that Ireland is due to receive from the EU’s historic Covid recovery fund. This is a pretty paltry sum considering the overall size of the fund of some €750 billion, and the Government is sure to face questions about it.
In summary, the announcement of the plan tomorrow will be Budget-style commitment to spend vast sums of money, while affecting hundreds of thousands of people in their daily lives. It’s a big political moment. Look in the right places and it will be a revealing one too.
