Fine Gael beats FF into second place in RedC/Sunday Business Post poll

The Red C poll in tomorrow's Sunday Business Post shows that for the first time since polling began, Fine Gael is 7% ahead of FF.

This public opinion poll however comes with a health warning. Red C carried out their monthly poll for the newspaper on Monday, Tuesday and Wednesday - at the height of the medical card controversy. In addition opposition to education cutbacks had begun to gain momentum. The IFA has begun a campaign against cutbacks in agriculture whilst the closure of army barracks has spawned further opposition. Unemployment has risen sharply and will continue to rise in the immediate future. The increase in health charges is highly unpopular. VHI charges will also rise as a consequence of budget decisions. The underfunding of local authorities will cause a sharp rise in rates and water rates. In addition a supplementary budget cannot be ruled out- probably after next Summers Local Elections.

A fall in support for FF is not unexpected. However the scale of the fall is rather surprising. The party is down 10% to 26%.FF has shown a capacity to recover in the run in to General Elections. However the harsh decisions required to put the economy on a firm footing may sap the party's energy somewhat. The results are hugely encouraging for FG and Labour. However both parties must convert this support into votes at the ballot box. FG will underestimate FF at its peril. Prior to the 07 General Election FG rose sharply in the polls but fell back in the final week of the campaign.

• Fine Gael 33% (+5%)
• Fianna Fail 26% (-10%)
• Labour 15% (+6%)
• Greens 6% (-1%)
• Sinn Fein 10% (+1%)
• PDs 2%(-1%)
• Independents/Others 8% (+0%)

Just 23% of those polled said they were confident the Government could manage the public finances out of the recession, down 19% since last month, while 59% said they were not confident and 21% said they did not know.

Ireland-Uncertain economic outlook

Since the General Election there has been a growing realisation that the economic picture -as painted by the Government during the election campaign- is none too rosy.
In the course of the 2002 General Election campaign Charlie McCreevy denied claims from the opposition that cutbacks were inevitable. No sooner was the election over than massive cut backs and stealth taxes were introduced.
Roll on 2007 and we have a carbon copy of 2002. There is likely to be a €1bn shortfall in property taxes for the full year. There are predictions of a €1.5bn deficit for the central Government Exchequer this year. Election promises have been quietly shelved and cutbacks introduced. The Government has decided to slash up to €12 million worth of funding for rural roads as part of its programme of post-election cutbacks. The HSE is introducing cutbacks in an already underfunded Health Service. Patient care will suffer.
More cutbacks and stealth taxes are inevitable.
In 2002 the introduction of massive cutbacks and stealth taxes allowed the Government to accumulate sufficient financial resources to loosen the purse strings for a two year period prior to the 2007 General Election.
We can expect the same approach from the FF-PD-Green Coalition. Savage stealth taxes and cutbacks introduced in 2007 will allow the Government to accumulate sufficient financial wherewithal to produce a feel good factor for the two years prior to the 2012 General Election. The electorate has short memories.

The Irish economy is floating on a sea of credit. Rises in interest rates are hitting disposable income.
There was a significantly higher deficit of €3,271m on the current account of the Balance of Payments in the first quarter of 2007 compared to one of €2,325m for the same period in 2006.
The economy has been over reliant on building and construction.
Manufacturing industry is gravitating towards low cost economies. Much nonsense is spoken about Ireland's supposed advantages such as the English language and education system.
In India there has been a huge output of skilled graduates who are particularly attractive to Multinational Companies. The country with the largest number of English language speakers in the world is India. There is much waffle in Ireland about upskilling. There is an assumption that there is no upskilling in places such as India Hong King and Singapore.

When Government Ministers berated the opposition- in the election debates -they failed to address the issues that really matter.
The economic road ahead appears quite rocky. Brian Cowen will probably introduce a harsh budget in 2007.