Government finances - Public cuts cannot be avoided

THE government task force set up to identify savings in public spending — An Bord Snip Nua — is expected to have an impact on tens of thousands of families within weeks.

So great and growing is the gap between government income and expenditure that a programme of cuts across all departments will begin more or less immediately. The objective is to quickly cut hundreds of millions in exchequer spending. Though the details are as yet just proposals the sense of urgency — and hopefully determination — surrounding this commitment can only restore some sort of sanity to our finances. The measures can be the first steps too in trying to rebuild international confidence in an economy and financial system that no longer enjoys the reputation it once did; a reputation that remains central to returning our economy to growth.

We should not be under any illusion that the process will be a five-day wonder either. This exercise will play out over the next five or six budgets. We are told that until 2015 at least government will have to either raise taxes or cut expenditure to restore order to the public accounts. Stark choices indeed. The implications are grim and, despite external influences, a very poor reflection on how we managed the boom years’ wealth.

These first cuts will have consequences for services, incomes and, in some cases, jobs. Sadly, these measures are unavoidable following revelations that the Government needs to save an extra €2 billion. This second package of savings is in addition to the €2bn in cuts announced in last October’s budget.

The task force — the Special Group on Public Service Numbers and Expenditure Programmes (SGPSNEP) — through its chairman, Colm McCarthy, has promised that every aspect of government expenditure will be reviewed.

Though it is tragic to have to cut hard-won services and jobs there simply is no alternative; we just don’t have the money to pay for them. Borrowing more than the one-in-five euro we now borrow for current expenditure is not an option either.

No matter how we might wish it otherwise this is our immediate reality. In this context statements like those made in the last few days by IMPACT boss and former Irish Congress of Trade Unions (ICTU) president Peter McLoone, that unions will “refuse to engage” in social partnership talks if the Government moves to cut public sector pay or jobs, are as unhelpful as they are unrealistic. ICTU general secretary David Begg also expressed strong opposition to the possibility.

It would be comforting to imagine that our public service, despite collapsing revenues, can remain detached from the carnage unfolding in the private sector. In their heart of hearts union leaders must know this and, despite the appalling and immoral behaviour of so many business leaders, must accept that things cannot stay as they are.

We don’t even have time for the debate, the threat to everything we have achieved is too great and too real.