Comments by Micheál Martin, Minister for Foreign Affairs at the MacGill Summer School

Posted on 19/07/10

Calls for a new style of leadership are not only common they are actually part of the daily business of politics in both good times and bad. There is always a group claiming that everything will be transformed if only there was new leadership. This goes hand in hand with a very traditional and frankly superficial conception of leadership - where a heroic individual achieves great feats by exhortation and winning public support.

These are undoubtedly good and important leadership traits, but ultimately this approach ranks performance above the substance of policy action – it reduces leadership to the mastering of presentation and contemporary perceptions. It also has little or no relevance to the core challenges facing our country at this moment.

The leadership we need is leadership which is willing to take the right actions to get us through an unprecedented economic crisis even if they carry a heavy political cost.

If we want to have a real debate about leadership and governance in Ireland then let’s link it to the very definite tasks in hand. Let’s take a fuller perspective and look across our political culture. Most of all, let’s not forget a basic fact - Leadership isn’t measured in opinion polls, popularity is. Leadership is recognised over time and through people looking at the impact of actions not their popularity.

Political leadership in Ireland

While there can be an almost obsession in Ireland with reinterpreting and arguing about past events, much of which serves no constructive purpose, I do agree that that we need to look back over the last decade for key lessons to be learned. Unfortunately, most political commentary on this topic suffers from taking a very narrow focus and generally ignores the context in which decisions were made. If we genuinely want to learn about the failures of public policy we need an honest appraisal of the past - not a partial or partisan one.

We also need to acknowledge the many clear and sustained successes of strategic leadership. A decade-long determination was at the core of the successful implementation of a new set of relations between communities on this island. The scale of infrastructural development has provided an essential foundation for our future. Equally far-seeing investments such as the creation of a new research community and the transformation of the research landscape are already having an impact – being central to the presence and success of the part of the economy which is most dynamic.

A wide range of reports and studies, including those published recently by the Governor of the Central Bank and international experts, have pointed to three major fiscal and financial issues on top of the international situation and impact of the Euro as being the reasons why Ireland’s recession is as deep as it is. Firstly spending on public services was increased too much while taxes became too low and too narrow. Secondly, construction became too significant a part of economic activity. Thirdly, and this is obviously related, banking regulation was not sufficiently restrictive. I broadly accept this analysis and the need to learn lessons from it.

On each of these issues it is only fair to say that there were some voicing warnings which were both detailed and utterly unconnected to the writings of those who refused to acknowledge any progress. Why did these warnings not have an impact?

Firstly, the bulk of analyses at the time combined some warnings on details with generally positive projections. The OECD, for example, in early 2007 reviewed the economy and said it was robust – while concluding a detailed analysis of the housing market with the summary that there was a relatively small overvaluation which would most likely be corrected gently and over the medium term. It is an uncontroversial fact that every single budget and commitment was made in line with consensus projections for the economy. Unlike in other countries, there was no political manipulation of projections.

Secondly, the thrust of public debate was towards increasing these errors not restraining them. It is impossible to look back though this period and miss the dominance of demands for even more spending, reduced taxes, lower house prices and easier regulation.

As for Leinster House, you can search the record and find isolated sentences and sometimes even whole paragraphs which went against this, but the overwhelming thrust of debate, motions, questions, amendments and even interruptions involved demands for more of the same. One particular spokesman specialised in starting economic speeches with a demand for spending restraint which he quickly followed with a lengthy denunciation of the failure to increase various spending programmes.

To give a fuller picture, in the period from mid-1997 to mid-2008 there were 304 motions during private members’ business. This was a weekly period of three hours where the opposition parties and independents got to control the topic before the Dáil. As government is always accused of keeping the most important issues off the agenda, this is seen as their time to rectify the situation. In those 304 motions there were many demands for major extra spending and condemnations of the failure to provide it. There was not even one single call for aggressive bank regulation, reduced construction activity or higher and broader taxes. There was felt to be a need to debate a motion on greyhound doping, for example, but none for what could be described as a credible alternative economic strategy.

The growth our country saw through that period was of a scale no one predicted or had experienced. In the international economy it was also at a time of sustained growth and optimism combined with weaker regulation in the international economy. There can be no doubt that our broad political system simply was not engaged in seeking out systemic economic risks. There was a failure to examine, debate and act outside of a comfort zone reinforced by consensus estimates and public expectations.

You can follow a narrow blame-game if you want, but all this achieves is to once again miss the challenges which a more comprehensive examination of the last decade poses for all of us. It’s lazy and self-serving. If large parts of our public sphere insist that they have always been right then nothing will change. If you miss these lessons then you end up with politics as usual – which is the last thing our country needs.

Political Leadership Today

What our country most needs in terms political leadership today is a single-minded commitment to the actions central to securing our economic future. The actions required are absolutely clear: a sustained major reduction in the fiscal deficit, the reconstruction of the financial system, strategic investment and the development of an enterprise, export based economy. There is no time to be wasted and, quite frankly, there is no serious alternative.

Almost everyone is now in favour of reducing the deficit in line with our commitments to the European Union. This involves significant annual cuts in expenditure. Given the fact that the bulk of public spending goes in paying social supports and providing frontline services, there is no painless way of reducing spending. It is in the journey from the general commitment to taking specific action that you see the leadership we need – and it is also here that you see a widening political gulf.

One the one hand you have a credible and detailed plan which is being implemented. On the other you have a continued obsession with tactical manoeuvring even if it is at the cost of undermining supposedly principled commitment to reducing the deficit. In the case of Labour, it produced a pre-budget package which fell apart in days and is now pushing an agenda of attacking every specific cut. When it came to the vital issue of reducing the cost of the public service, an obsession with not being on the wrong side of uncertain public opinion led the party’s leadership to take the brave position of having no opinion on the Croke Park deal.

Fine Gael has been willing to support some tough measures, but is now at sea in relation to the overall strategy. It gave an absolute commitment to meeting the agreed targets, then called for €1bn less in cuts next year and finally proposed extra bond borrowing in the region of €4bn to fund its New Era policy.

In terms of the financial system, there remains a lot of debate. There have been, and will remain, few decisions which come with anything close to certainty as to their action. As has been seen in recent days, you can cherry-pick quotes in a complex exchange to suit a predetermined interpretation or you can engage in an honest debate. Tactical manoeuvring may make good politics out of now condemning a decision you voted for – but this has nothing to do with showing leadership. The same can be said of the tactic of opposing everything while proposing nothing.

The political leadership our country needs is one which refuses to participate in the permanent campaign dominating so much of the news cycle, where actions are discussed in terms of popularity and political manoeuvring. We need leadership which is willing to push ahead with the right decisions even if they are the toughest decisions politically. We don’t need pandering or the pretence that general statements are as important as specific actions.

Governance in Ireland

As I’ve said, I believe we look at leadership in too narrow and traditional a way – and that this serves us particularly badly at this moment in time. I think exactly the same could be said about how we view the issue of governance, by which I mean the way we go about implementing and overseeing public action.

Oireachtas

To have effective governance you have to have a dialogue which is balanced and comprehensive – not one which is mostly partisan and tendentious. If every discussion and every report is solely examined for points to be scored the harder and more important business of real oversight is being missed.

I experienced a particularly ridiculous example of the dysfunctional approach to debating serious public policy in my time as Minister for Education. On the morning I launched what was a detailed and evidence-based initiative on technology and research I was immediately attacked by my opposite number for spending the money on this area when there were more important priorities. The initiative received a positive public response and by the time the Dáil debated implementing legislation he was attacking me for spending too little on the area.

There are many things we could do in the Oireachtas to improve the quality of debate and oversight. I would be in favour of significantly expanding the independent research facility in the Oireachtas somewhat in line with the Congressional Budget Office in the United States or the facility in the House of Commons. With this we would have more detailed oversight of government and be able to enforce a principle that we have honest debates between detailed alternatives.

The absence of costed alternatives distorts debate and gives the public no access to making its own evaluation of proposals. To give one example, a compulsory private health insurance model of funding health services is something I disagree with but it is credible to propose it. What is absurd is that it will shortly be 10 years since Labour first proposed it and committed to producing detailed implementation plans and costings. Neither of these have appeared even though their last manifesto promised its implementation almost immediately.

Every private members bill should be independently costed so that people can see the cost of proposals rather than just hear hours of exploitative empathy. Equally every parliamentary group should be assisted to produce an alternative full book of estimates so that they can present their alternatives at the detailed level where the real choices are made.

As a Minister I would welcome the opportunity to have a more comprehensive and constructive oversight of my work through committee meetings which involved a real debate about alternatives to my proposals.

Regulation

The need to move to a new approach to regulation is obvious. We now know from the past that too restrictive regulation can be destructive and that too restrained regulation can be destructive. We have to work hard in implementing a new balance which in systemically important areas like banking will have to err on the side of being restrictive. As a relatively small country, and having only recently introduced regulation into many areas, there will always be a relatively limited pool of expertise to draw on. Proposals to create a critical mass and more active oversight should be proceeded with.

If you look back on the political debates on both financial and general regulation the bulk of comment related to consumer affairs. This is a vital issue, but the system did not show itself to be capable of ongoing engagement with more technical and abstract areas. The provision of more expert staff for the Oireachtas may be an option, and certainly it should be considered when industries are being levied to fund their regulation.

Public Service

The public service is central to governance. In the bulk of public service areas no system in the world has shown a viable model of delivering them other than through a permanent public service. If we want people to teach, nurse, police or administer then we need public servants and their wages and pensions will always be a major element in public expenditure. Over the last two years this has meant that they have received a significant cut in their income and numbers have also fallen.

I strongly reject the idea put forward by some who present our public servants as a ‘problem’ to be addressed. I have seen countless examples of dedicated and effective service which stand proudly against best international standards. We do not have a pampered and bloated public service. Yes our duty to the public means we have to always look for reforms and to seek out problems, but I believe the quality of our public service will, in general, play a central and positive part in securing our future.

The Croke Park deal is a move forward. In terms of enhancing the public service’s role in effective governance there are also initiatives we should consider. A lot of innovations introduced in Britain, such as Departmental Non-Executive Directors, have yet to be proven while some others actively caution against the idea that you can mirror private sector management structures in the public service. This said, a greater career flexibility is probably the only way of making sure that the technical expertise required to oversee many areas is available within the service. I also think there is a role to be played by experts who are not part of the permanent service but can work within it on medium-term basis.

Public engagement in governance

Finally in relation to governance, increased public engagement is essential. If we are to have a effective political system then is must have popular legitimacy. Only when the public is given the information to move beyond whatever the fight of the day is, or the partial presentation of complex issues will they be able to hold the system to account.

This is something that nearly every developed society is struggling with, but there are obvious things we can do. In particular, in light of the amount of public information which is distributed on an ongoing basis, at the end of every budgetary process we should consider giving to every voter each year a report on what the Oireachtas has decided to do in terms of tax and spending. In certain parts of the United States this is relatively common and to has proved possible to present such information in an easily understood yet objective way. Obviously an independent entity within the Oireachtas would be in charge of it.

Public Opinion

One of the lessons which people have missed from Robert Putnam’s Bowling Alone is that periods of low social engagement have generally been quickly followed by dramatic increases. In terms of politics much of the same evidence is available.

There is no doubt that we are in a period of significant political change. The biggest mistake you could make in looking at this is to assume that dynamics we see today will be the same in two years’ time or even next year. The Labour staffer who told a local newspaper last week that Labour and Fine Gael would have over 70% of the seats in the next Dáil was being both presumptuous and arrogant.

This also betrayed a commitment to constant electioneering which has obvious short-term benefits but leaves open the likelihood that voter volatility will be as significant in the next two years as it has been in the last two.

The next election should be fought from when it is called and I believe it will ultimately be shaped by people’s views of the political responses from mid-2008. When our country gets through this crisis - and it will – people will assess many things. Part of it will definitely be policy in the decade before 2008, but it will fundamentally include a much broader assessment.

The speeches about how everything has been lost and Ireland is back to where it began have no doubt already been written, but they will suffer from the problem of not being true. Versus the pre-boom period Ireland will still be in a position of having higher standards of living, lower consistent poverty, higher pensions, smaller classes, more hospital treatments with better survival rates, longer life expectancy, more Gardai on the beat, more education places, more people in work, better infrastructure and many examples of progress sustained.

Between now and then our country needs and our people deserve leadership which is willing to put doing the right thing above election tactics.