Michael Smith conducted a wide ranging interview with the Minister for Finance, on the eve of the Budget
MS: How were you influenced by your childhood?
MMG: We’re all a reflection of where we come from and our childhood experience. I had a fantastic childhood and come from a very humble background. And I suppose I was really determined growing up to take the opportunities that I had and which my parents didn’t have by virtue of their own life experience and their journey. I think it’d be a hunger and a drive to do well but also it gave me a very good sense of perspective about what’s most important in life and it definitely helped to lead me to a life of public service. Because I think there’s great meaning and great value from public service and I get huge enjoyment from it; and I think that concern can be traced back to my background.
MS: What do you consider your main achievements in politics so far?
MMG: I really think it’s for others to come to a view about what your achievements are and for me much of the satisfaction comes from the quiet, private moments that you have interacting with constituents in your office on sometimes extremely sensitive and personal issues and helping them through those issues; and I know I and my team have changed lives for the better in many, many instances.
MS: Could you mention an instance of that?
MMG: In our role you come across all kinds of circumstances: serious illness and bereavement and tragedy and financial difficulty — just instances where the system has let somebody down. I have had cases including just recognition of birth certs and recognition of parentage — things like, that that have been really life changing for people.
I believe in giving people opportunity and working with others in a spirit of co-operation and collaboration; being decent and having good values in that sense
MS: How would you describe your political philosophy and your vision for Ireland?
MMG: You know it would be it would be centrist by nature. I believe in giving people opportunity and working with others in a spirit of co-operation and collaboration; being decent and having good values in that sense. And so my philosophy is a pragmatic one but it is it is certainly about working towards a country that is fair and that affords opportunity to people.
MS: And a vision for Ireland specifically?
MMG: I think there is very good economic opportunity in Ireland and I think we have work to do to bring the quality of our services up to match where our economy is at and where public expectations are rightly high, particularly in housing and that is undoubtedly the number one domestic priority as far as I’m concerned.
MS: Who are your political heroes, nationally and internationally?
MMG: Brian Lenihan had a huge influence on me. I did work closely with him in those latter years. I was only a backbench TD, newly elected but came from a financial background and so Brian would have taken me into to confidence. I’m very proud to have a portrait of him hanging in my office in the Department of Finance because I have a huge amount of regard and respect for him.
MS: Anyone internationally?
MMG: No, I’ll leave it at Brian. I’m happy with the one.
MS: So just in terms of your political philosophy or your politics would it be fair to describe you, as has been done, as socially and economically conservative?
MMG: I’m not really into labels. Judge me by my response on any given issue. I don’t think I’m conservative when it comes to ambition for Ireland and the need that I see for us to improve the services we provide. I get very frustrated at the experience of many families who have a child with a disability. I just think we can do far better. I’m not conservative when it comes to people and this country. We are the person that we are.
MS: Do you believe in equality and if so what type?
MMG: I believe in human dignity and respect for each other and I think that is evidenced by my approach to politics. I can work well with people and because I respect others I respect difference and I absolutely believe in equality in all respects.
MS: Would you be more inclined to equality of outcome or equality of opportunity?
MMG: I think equality of opportunity is one that we can most assure. I think through our policy decisions and safety nets we have and the supports that are in place and providing resources in disadvantaged areas. I think you can go a long way to providing equality of opportunity. You can certainly aim for it. I think guaranteeing equality of outcome is not really possible because there are so many variables involved in that but I do think that you can go a long way as a country to making sure there’s an opportunity for everyone and I think we have made progress in that regard but there are communities now that they feel they are that behind and I think that is work we have to do better on.
MS: How would you define the ideological differences between FF, FG and SF?
MMG: I’d prefer to speak about Fianna Fáil and who were are rather than defining us relative to other parties. We’re a centre-left party. We believe in giving people opportunities through education and employment and support for the most vulnerable. We believe in investment in education and we believe in the enterprise company. This will be reflected in the decisions that I make in the budget.
MS: What do you consider the major dangers to the economy? Is there a danger of an Irish or a global recession, near-term?
MMG: I think the biggest immediate danger to the health of the global economy is the impact of tightening monetary policy on demand. As an open economy that’s a model of successful exports, I think that is the single biggest risk near term. I don’t think a global recession in the aggregate is likely but it is possible that some of Ireland’s main trading partners, and highly-developed countries generally, would experience recession but developing economies will grow at a level to sustain some global growth.
I don’t envisage a recession in Ireland but growth will be much more modest than last year’s near 10%, by whatever measure you use: GDP or modified domestic demand. GDP I think will be pretty flat in 2023, and I note the ESRI has just forecast negative GDP growtn of 1.6% for the year, but we will have growth in what we would regard as a better measure of our economy, modified domestic demand, and we will have growth next year.
MS: What will the key priorities be for your first budget?
MMG: The cost of living, housing, and an enterprise economy.
MS: What will you do to curtail inflation?
MMG: The key thing there is not to add too much fuel to the fire. Inflation will naturally fall and rising interest rates will play their part in that. The important thing for the government is not to do anything that would push inflation in the opposite direction.
MS: Is our taxation system in general fair and is our corporate tax regime ethical?
MMG: I believe that our taxation system is fair overall — we’ve a highly progressive income tax system. The amount you pay even as a proportion of your income rises very significantly in line with your income. I think that is the most fair way to do it. Our corporate tax system is ethical. It has changed very significantly in recent years. We’ve had a whole range of different reforms introduced and we will have more of this in the Finance Bill with the introduction of the additional two and a half percent rate for the very large companies.
MS: Have quality of life indicators moved centre stage as envisaged in the programme for government?
MMG: Yes, and we are now investing more and more in measures of well-being and on budget day we publish a paper that it looks beyond GDP. That’s the title of it and it looks at all of the metrics that are important when it comes to assessing quality of life. I am conscious that living standards are taking a step over the last 18 months because of inflation, but I do think across next year we will be making gains again in living standards.
MS: Do you think we could ever have a single figure that shows, the same way as GDP does for the economy, the direction which quality of life has taken — a 3% improvement or whatever?
MMG: It is difficult to quantify because it depends on the weighting that you attach to the different elements that feed into any quality of life metric.
MS: Do we have enough capital taxes, and would you be in favour of higher property taxes, in principle?
MMG: We are getting into kind of specific territory (which is not permitted in the run up to the budget). Broadly speaking we do have well established capital taxes at a rate of 33% which have been both higher and lower in the past and over time we will have to make a decision about where we want them to be but we do have an established system of collecting wealth in Ireland through our capital taxes, property taxes and other ways.
MS: Is there scope for more sugar taxes?
MMG: We do have a sugar tax but we do have to be conscious that the cost of living is really high for many and low-income households feel the burden of high grocery costs more than other households. We just have to consider when is the appropriate time to introduce further measures in that area.
MS: Do you expect the current government to improve inequality during its time in office and under what measure?
MMG: Yes I do, and when you look at the pattern over recent years income equality in Ireland and poverty levels have improved so we have established ways of measuring that through the ESRI and other fora. Over the course of its term in office will have made progress on reducing inequality.
MS: Do you think this government is making adequate progress on housing and health?
MMG: I think we are making progress on both but we need to do more and we need to do it faster.
MS: What do you think of Sinn Féin’s housing policy?
MMG: I think it’s unrealistic to say that if you spend billions of euro more next year you’ll get tens of thousands of extra public houses next year. It just doesn’t reflect the reality of how homes get delivered: there’s a lengthy lead-in period. There are real capacity constraints — there are labour shortages and materials inflation.
The government and the Department of Housing aren’t short of money when it comes to building homes and the other issues have constrained delivery, it has not been funding.
MS: Do you think there’s an ideological obstacle to be overcome to provide more housing?
MMG: There certainly is not. I mean we’ve gone back to building public housing at scale — seven and a half thousand direct public home builds last year, the highest in 50 years. We need to do more and this government I think has pushed building housing and building public housing to the centre of policy.
MS: Do you think ideological reasons account for the move away from local authorities building housing themselves?
MMG: I think performance varies around the country but some of them have got out of the practice of building homes and they have to step back into that space and to do so aggressively and working with approved housing bodies. I think it might be an issue of capacity and expertise. It’s not happening as well as it should but in many places it is.
MS: Do you think the national development plan and the national planning framework get the balance of growth right between Dublin and the rest of the country, and what are you doing in the Department of Finance about it?
MMG: So we are reviewing the national planning framework at the moment because a lot has changed in Ireland over the last number of years and remote working in particular opens up enormous opportunities for rural and regional Ireland and that will be reflected in the new NPF and then underpinned by public capital-investment decisions.
MS: By what amount do you think greenhouse gas emissions will be reduced over the term of this government?
MMG: I think meeting our targets set out in the climate action plan is going to be challenging. But we will do everything we possibly can to get there. The eventual target as you know is 2030 and then 2050 and I think we are making progress in investing more in the NDP to help on the decarbonisation journey.
MS: On transportation, will this government meet targets of two thirds of expenditure being on public as opposed to private, ie mostly roads, transportation?
MMG: Minister Eamon Ryan would say at the moment that we’re not achieving the two to one ratio set out in the programme for government. In other words that that he’s not in a position to spend that money on public transport projects because a number of them are stuck in planning. We are reforming the planning system with the new planning legislation that will be brought to cabinet by Darragh O’ Brien in early October. There will be new planning and environmental courts set up as well later this year to try and accelerate the delivery of the public transport projects.
MS: Will the Galway bypass be built?
MMG: I hope it will and I want it to be built. Obviously we respect the planning process. It has gone back into An Bord Pleanála but it is a city that is choked with congestion at the moment. Yes we will do more in public transport and active travel in Galway but I think there is a need for a relief road.
MS: When will Cork and Dublin get a directly elected mayor?
MMG: I think that will take some time. The people of Cork have already voted against having a directly elected mayor so the government’s priority now is to get it up and running in Limerick because it’s the only city that actually voted to have a directly elected mayor so that legislation is going through the Oireachtas.
MS: Big one here: do you expect to replace Micheál Martin, and when?
MMG: [Laughs] Well I’ve always said I’ll cross that bridge when I come to it and you know I am ambitious for Ireland, not so much ambitious for myself. But you know time will tell.
MS: Can you give us an exact date?!
MMG: I certainly can’t because I think Micheál is going to be there for quite a while but you know I have no decision made on that and I think he’ll be there for some time yet.
MS: Is there any thinking within your department about the need to plan out for the economic prospect of a United Ireland, and can we afford it?
MMG: I think the focus really is on building relationships with all strands of the community in Northern Ireland. We have invested a lot through the shared island initiative and there is ongoing work to improve relationships, to build dialogue, to increase the flow of cross-border investments and the question of the economic impact of a united Ireland is one that will be considered over time. But I don’t want to take any steps that would be seen as provocative because I think for now the focus is on getting the institutions there up and building relationships, and we are now directly investing in Northern Ireland which is I think a very welcome development.
MS: As a father of a young family, how do you balance your life as a Minister and your responsibilities as a father of seven children?
MMG: I’m not sure how well I do, and certainly not in the lead up to a budget. But they are they are a true gift and I do love nothing more than getting as much time as I can on Saturday and Sunday to spend it with them particularly to be on the sidelines at their sporting and other activities. I love cheering them on and I’m very conscious that time moves quickly, they grow up, and I want to be part of it and I want to be part of it as much of that growing up as I can, recognising there is there is a sacrifice because of the job I have.
MS: What would you hope would be your political legacy as minister for finance and secondly at the end of your career overall?
MMG: Well I think you always want to leave the economy in a strong position and leave the finances in a position of real strength. I will be laying out a plan for the management of our finances over the coming years that I would expect future governments to honour, because we represent the right thing to do and will really secure our future.
MS: And at the end of your career?
MMG: That’s a long way away so far too early to define that.
MS: If you were stuck on a desert island is your preferred company Micheál, Paschal or Leo, and why?
MMG: I will answer that one for you and you might predict the answer but not for the reasons that you would probably think. Of course it would be my constituency colleague, Micheál, because I’d be afraid that if I was stuck on on an island and he was back home canvassing the people of Cork Central that would be something I’d rather avoid.
