Forthcoming budget - Pain, yes, but banks must be reformed

IT MAY seem unrealistic, unpatriotic even, to challenge spending cuts just as the finishing touches are being put to the grimmest budget anticipated for several decades but, no matter how reduced our circumstances, we will still have priorities.

We will still have obligations to our children and to our future. We will still want to believe that these difficulties will pass and that, in time, our economy will recover from today’s chaos. We will still need our education and health systems to function.

Now that the full, nationwide impact of the cancellation, in last December’s budget, of the summer works scheme for schools has been established through the Freedom of Information Act, we can only wonder at what lies ahead.

Nearly 1,300 schools applied for assistance under the scheme, to paint windows or fix leaks in the roof, maybe buy new guttering. In the majority of cases schools incurred substantial costs — more than €7,000 in one instance — to comply with the process. Even though none of these applications has been processed, the schools will not be reimbursed.

A waste of time and money for everyone concerned.

If a laudable scheme, one that offered value for money and facilitated basic, stitch-in-time maintenance for school buildings, was axed almost a year before the depth of the crisis was acknowledged, what will Brian Lenihan’s first budget bring next week?

The reality is that we all expect it to have a greater impact on our lives than any budget in the past 30 years. Anybody under 40 will, for the first time, see their disposable income reduced because of government intervention. This will be traumatic. Boom-time indulgences, like children’s allowances for everybody without means testing and medical cards for everybody over 70, are unlikely to survive the blitzkrieg.

Many other virtuous, admirable and entirely justifiable programmes, each a basic in a modern, functioning European society, are likely to have to confront new realities. Or, in plainer language, have to go back to the drawing board because their budgets will be slashed.

Almost perversely, there seems to be an air of enthusiasm for this kind of baseline purge but Mr Lenihan should wield his axe with energetic precision rather than just energy. If he is firm but fair, focused and radical, mixes reform with savings, his leadership, and Mr Cowen’s, will be acknowledged as inconvenient but unavoidable truths.

If it turns out to be just a desperate slash-and-burn cost-cutting exercise, disillusionment will exacerbate the pain. Many special interest groups will feel let down — as they will be — and some will be outraged that their plans are being put on hold.

This outrage must be put to good use.

Though governments’ lack of vigilance has contributed to this crisis, the primary culprits are those who gambled more than they could afford to lose and now need to be rescued. We’ll have to stomach the budget but what cannot be accepted is that this crisis passes and that the banks are still free to cause such mayhem again.