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.