Savage cutbacks are a deliberate power play for the next election

WE are about to discover the importance of public spending to Irish life. That’s the real, but largely ignored, story of Budget 2003.

Every area of Irish life affected by public spending is about to face a major crisis or, alternatively, about to undergo fundamental change.

It will happen in the course of the next 12 months, and the crises that are generated will: (a) be caused by the Government; (b) have very deep ramifications for our social and economic capacity, and (c) be totally unnecessary.

The crisis in public service we are about to see has been brought about by an agreement (in fact, I see it as a conspiracy) between a number of Government ministers. They include Ministers McCreevy, Harney, and McDowell, and probably the acquiescence of the Taoiseach. Their motive is partly philosophical and partly political. They believe that if they screw everything down now as tight as possible, it will release resources to be spent in time for the next election.

This is not about getting the economy into shape because it's in very good shape and needs no more than care right now. This is a power play. It is about shaping the kind of society they want to see, and about building the political battleground for the next election.

A lot of people are going to suffer in the process.

To understand the depth of the crisis ahead, you need to look at the Estimates and the Budget together. At the start of the Book of Estimates, there is a general note that says "the 2003 Vote allocations shown in all cases are pre-Budget estimates and do not take account of any changes which may be announced in the 2003 Budget statement". That note is there to emphasise the point that the Government may indeed make decisions on Budget day that will affect the spending plans of Government departments.

What the Government decided was to spend nothing extra on public services.

Last year, we spent about €25 billion on public services. Apart from public service pay increases and changes in social welfare rates, the total additional spending proposed by the Government was €2.8 million. That is the lowest figure for additional spending on services in the last 30 years far lower than in all the years of financial crises we endured. It's as close to zero as it is possible to get.

I have been reading Budgets for nearly 20 years, and in all that time I have never seen a more shocking figure. The only thing that has surprised me more than the figures themselves has been the absence of any real focus on them. Because, believe me, the effects will be profound.

The €2.8 million I mentioned will go to the Department of Health, whose minister is committed to an additional €1.1 billion to implement the first phase of the National Health Strategy. So that goes in the bin, right now.

It will not be implemented. None of it.

But that's only the beginning. The Government has decided that not a penny will be added to the Book of Estimates, right across all departments. And the Book of Estimates represented a scorched-earth approach to public spending. After publication of the Book of Estimates, the only ray of hope, for thousands of essential services and the people who depend on them, was the Budget. There is no hope now of averting not one, but dozens, of significant crises in public service.

Let me give some examples.

You might expect me to concentrate on disability services, and it is certainly true that those services must now look forward to their worst year in many a long time. Next year will be the European Year of Disability, and we will celebrate it with massive increases in waiting lists for every aspect of disability services.

The Government hasn't just turned its face away from people with a disability, it has turned its back and slammed the door. I hope when people with disabilities are invited to turn up to the high profile PR events being planned for January to mark the launch of the Disability Year, they will know what to do.

Let's look for a moment at the combined effect of the Budget and Estimates in some other areas. All the figures are in the Budget documents I have added 4.8% to each figure, because that is the rate of inflation Charlie McCreevy forecast for next year in his Budget speech.

According to the documents, the public investment in the development of economic services has been cut by 10.8%. Within that, the investment in industry and labour services is down by 9.8%, services to agriculture down by almost 14%, and services to tourism have been frozen. Public investment in forestry is to be cut by a quarter the surest signal possible that our forestry is well on the way to being privatised.

Overall current investment in infrastructure the one area where every economist agrees major spending is necessary has been slashed, and the paltry commitments in capital spending will lead to a massive slowdown in development throughout the country. Communications and transport have been savagely cut, in a series of extremely short-sighted measures that will knock us further down every published competitiveness league. Charlie McCreevy clearly defines competitiveness only in terms of low pay. It obviously hasn't occurred to him that slashing the resources available for broadband development will affect our standing and our ability to attract and maintain investment and jobs.

Across the broad area of social spending, it is impossible to find an area that hasn't been cut or frozen. Of the roughly

€7.5 billion spent by the Department of Health and Children, almost €6 billion goes to health boards, and that money has been absolutely frozen. If it stays that way, the health boards will simply be unable to cope with increased demand. Either people will suffer and die, or the health boards will once again be secretly told to accumulate massive debts.

The picture is equally frightening in education. Third-level education has been screwed down, at a time when we desperately need to be investing more.

It is absolutely certain now that the much-discussed fees for third-level education will be reintroduced in time for the next academic year. And there will be no investment at any other level. I know of at least one secondary school where students have to be crammed into one small part of the school because the other part is a fire risk. There will be no relief for them this year.

The other major area of public investment is the general security area.

Defence, justice and garda spending have all been savagely cut. The effect on all of us could be catastrophic.

The point about all this, of course, is that it is being done deliberately. Ireland doesn't need this savagery. It is a conscious political choice being made for entirely self-serving reasons. After a year of crisis and that is what lies ahead the questions we will need to ask are these. Will the brainwashing work? And will the people who have done all this damage get away with it?