Irish political update: New government, new politics, but is all well within the coalition parties?

A new government is now in place and is trying to catch up on lost time with three cabinet meetings this week, attempting to fine-tune the plans for the July stimulus package which we expect will be announced in about ten days’ time.  

Fianna Fáil, Fine Gael and the Greens may be hitting the ground running, but is all well within the parties since the programme for government was ratified by each party and appointments to both cabinet and junior ministries were made? 

New Politics 

The coming together of the two civil war parties is a new affair itself but also brings new partnership agreements that have not been seen in a long time. Tánaiste Leo Varadkar will be carrying out his role from Government Buildings and will be given his own aide-de-camp, like that of the Taoiseach and the President of Ireland. The appointment of Defence Forces personnel signals that Varadkar will have devolved powers from the Taoiseach and will be carrying out many State duties in his new role.   

Controversy 

High tensions and drama ensued from the announcement of both cabinet positions and junior ministries earlier in the week. Some TDs received unexpected promotions, while others were left bruised having missed out on a portfolio that would see them take on new responsibilities as well an increase in salary.

While it could have been expected that Jim O’Callaghan TD was going to be overlooked for a senior cabinet position, it was a shock to most that Dara Calleary TD, Deputy Leader of Fianna Fáil, was not given a senior cabinet portfolio but instead made Government Chief Whip. The decision to leave him out also meant there was no senior government minister in the west of Ireland, leading people to criticise the government’s commitment to rural Ireland. Calleary is a strong force within the party and such an exclusion has left people wondering whether this will push him further away from Martin.  

Long-serving Cork North-West TD, Michael Moyinhan, as well as Limerick City’s Willie O’Dea were also left without ministerial appointments, which may be an attempt to cast-aside the Fianna Fáil old guard for fresh new faces as the party tries to regain its position in Irish politics.  Rows broke out between TDs and the Taoiseach and many opened up to journalists to express their feelings of insult and disappointment.  

Leadership heave 

Another move that has sparked rumours of an internal heave within Fianna Fáil is the rejection of a ministry by Jim O’Callaghan TD, the party’s previous justice spokesperson. O’Callaghan was offered a junior ministry with responsibility for law reform but rejected the offer, stating his energy and abilities would be best spent as a backbencher while he tries to strengthen the party and make it more attractive to young voters. The Dublin Bay South TD also stated the importance of having strong voices outside government who can ensure the party’s identity is protected during the Fianna Fáil/Fine Gael/Green Party coalition. This has heightened speculation that was already mounting that O’Callaghan may be wanting to keep his nose clean in preparation for a future leadership bid.

Meanwhile, Green Party leader Eamon Ryan TD caused a stir with the appointment of Senator Pippa Hackett to Super Junior Minister of Land Use and Biodiversity, meaning she will now have a seat at the cabinet table. Hackett was vocal in her support of Ryan during the announcement of the leadership contest between him and his deputy leader Catherine Martin TD. That said, Martin’s own brother was also nominated to the Upper House.

Covid-19 supports 

Liquidity issues continue to plague Irish SMEs as we await the enactment of legislation to provide for the planned €2 billion Credit Guarantee Scheme. Across the world, countries have already introduced huge liquidity supports, and in some countries, 100% state-backed loans. Yet, Ireland remains caught in the traps and slow to inject much-needed cash into the economy, which may end up having a longer lasting impact on business.   

The tourism industry is still hopeful of a reduced VAT rate but no promises or indication that such changes will occur has been given yet by either Tánaiste Leo Varadkar or Minister for Finance Pascal Donohoe. Instead, plans have centred on the decision to further extend the Temporary Wage Subsidy Scheme, possibly until the end of 2020. That said, if the sector does not see the tax changes hoped for as part of the July stimulus, there is still a possibility that they may feature in October’s budget.

Financial services 

The new government has included the Ireland for Finance 2020-2025 strategy in its programme for government, which is positive given it was only just at the beginning of its delivery. One of the country’s youngest TDs, Jack Chambers, has been appointed as Minister of State for Financial Services, Credit Unions and Insurance and will be responsible for delivering the strategy. Chambers will also have the task of tackling the insurance industry as promised by the coalition partners and his actions will face scrutiny from Sinn Féin’s Pearse Doherty who placed a strong focus on the high costs of insurance in Ireland in the last Dáil.

SMEs 

As predicted, the government has introduced new junior ministries to focus on both Irish businesses and foreign direct investment. Damien English TD, former junior minister for housing has been appointed as Minister of State for Employment Affairs and Retail Businesses which will be a busy job while retailers fight to remain viable. Meanwhile, Robert Troy TD, Fianna Fáil’s previous spokesperson on business, enterprise and innovation will be tasked with ensuring Ireland remains an attractive option to foreign investors as the new Minister of State for Trade Promotion.

Sinn Féin frontbench 

Sinn Féin named its new frontbench yesterday. The most notable appointments include Louise O’Reilly TD’s switch from health to the business portfolio, which means she will now be marking Tánaiste Leo Varadkar. O’Reilly proved herself to be well up to the task of going head-to-head with some of the most experienced politicians in the country and will be strong in opposition against the former Taoiseach. Sinn Féin’s most high-profile TDs, Eoin Ó Broin and Pearse Doherty, have remained in their housing and finance briefs. Other notable appointments are that of Darren O’Rourke TD who will mark Eamon Ryan TD in Climate Action, Communications Networks and Transport and David Cullinane TD in Health who will mark Fianna Fáil’s Stephen Donnelly TD.

Looking ahead? 

It is anticipated that this government will last the five-year term, considering the numbers secured in its formation. In two years’ time though, when Leo Varadkar takes up the role of Taoiseach again, the cabinet and junior ministerial positions outlined above may rotate. 

A heavy focus will now be placed on the economy and whether this government can help rebuild key industries such as tourism without introducing austerity measures. The first major announcement will come in two weeks’ time in the form of the July Stimulus package. This is expected to offer significant financial support to SMEs and key sectors. The funding for the package is largely coming from the EU. Attention will then turn to budget preparation and the National Economic Recovery Plan which will lay out taxation measures to try and curb increasing public sector costs. Industry will as such be looking to get in front of new ministers to layout their priorities ahead of the October announcement. Brexit will also be heavy on the new government agenda as plans are put in place once again for a potential no-deal scenario.

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Aisling Cusack

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