Those interest groups…

There’s a real danger with this sort of blogging that one will turn into Mr. Angry. But to be honest there’s a greater danger of turning into Mr. Sad. It’s just such an effing waste what has happened and is happening to this state and this society. The gains of the last three or four decades stripped away piece by piece. The utter self-serving deceit that we are now treated to daily (Brian Lenihan’s inability to stop blaming public expenditure when Rehn and Kelly have both pointed to the banks as the reason why the economy is sinking – though in a way of course Lenihan can’t concede that because to do so makes a mockery of the past thirteen or fourteen years of economic policy). The utter and almost incredible lack of empathy or basic understanding being displayed by those with something for those who have near enough nothing in comparative terms (a big hallo to John O’Hagan in the Sunday Business Post for the particularly asinine observation that ‘why should the pay of those in work be cut and taxed more heavily, while those on social welfare are barely touched?’). And so it goes.

But my God, what an irritating editorial in the Sunday Business Post this weekend. Under the heading ‘we must all take a hit – no exceptions’ we are treated to no end of complaining about ‘interest groups’. Now I’ll preface this by saying what I still think is true, for analysis the SBP is the best Irish Sunday out there. And I’m not particularly irritated by it taking a right of centre line economically or socially. But what is irritating is that it doesn’t recognise, or at least say outwardly, that that is what it is doing. Rather it positions itself above politics, as if the solutions it proposes are bled dry of ideology entirely and can somehow operate free of it.

And that’s simply incorrect.

The principle of a student contribution to an education from which individuals are the primary benefactors has been espoused by this newspaper before our economic situation changed so dramatically. It is doubly defensible today.

It is bolstered by the unambiguous findings of several expert reports which clearly demonstrate that the abolition of third-level fees has not achieved the stated aims of its sponsors and its defenders – the opening up of university education to children from poorer backgrounds.

The evidence is quite conclusive.

Unfortunately the evidence is not ‘quite conclusive’, and this is a disturbing indication of a myth that is beginning to get legs, largely on foot of a report by Kevin Denny [of Kentucky University, and also affiliated to the Institute of Fiscal Studies] entitled ‘What did abolishing university fees in Ireland do? issued earlier in the Summer.

The problem with the research as noted here before is the focus. If we measure take up of low income SES places in HE as a whole we see an increase since the abolition of fees. If we restrict the measurement of take up of low income SES places to universities (or college as he puts it) we see largely similar figures to the status quo ante although that is in the context of increased university places.

I’m still at a loss as to why a focus on the universities alone indicates the failure of the abolition of fees initiative in general (which by the way was about access to third level in general, not just the universities). Unless one gifts the universities a position in our education system that seems to be out of all proportion to the reality. And it’s disingenuous of the Sunday Business Post, at best, to peddle that line.

The results may mean that there are other problems attached to the perception of universities amongst those from low income SES’s, it may mean that aculturation to the concept of third level education in low income SES’s comes passing slow, it may mean that location made IOTs more attractive, or that the blend of courses is more attractive t those from low SES’s, it may simply mean, as some have noted here, that during a time of the most sustained economic boom in this state, those who had the choice of a non-traditional option of third level plumped for more immediate and traditional remunerative options. It may indicate many things.

I’m certain that it’s problematic, but I’m hugely dubious that this research, interesting as it is, provides a silver bullet which puts down the free fees concept. Indeed I’d be equally dubious that any return, however modified, to a situation where the same percentiles of those from low-income SES’s prevailed previously makes sense – particularly since overall figures of entry from low income SES’s across the entirety of the HE has increased subsequently both in real terms and percentage wise.

I don’t know what the reasons are, but I’m certain that it is impossible to look at the history of the last fifteen or so years and not come away with serious questions as to research which tries to reduce third level to one area of it and worse again, analyses which attempt to do away with yet another area of universal social provision based on single pieces of research.

But again, the problem is that this links into a broader issue with the SBP analysis. On the one hand the SBP complains that taxation is weighted too much towards higher levels, i.e. the old trope of 6% paying most of it. On the other hand it complains that the middle classes are gaining too much from it.

In that context, it is simply unfair to fund a middle-class benefit from general taxation. It should also be borne in mind during any forthcoming protests and debates that half of all students at third-level currently enjoy the support of some state grants.

The obvious answer is to tax more. These are social costs after all and they should be spread. I have a child. She may, or may not, go to college. Given me and my partners history the chances are highly likely that she will. But if she didn’t I wouldn’t begrudge increased taxation to ensure that others went because the benefit to me of an highly educated workforce is obvious, but so as importantly is the option of choice for individuals in terms of what they wish to do.

And I remember all too well the reality of what the grants scheme was like and the often absurd variability in who was eligible and who wasn’t. But that’s what grants and means testing do. They generate inequities at margins, they create barriers to entry, they suppress class mobility. That curtails rather than increases choice.

There’s more, naturally.

But the student protests are part of a wider trend which will manifest itself more clearly in the coming weeks before the budget.

That is the determined campaigning by special interest groups to secure a pass from the austerity package. Students will argue they are the country’s future. Older people will argue they have done their bit.

Everyone will argue that they can’t afford it.

The truth is we must leave behind the notion of politics as the business of keeping interest groups happy.

And there’s more again…

There is only one overriding interest to which the government must have regard – the national interest. It is our view that, currently, the national interest demands the €6 billion budget be passed, in the hope that it will mollify the markets sufficiently to enable the country to borrow enough money to keep the country functioning next year.

The national interest between 2000 and 2008 was to maintain viable tax returns, not to put them to the flame. But the Sunday Business Post did not agree with that line. Anything but. At every point, and right up to today it has argued against tax increases (and has only grudgingly conceded that they may be necessary, but with the usual centre-right conceit that ‘all must pay’ taxes, however low their incomes – I don’t disagree, but the quid pro quo is sustainable service provision which is something the SBP is happy to see put to the flame as well). Indeed as recently as 2007. albeit with caveats, it ‘welcomed’ the frankly crazed Labour Party proposal to cut the lower rate of tax to 18% (an instructive exercise is to go back through SBP editorials in the run up to the 2002 and 2007 election. Not a word of how low our tax base was/is, but plenty of stuff on ‘value for money’ public services).

And as noted by Morgan Kelly, whatever shapes the SBP throws, and boy has it been clear about laying the blame on public expenditure as the main reason for the crisis, the reality is that it is the bank bailouts that are sinking us, not the underlying deficit.

But moreover, I think it’s possible to fundamentally disagree with the ‘interest groups’ line. The SBP has no problem articulating the ideas of the interest groups it champions. Editorial after editorial has agreed with ISME and IBEC and the SFA that taxes shouldn’t rise. But those are much smaller groups than pensioners, those on social welfare, students, etc. Indeed what the SBP is proposing is effectively to not listen to citizens, and in the main citizens struggling to get by on few resources (by the by, I’m not against taxing pensions per se, but let’s remember, they already are taxed, except when they are too low).

Then we get the lash at the democratic process.

It is a depressing commentary on the politics we have constructed for ourselves that, to secure parliamentary passage of the budget, the government will have to buy the vote of independent Jackie Healy Rae by promising to spend large amounts of public money in his constituency.

Healy-Rae announced last week that he would insist on public funding for the Tralee by-pass and a hospital in Kenmare in return for his vote, and added that he had ‘‘a lot of other things cooking’’.

Healy-Rae is quite clear: given the choice between the national interest and his own electoral interests, there is no contest. But we should be frank, he behaves this way because he believes – with some justification – that it will result in his (or his son’s) re-election. If all politics is deal making, we have made some pretty silly deals with ourselves.

But the point is that JHR, for all his flaws, and in fairness my God it’s not as if he’s attempting to prioritise the business sector over public health or welfare, is an elected politician. That’s democracy. And for the SBP to be calling that into question as it does is of concern.

The truth is that there will be no way out of the current morass for the country, unless we all realise that the scale of the problems requires sacrifice by everyone, and an end to pork-barrel, auction politics.

Living standards for everyone – including those on social welfare – will fall.

That will not be easy, nor will it be pleasant. But it is necessary, and we should stop pretending otherwise. It is high time we started living in the real world. In any event, we can no longer postpone it.

We should start living in the real world? Hard enough to take from those who championed the excesses of the last decade through an absolute anathema to increased taxation in whatever form and continue largely to do so in regard to personal taxation. Worse again to hear from those who won’t have to scrape by on €196, and who seem entirely ignorant of what removing even a couple of percent of that means in real terms, using a glossy and glib ‘not being pleasant’ and believe that somewhat increased taxation at the higher end is equivalent in terms of pain (by the by John O’Hagan makes noises about being eligible for the public pension etc. Yeah, well, more tax on it so. Simple enough solution except to those who can’t countenance the very idea of increased taxation).

It’s not.