Two Brians are reluctant to break the rules
For years the current surplus has provided the bulk of the cost of running the country, on top of much of the funding that has gone into capital projects during the boom years.
As a result the national debt is one of the lowest in Europe which means we have scope to borrow to get us over the hump of what is beginning to look like a dramatic change in our economic fortunes.
Undoubtedly, the housing slump has brought an end to the inflow of money from government taxes that flowed from the housing bubble, and the ground rules for funding the next few budgets face a sharp revision.
Expect nothing terribly inspiring from the government.
Brian Cowen as Taoiseach and Brian Lenihan as Finance Minister have been making it pretty clear that, presumably having made a mess of the Lisbon treaty vote, they do not plan to antagonise Brussels further by breaching the Stability and Growth Pact rules by borrowing above the EU limit.
Minister Lenihan noted how well the national finances have done under the National Treasury Management Agency, with Ireland enjoying one of the lowest debt/GDP ratios in Europe.
Lenihan wasn’t gong to discuss the Budget either on Thursday when asked about the borrowing issue, but in the end he made it clear the Government would not breach the stability and growth pact guidelines when shaping the December Budget.
In the changed climate it was an important answer because it made clear the Government was not about to borrow its way out of this economic slowdown.
He also scotched rumours that the National Pension Reserve Fund would not be raided in the Budget, adding further clarity on what could be key decisions in what will be the most crucial Budget in years.
Borrowing from the Pension Fund would in effect count as borrowing under EU rules, so it does not offer us a way round the EU’s borrowing restrictions Lenihan made clear.
With those points clarified, business people and indeed the country in general is hoping for some government leadership as the country struggles to come to terms with the slowdown.
But judging from the defensiveness of our two key ministers, it looks as if they are all out of inspiration.
Neither, it seems, will the government do anything to spell out in advance of the Budget some confidenceboosting measures that might help businesses to stay competitive and look to the future with confidence.
At this stage, businesses want more than a series of cutbacks in the next Budget.
But it would be a mistake also to expect the Government to come up with all of the solutions.
Perhaps the unions might make a pact with the State to volunteer an extra €5 a week in taxes which the Government would agree to back with a multiple of that figure, a bit like Charlie McCreevy’s SSIA plan, but only in reverse.
That money could be used to promote Ireland as a holiday destination and, perhaps more importantly, to promote Ireland as a prime location for inward investment.
The tax suggestion would probably go down like a lead balloon, but the rest of us cannot just sit back and demand that the Government comes up with all the answers, even if they are overpaid to do just that.
It is perhaps about time we all showed a bit of real national spirit beyond the kind of knee-jerk patriotism produced in the no vote on Lisbon.
