This one I didn’t want to post on until Lisbon was over with and today’s front page Business Post story gives me the perfect segue.

Sunday Business Post:

The Government is conducting a major spending review which is expected to lead to…capital projects being scaled back…Particular emphasis is being placed on capital spending in education and health, which accounts for large elements of government expenditure.

Noel Whelan (Irish Times, Last Saturday):

No consideration appears to have been given to whether the current, temporary difficulties in the public finances should be addressed by tax increases.

Incomes in Ireland are currently under-taxed. The fact that Irish workers are the lowest taxed in Europe was emphasised this week by Brendan Butler of Ibec, not in response to the publication of the exchequer returns but during the debate on the Lisbon Treaty

I never really know what to make of Noel Whelan, he is known to be very close to Fianna Fail and it is often tempting to read him on a Saturday as an extension of thinking which is quite close to the top of Fianna Fail. If that is the manner in which to read him then last Saturday was a quiet piece of political kite-flying, that favourite passtime of politicians or a solo-run-also a favourite.

Cowen himself has never talked of tax increases on wages, have never brought it about at budget but he did commit himself wholeheartedly to the National Development Plan which secured funding for capital spending in health and education as well as roads and infrastructure. Perhaps the government reckon that they can put up taxes in certain parts of the economy and finance the capital spend out of that. It would be very interesting to hear government make that argument to people, tell them the tax we pay does not finance the public services we want.

This is especially so in education and health where primary schools get 50% less per child than secondary and some of our universities are crumbling and our hospitals and health system where….well how long have you got? Tony Blair got people onside to invest in services in the UK after 20 years of Thatcherism, could or would Cowen do the same here? In very simple terms it is investing in our future for spending in these areas is not an indulgence if we do not want to get locked into a cycle of boom and bust, binge and purge, like the past.