Renua Manifesto Review: Vague Buzzwords Brought To You By Fox News

The Dáil has been dissolved and the campaign for the 32nd Dáil has begun. It’s easy to get lost in the media-spin, tribalism and parochialism. So I thought I’d try and clear this up by analysing the policies (not personalities) of each party by reviewing their manifesto. Trying to describe the views of any Irish political party is like trying to square a circle and first on the list, Renua, is no exception. In fact it’s hard to see what the party stands for. Seeing as it was formed from TDs who resigned from Fine Gael in protest at the abortion bill, you would expect them to be an anti-abortion party perhaps aiming for a social conservative vote like that which opposed the Marriage Referendum. After all, they are endorsed by David Quinn. However, abortion isn’t mentioned a single time in the manifesto, nor is any other social issue for that matter.

Main policies:

  • 23% Flat Tax
  • “3 Strikes” = life imprisonment
  • Make the unemployed work 20 hours a week

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The manifesto begins as all opposition manifestoes do, by claiming the country is in crisis and their radical action can save it. It starts by promising great things “In this manifesto, we present one of the most ambitious political programmes ever presented to the Irish people.” However, what is more revealing is the next line: “We want to build a country where work is rewarded and job creators and innovators are valued, primarily through a low tax economy.” While the first quote is generic political sloganeering, the second shows Renua’s Fine Gael roots and its desire to win over the centre-right pro-business vote. Now, Ireland’s taxes are already quite low by European standards, but some feel they can always be lower.

Their economic policies seem to have been copy and pasted from the American Republican Party. They have such Fox News favourites as

A constitutional/legislative commitment to balanced budgets, meaning politicians will never be allowed bankrupt the country again.”

This is a great slogan and a terrible policy. For a start, using the constitution to run the budget is an awful idea and completely unworkable. Secondly, the government ran a budget surplus throughout the entire Celtic Tiger and that didn’t help too much when the recession came. Yet Renua seems to take a step back by realising that trying to have the budget completely balanced during the recession is madness (that much cutbacks at a time of already low demand would cripple the economy further) so they clarify that they will “mandate government to operate balanced budgets during periods of economic expansion.” This is very different and far less radical. In fact even Keynesian economists would agree with having surpluses during expansions so long as there are deficits during the recession.

The manifesto gives a clue to its ideology when it boldly states that “A marginal tax rate in excess of 50% is morally wrong and acts as an obstacle to economic growth and personal fulfilment.” Apparently, Renua doesn’t simply think it’s a bad policy but also contrary to morality. It then provides the major policy of the manifesto, proposing the replace income tax with a flat tax of 23%. It can be straight away seen that this policy is great for rich people as they will have to pay a lot less tax and terrible for poor people who will have to pay a lot more. Even according to Renua’s own calculator, people working on a minimum wage will have their tax doubled and will have to pay €800 more tax. As soon as this was discovered, the calculator disappeared from Renua’s website.

Renua claim that this flat tax will raise as much income as the current income tax system, a claim that was immediately disputed by the Revenue Commission. Income tax currently raises €19 billion annually, slashing this to 23% would only raise €10 billion. In order to keep revenue at their current level, the flat tax would have to be 46%. Who are you going to trust, people who study tax for a living, or a political party in an election campaign?

The economist Karl Whelan is sympathetic to flat taxes, but even he finds many problems with Renua’s proposal. Firstly, it would greatly exacerbate inequality as people earning over €100,000 would have their tax cut from 35% of their income to 23% and those earning over €275,000 cut from 40%. However, those earning only between €10-20,000 will have their taxes hiked from 3-5% to 13-17%. Secondly, although Renua claim that their tax plan will cause people to work much more hours and encourage more people to start working, there is no way it can raise the current levels of income. Brian Lucey examines the evidence for flat taxes and finds it lacking. Economic studies show that they mainly benefit the wealthy and increase inequality. There is also no sign that it greatly increases the supply of labour.

RENUA Ireland is proposing that all people in receipt of social welfare who have been unemployed for more than six months will be enrolled in community employment schemes or an expanded JobBridge apprenticeship programme. No able bodied person will get state assistance without contributing to their communities. A minimum of 20 hours per week will be sought in return for job seekers payments.

This is a major policy and it is complete nonsense. Requiring people to get a job before they can receive jobless allowance is a bizarre paradox that sounds like satire not a manifesto. The whole reason we have massive unemployment in the country isn’t because people suddenly got lazier around 2009, but because there aren’t any jobs. What does Renua propose the unemployed should do? There are almost 200,000 unemployed people at the moment, how is Renua supposed to created vacancies for them all? The problem is a lack of jobs not a lack of workers. Expanding JobBridge is also problematic, it has been criticised as simply replacing paid workers with unpaid interns. Doubts have been cast over whether the skills learned are actually useful and whether they lead to a real job.

We are proposing a tougher, no-nonsense ‘Three Strike’ approach to sentences for dangerous criminals and repeat offenders, to end the feeling of fear and threat that is widespread in rural areas.

Yet another policy that seems like it was copied from Fox News. They didn’t even bother changing the American metaphor (three strikes doesn’t mean much in a country where no one plays baseball). So if someone is caught burgularing three times, they get life in prison? This sounds more like politicians trying to act tough than a justice policy that would actually work. Irish prisons are already overcrowded, locking up more people for longer will only make the problem worse.

In rural and urban Ireland people feel under siege and distressed in a manner not witnessed since the appalling murder of Veronica Guerin.

I have no idea where this is coming from. According to the statistics, crime has dropped drastically (by more than a third for many crimes) since the recession. Who believes they are under siege? Where is the evidence of this crime epidemic? It seems dramatic rhetoric took a higher priority than sensible policy making. Other policies on crime such as “making life mean life” and holding parents responsible for their delinquent children makes it sound that their justice advisor is some guy they found grumbling in a pub.

Renua

As is to be expected the manifesto predictably proposes to keep the corporation tax at 12.5% and simplify the tax code in a vague, unspecified way. They propose cutting Capital Gains Tax to 20% for investments less than five years and to 10% for investments longer than eight years. As a significant proportion of the income of the wealthy comes from dividends instead of wages, this is another tax cut that benefits the rich and offers nothing to rest of society. However, Renua wants to keep CGT at the current rate of 33% for “non-productive businesses” although it doesn’t say how this to be defined. The strangest part of all is that Renua claims its tax cut will raise, not lower revenue. In fact it claims it will raise €1 billion per year by the end of the next government. How this magic trick will be performed is not explained.

Renua proposes abolishing the motor tax and TV licence. Their policy on RTE is confused and contradictory as they want RTE to fund itself through advertising while also claiming that it will be funded through general income tax. Will RTE continue to receive subsidies? Do they really think TG4 can support itself through Irish language advertisements?

RTE will have to fund its operations from its commercial income to compete with private sector broadcasters. RENUA Ireland believes in public broadcasting, however, but believes it should be paid through the progressive tax system rather than a regressive license fee.

There is a long section on the public sector which can basically be shortened to two words: accountability, efficiency”. Now these buzzwords sound as good to me as anyone else, but they’ve been promised by every party in every document, ever. Unfortunately Renua doesn’t have much of idea of how to achieve this. Their health policy is equally vague, in fact apart from the headline grabbing policies taken from Fox News, most of the rest of the manifesto is just vague buzzwords.

Their banking policy is mysterious. They plan to create an Irish Credit Network which apparently works well in Switzerland. I guess we’re supposed to know this already because the manifesto has no explanation. Local Public Banking is supposedly a great success in Germany so Renua want it here too. I think Renua overestimate the Irish populations familiarity with the German financial sector because I have no idea what this is.

They have cobbled together a random collection of policies on the countryside which includes a lot of praise for the tourist industry and talk about how we need to support it, with little actual policies. Apparently the horse and greyhound industry is of great importance and must be supported and somehow Renua will introduce more competition into the beef industry (how are they going to do this? Set up their own butchers?) They will also use drones to monitor that fishing ships are honest in reporting their catches and create fund to protect farmers against price volatility. The rural pub is in such need of protection that it has an entire subsection to itself.

They wish to amend the constitution so that TDs must represent the whole country, not just their constituency, which is a great idea but I’m unsure over how workable it is. If a TD lobbies for local services are they acting unconstitutionally? TDs can be dismissed if they “seek to pervert the national interest for clientalist reasons.” Ministers will have term limits of nine years or two terms, though it is unclear if this is of one department or as a minister in total. They propose a referendum (although they don’t say if they will support it) to create single seat constituencies and separately a list system.

The education section also copies American phrases by promising “to ensure no child is left behind.” (No Child Left Behind was the name of George Bush’s education reform). Despite the fact that Renua is promising major tax cuts, they imply that they will also greatly increase education funding. They complain that universities are underfunded and that “The pupil teacher ratio must be in line with best international practice.” Presumably this means they will increase funding (our number of teachers is below international average) but there is no mention of where the money will come from. Renua proposes student loans but also gives no details. Their position on religious control of schools is similarly vague and it appears they are trying to sit on both sides of the fence.

Conclusion

The vast majority of the manifesto is comprised of little more than vague buzzwords that are only included because they sound good, not because anything will be done about them. The only exceptions are those that were copied from Fox News. Renua know that they won’t win many seats in the next election and will have little chance of implementing their policies. So criticising their flat tax or unemployment policy as unworkable is missing the point. They will never be put into practice so they only exist to grab attention, particularly of rich people who feel oppressed with taxes, think the unemployed need a work ethic and think criminals are treated too softly.

3 thoughts on “Renua Manifesto Review: Vague Buzzwords Brought To You By Fox News”

  1. I thought the idea behind lowering the taxes on the rich was supposed to be that higher taxes would be encouraged to work less – and hee Renua is saying that higher taxes on the poor will make them work more. Sounds like they’re not watching Fox ENOUGH.

  2. “Secondly, the government ran a budget surplus throughout the entire Celtic Tiger and that didn’t help too much when the recession came.”

    -Aw, come on. At least Ireland didn’t suffer a Greek-style debt crisis (or any sort of double-dip recession, really). Sure, it helped.

    “Yet Renua seems to take a step back by realising that trying to have the budget completely balanced during the recession is madness (that much cutbacks at a time of already low demand would cripple the economy further) so they clarify that they will “mandate government to operate balanced budgets during periods of economic expansion.” This is very different and far less radical.”

    -Aw, come on. Running budget surpluses during a recession would be bad for the government, not so much the broader economy (in the system Ireland’s in, however, price controls would be required for every recession so that the balanced budgets don’t hurt the economy).

    “Income tax currently raises €19 billion annually, slashing this to 23% would only raise €10 billion.”

    -Not sure how accurate these projections are in Ireland, but in the U.S., income tax rates don’t predict income tax revenues at all.
    Also, effectively capping unemployment benefits at six months is bound to incentivize people to search for whatever unfilled jobs that exist harder, thus increasing the efficiency of the labor market.

    “They propose cutting Capital Gains Tax to 20% for investments less than five years and to 10% for investments longer than eight years. As a significant proportion of the income of the wealthy comes from dividends instead of wages, this is another tax cut that benefits the rich and offers nothing to rest of society.”

    -Pathetic. These people should be calling for the abolition of the capital gains tax, like sensible economists. If two people get the same wages, but one doesn’t do anything with them, but the other invests them into dividend-paying stocks, then why should the second person be taxed at all on the dividends he receives?

    BTW, wage taxes are highly reliable sources of revenue.

    “How this magic trick will be performed is not explained.”

    -Laffer curve. A smaller capital gains tax rate might lead to more capital gains, thus raising capital gains tax revenue.

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