{"id":493761,"date":"2026-05-20T07:49:17","date_gmt":"2026-05-20T07:49:17","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/493761\/"},"modified":"2026-05-20T07:49:17","modified_gmt":"2026-05-20T07:49:17","slug":"simon-harriss-brand-of-middle-class-populism-leads-to-bad-decisions-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/493761\/","title":{"rendered":"Simon Harris\u2019s brand of middle-class populism leads to bad decisions \u2013 The Irish Times"},"content":{"rendered":"

There is a non-trivial possibility that Simon Harris<\/a> will shortly float the notion of a tax<\/a> break for rural publicans. The Vintners\u2019 Federation of Ireland<\/a> (VFI) \u2013 which represents 3,500 mostly rural publicans has been putting its spade work in over recent months and has now broken cover looking for a \u20ac20,000 tax credit \u201clinked to the supply cost of draught products\u201d which presumably means the price they pay for beer. <\/p>\n

The argument they make for this taxpayer handout is exactly the type to make the Fine Gael<\/a> leader and Minister for Finance\u2019s populist antenna tingle. \u201cA pub is more than just a business. It performs a vitally important public function as a hub of social and cultural life, connection and community identity. When a rural pub closes, a community loses more than a business \u2013 it loses a social anchor,\u201d VFI chief executive Pat Crotty said last week. <\/p>\n

Many people would doubtless agree with Crotty and he is probably not overstating things too much when he says many pubs are operating at close to break even. Some 2,200 have closed since 2005 and more than a third of publicans are not confident about the future, according to the body. <\/p>\n

It\u2019s a good, strong and emotive pitch and rural publicans chime nicely with the most-favoured-voter status granted by Harris to \u201chard-working people\u201d. All that is required now for the T\u00e1naiste to take the bait and run with the idea is a couple of outings by articulate publicans, rural pint drinkers and sympathetic politicians on local radio and RT\u00c9 and, above all, social media. This will suffice as evidence of public support.<\/p>\n

\n

The current-year cost of the VAT cut pretty much matches the overrun in the health budget for the first quarter of the year which has prompted the Health Service Executive to bring in restrictions on overtime, limits on the use of agency staff and recruitment freezes<\/p>\n<\/blockquote>\n

Harris is manifestly a clever politician who made a career out of sensing what people want to hear and echoing it. It\u2019s a skill that will help you get elected, but it makes governing in a fiscally responsible manner somewhat tricky.<\/p>\n

His biggest populist fiscal chicken is about to come home to roost and is a good example of the problem. The reduction in VAT<\/a> for the hospitality sector \u2013 on which he hung his and his party\u2019s hat in the negotiations for this year\u2019s budget \u2013 is due to come into effect at the start of next month. It will see VAT for restaurants (and hairdressers) fall from 13.5 per cent to 9 per cent at a cost to the exchequer of \u20ac232 million this year and \u20ac681 for a full year. It doesn\u2019t apply to pubs unless they serve meals and, even then, applies only to the food. (It\u2019s easy to see where the VFI\u2019s idea for a tax break on beer sales comes from.) <\/p>\n

[\u00a0Special savings scheme will benefit wealthy at State\u2019s expense, say economistsOpens in new window<\/a>\u00a0]<\/p>\n

The current-year cost of the VAT cut pretty much matches the overrun in the health budget for the first quarter of the year which has prompted the Health Service Executive<\/a> to bring in restrictions on overtime, limits on the use of agency staff and recruitment freezes. The ever-expanding bill for the health service is a problem, but what cannot be denied is these measures will not shorten waiting times or improve medical outcomes. Scrapping the VAT cut in order to bail out the HSE would seem a sensible but unlikely move. <\/p>\n

Politics is all about making these sorts of choices and Harris seems determined to keep making bad ones. With regard to the VAT cut he appears to have been swayed by the very effective campaign run by the hospitality industry that hinged on the closure of high-profile restaurants.<\/p>\n

Harris ignored the Department of Finance<\/a> view that the underlying data about the numbers working in hospitality and the growth in prices did not indicate anything out of kilter<\/a> with the very high attrition rate that is characteristic of the restaurant sector. <\/p>\n

His really big populist idea \u2013 low-tax investment accounts for the middle class \u2013 seems as equally badly grounded in fiscal and economic reality as the VAT cut. <\/p>\n

Despite being serially announced, the detail of the new accounts has yet to emerge. Even the investment industry is starting to wonder<\/a> when and if Harris will put the taxpayers\u2019 money where his mouth is. <\/p>\n

What we do know is that non-bank economists are of the view that the main beneficiaries will be the well off and it will be at the expense of the taxpayer. Industry lobby group Banking and Payments Federation Ireland<\/a> estimates the funds could attract \u20ac2 billion in the first year, rising to \u20ac30 billion. Tax forgone by the exchequer would rise from \u20ac20 million a year to \u20ac900 million \u2013 assuming there is no tax on income from the funds \u2013 and there is no guarantee the money in the funds would be invested in Ireland. <\/p>\n

It\u2019s the Government<\/a> initiative that nobody asked for, but everyone will want. Like Harris himself, it is a child of the boom and should be quietly shelved in the current period of economic uncertainty. <\/p>\n

The same holds for the tax cuts \u201ctargeted at workers\u201d the T\u00e1naiste is still promising in the autumn. <\/p>\n","protected":false},"excerpt":{"rendered":"There is a non-trivial possibility that Simon Harris will shortly float the notion of a tax break for…\n","protected":false},"author":2,"featured_media":493762,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[73],"tags":[962,79,22779,18,553,3428,2450,60,19,17,44,4520,24727,142272],"class_list":["post-493761","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-banking-and-payments-federation-ireland","tag-business","tag-department-of-finance","tag-eire","tag-fine-gael","tag-government","tag-health-service-executive-hse","tag-hse","tag-ie","tag-ireland","tag-simon-harris","tag-tax","tag-vat","tag-vintners-federation-of-ireland"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/116605810524404362","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/493761","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=493761"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/493761\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/493762"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=493761"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=493761"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=493761"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}