And so, as before, they were able to do nearly everything.
For the third year in a row, after the Covid years, a €10 billion budget that will run a huge surplus, put money into the savings funds, expand the size of the State by growing public spending sharply, boost capital spending to accelerate the construction of badly-needed infrastructure and – best of all this, if you’re preparing for an election – shower money on voters in the shape of one-off payments that will all be made in the next couple of months.
No big new policies, no startling departures, no inspired plans to use the vast resources now at the State’s disposal. But instead, steady as she goes, keep an eye on the you-know-what. Spend big and save big. It will widely be seen as an election budget, for the reason that it obviously is one.
“I make no apology, none whatsoever, for giving people a little bit of their own money back between now and Christmas,” Taoiseach Simon Harris insisted on his way into Cabinet on Tuesday morning.
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And indeed, neither Jack Chambers nor Paschal Donohoe looked remotely apologetic as they announced the budget in the Dáil chamber after 1pm.
The numbers, let it be said, are truly remarkable: more than €10 billion in a budget-day bonanza; spending up by nearly 7 per cent across the board, smashing through the 5 per cent rule (the rule that has never once, since its institution, been followed), €6 billion into the savings funds next year, a €24 billion surplus this year (thanks Apple) and another €10 billion next year; more than €2 billion in the one-off giveaways.
Examples in the budget documentation showed many middle-income workers with children set to gain by more than €2,000, and some by more than €3,000.
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Donohoe reheated the old pledge to “make Ireland the best country in the world in which to be a child”; whatever about that, it’s certainly one of the best countries in the world in which to be a finance minister.
They say budgets are all about choices. Well, yes. But there are choices and there are choices. Not so long ago the choices facing budget ministers in Ireland were a good deal sharper: where would taxes have to be increased? By how much? Where would expenditure have to be cut? How much would services used by some of the most vulnerable citizens have to be reduced? What public facilities would have to be closed?
Nowadays the choices are different. How much should taxes be cut? How many new gardaí, teachers and nurses can be hired? How much should pensions and welfare payments be increased? How many cash boosts can we give people before Christmas?
Of course, the clamour from interest groups and Government Ministers is greater, noisier, more insistent. Keeping everyone in the system happy is impossible. But these are better problems to have than the ones that faced budget ministers in the years 2008-2014. And if that sounds like a long time ago to you, rest assured that those who lived through it and saw their incomes cut every time a finance minister got to his feet on budget day won’t forget it in a hurry.
So as we digest the contents of Tuesday’s package and work out what it means for us individually and collectively, it’s worth briefly remembering how we got from austerity budgets to giveaways: it took hard decisions, long-term choices, willingness to do things that were – temporarily at least – unpopular.
Does this budget pass that good government test?
Donohoe and Chambers can fairly point to the large surplus and the savings funds, the long-term investment plans and the allocation of the Apple money to water, housing, electricity and transport as laying the foundation for future prosperity and guarding against sudden reversals.
Others, including economists specifically charged with warning the Government about this sort of thing, look at the giveaways and say: come off it. You can’t throw money around like confetti and then claim you are the guardians of stern-faced economic prudence. A pass, perhaps, but hardly with honours.
But as the politicians never, ever tire of pointing out, the economists don’t have to stand for election. The reality is that this Government is months – weeks, maybe – away from an election and there is not just a demand from TDs and Ministers for spreading around some of the spare cash, there is a demand from voters for it as well.
Budgets, after all, are as much about politics as they are about economics. Sometimes they’re more about politics than economics.
Will it work? Government ministers and backbenchers have their fingers crossed and their leaflets ready. Most expect an election before Christmas, and in the wake of the budget, agreeing how the Coalition ends is now the most important job for the party leaders. Their relations over recent weeks have not been good, say several insiders. There has been a conspicuous lack of a coherent message and political strategy; instead there has been an increasingly competitive jockeying for credit between the parties.
The Coalition has also been showing signs of the classic error of governments: mistaking the spending of money for achieving results. Voters judge on outcomes, not inputs.
It is often said that the hardest job in politics is to be an Opposition finance spokesman on budget day; it is doubly true when the Government has a large giveaway budget to announce. But Pearse Doherty had one telling point on Tuesday. “Your job isn’t just to spend money,” he said. “It’s to get results.”
History provides enough examples of governments losing elections to conclude that spending won’t, on its own, win an election. Let’s face it, though: it does improve your chances.
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