Belfast Telegraph

Coalition needs to face facts in fight with recession

By Brendan Keenan

One could hardly call it a "dash for growth". A trot would seem more appropriate. But the phrase came to mind as I listened to Enda Kenny go through his plans for the first 100 days.

Of course, the plans were in the Programme for Govern- ment - cut the lower rates of VAT and employers' PRSI; make provision for 15,000 new places in training and educat- ion; start whatever can be done in 100 days on the big NewERA construction programme for national networks.

Yet it still came as a bit of a shock to hear the newly-elected Taoiseach repeat them again. Without a doubt, Sean Lemass's dictum about abandoning election promises once the polls close has itself been abandoned. If it is part of a new honesty in politics, then it is all to the good. The question mark will not be over their honesty, but their wisdom.

Anyway, memories of the last "dash for growth" came to the fore, and they were not com- forting. That was the 1977 Fianna Fail government - one with a record majority, only now superseded.

That was a real dash for growth, with the starting gun fired by the abolition of the domestic property tax, then known as rates. I am not suggesting that anything on this scale is contained in the coalition programme.

It is undeniably true that a country cannot get out of a debt trap as deep as Ireland's without growth. It is less often noticed that growth on its own will not be enough.

Stimulating the consumer and paying for new jobs will not do the job on their own. Higher taxes and lower spend- ing are part of any solution.

The choice essentially is whether a government goes for growth first, and then closes the remaining gap; closes the underlying deficit first and then waits for growth; or applies a bit of both together.

When you look closely, the coalition is actually applying the last option, with its concurrent pledge to stick to the deficit targets in the EU/IMF agreement. It might be more comfortable for it in the end if ministers were a bit more honest about that.