Budget 2011 - Inequity will stymie hope of recovery

THIS afternoon we will know how Taoiseach Brian Cowen, Finance Minister Brian Lenihan and their IMF/ECB overseers plan to restore some sort of sanity to the finances of this angry and bankrupt country.

Each and every one of us, every family and business, must hope that their proposals work. Ireland simply cannot afford, economically, psychologically, or in terms of social unity or market perception, a repeat of last year’s failure when Mr Lenihan assured us that “the worst is over,” as he introduced a budget that cut €4 billion from the economy. A figure that seems quaint in today’s terms.

Hardly a household will avoid attention and some arrangements, especially social welfare payments and state pensions, traditionally thought untouchable, will be cut. None of this is as anyone would wish, indeed the sense of inequity and failure it will probably provoke may polarise society even more at the very moment when a sense of common purpose is essential. This, in the long run, may prove a greater challenge than our grim economic situation. Nevertheless we don’t have too many options.

The great challenge today will be to bring spending more in line with revenues while retaining the capacity to generate growth. This hope is far more easily expressed than achieved and anything that will facilitate it must be implemented unless there are very good reasons not to. There has been much talk of stimulus packages that might begin the rejuvenation of our economy. These calls have focussed on economic stimulation though there is, as we try to pull ourselves up by our boot straps, a crying need for stimulation in other areas.

We need to stimulate the idea of equity and social justice so these great, inspiring principles can energise this society rather than divide it.

We are told that reductions in top-level, semi-state and state pay packages must wait for another day because of contractual obligations. We are told that the incumbents’ successors will face cuts but that today’s lot are ring-fenced. What absolute nonsense, what dishonest, self-serving and divisive claptrap. Call them in, and as the ECB and the IMF did for the rest of us, acquaint them with a new reality. By all means let them object and go to court if they wish, they can even quit if they feel strongly enough.

To suggest that, as we cut welfare and pensions, that they are untouchable is immoral and, almost worse, the kind of cowardly leadership that got us into this mess in the first place. The same attitude must be adopted to those who got pay rises in the intensive-care banks. Recent ESB pay rises fall into the same category.

This Government, typically, has left this issue for their successors who must realise that it will have to be confronted if they are to get the social support they will need to balance the books. It is, as Brian Lenihan said on another budget day, no more than a call to patriotic duty; the duty to protect social cohesion and justice.

And there is another certainty about today’s budget. Just as the snow and ice holding the country in its grip this morning will pass so too will the hardships imposed this afternoon. They may be severe and unfair but if they work, and that is the biggest if of all, they could well be the first steps towards recovery. Despite all of our anger and frustration we must allow ourselves to believe that much at least.