So let's fill in the good week/bad week box for the Government. Good week – the latest Central Statistics Office figures show we have the fastest growing economy in Europe. Bad week – there is no escaping the Irish Water mess.
It was a week that neatly summed up the Government’s economic balance sheet, so to speak. The big picture could hardly look better, with a good chance now that economic growth this year will match last year’s 5 per cent rise. On any criteria this is an extraordinary turnaround. But Irish Water seems to encapsulate the concerns that, when it comes to the detailed stuff, the Government – or perhaps more pointedly the Irish political system – could hardly do things worse.
So you have the bones of the election economic battle starting to appear. The Government will major on the overall performance of the economy and its turnaround, while the Opposition will argue, in various ways, that the Coalition has messed up – producing as evidence hospital waiting lists, families struggling to find a place to live, the mortgage arrears crisis and so on. And, of course, Irish Water.
Let’s hope that the campaign can rise above the inevitable ding-dong and involve a discussion of what we are actually going to do with the resources now at the State’s disposal. If growth holds up, the budgetary scope for the next government could be substantial enough over the next few years, even if the combination of our high debt and the new European Union budget rules means the old days of budgets with “something for everyone in the audience” are long gone.
The economic turnaround, as shown in this week’s figures, is spreading. The overall level of national output – as measured by gross domestic product – is back where it was before the crisis hit, even if the rise in people’s living standards is slower.
A key part of the Government's campaign will be that you can't trust the "other lot" with the economy – whether they be Fianna Fáil or Sinn Féin – and that voting for Independents could endanger stability. Fine Gael and Labour will promise more of the same, except better. With the overall economy now performing, the Opposition will focus their argument on two things – the competence of the Government in managing things and the way the fruits of recovery should be spread.
Old Irish political battles
The danger is that this debate just skirts around how to benefit from the current, uniquely favourable, economic backdrop. Instead we will get stuck in the old Irish political battles. One of the favourites is arguing about what should be “abolished” – rather than how something should actually be fixed, and paid for. Nowhere is this clearer than with Irish Water.
The Government responded to this week's Eurostat ruling by saying it was a temporary setback and the company could develop into an independent utility over the next few years. Reading what Eurostat said, and looking at the public mood towards paying charges, this looks unlikely. Meanwhile, the Opposition are now generally calling for water charges to be ended and for Irish Water to be abolished or phased out.
What we need, somehow, is to now come to a way of delivering and paying for investment in what is one of our most important pieces of infrastructure, as well as running this key public service. The Government needs to accept that the existing model is now broken, but the Opposition parties also need a plan that goes beyond abolishing Irish Water and the associated charges.
Changing the nameplate over the door of the body that runs the water service is not, on its own, going to fix things, no more than establishing the Health Service Executive – or abolishing it again, as had been promised – would transform the health service. But coming up with a detailed plan for water requires pointing out that the whole thing is going to take a long time to fix and needs to be paid for, either via general tax or water charges. Who is willing to put all that on the line before an election?
The other rabbit hole in which rows about the economy tend to disappear is what should happen on budget day. Important as divvying up the spare resources in the budget may be, this leaves us arguing – in the case of the 2016 budget – about €1.5 billion, while ignoring the remaining €60 billion-plus in general spending each year and the tax raised to pay for it.
Reform is somehow is off the agenda and the link between what we spend and how we pay for it has been lost. In fact, the problem goes deeper. People don’t believe water charges will lead to a better water infrastructure. And in all probability they also don’t believe that higher general tax will, for example, mean the government of the day can deliver a better health service. So ask them what they want from government and they opt for tax cuts.
The economy is improving strongly, and the next government will have options in the way the Coalition and the last government did not. However, we still won’t be able to afford to throw money at problems in the hope that they go away. The link in the debate between what State services and investment can be provided and how we pay for them needs to be restored as we head towards a general election. The recovering economy may make this easier – choices are easier when there is a bit to spare – but the water fiasco will linger long in people’s minds.