Madam, - In times when all economic analysis is "going forward", a brief glance backwards is enlightening. Brian Cowen's Budget 2008 (submitted in December 2007) included an "efficiency review" comprising measures such as "requiring Departments to examine all administrative spending", "specific proposals to maximise administrative savings in their area", "the need for better sharing of certain services"; and "efficiencies in management. . ." None of this was to "jeopardise the maintenance of front line services".
Sound familiar? Even assuming that the measures announced in July this year were more targeted and effective (which is difficult to argue), it is still frustrating to see that these result in a saving of €500 million, while tax receipts are down four times that. So, as there has been no leadership in the past year, how might we see it now?
The "Head to Head" debate in Monday's edition reflected the fact that even the most fundamental decisions, such as tax rates, are divisive. Thus, some unpopular decisions fall to be made. Once this is acknowledged, there are options.
For example, last year knock-on revenue was generated which was one-and-a-half times the tax concessions made. This gives credibility to arguments for moderate tax cuts. Likewise, our debt/GDP ratio is healthy and provided borrowing (which now seems inevitable) is moderate, and funds capital projects, it can be done successfully.
In addition, while the National Development Plan is considered sacrosanct, there are compelling arguments for feasibility studies to analyse the return on investment for certain projects (leading to their postponement, at least).
Another option which has been floated is "dipping" into the National Pension Reserve Fund, which would require legislative amendment. Again, while such a proposal is radical, it is certainly viable. The NPRF is, to its credit, enormously dynamic. A legislative commitment to reimbursing the fund would tie future governments. In addition, the current legislative provision for privatisation revenue to be attributed to the fund makes reimbursement possible if the funds extracted are moderate and the political commitment is strong.
It is political strength that will be tested in the next 12 months. - Yours, etc,
TOMMY CANAVAN,
Breaffy,
Castlebar,
Co Mayo.