Emergency budget 2009 - The crisis must be confronted

THERE was an air of inevitability about last evening’s announcement that we are to have an emergency budget before the end of the month.

Things simply could not continue as they were without immediate and radical intervention. The air of drift and indecision had become a real problem at home and amongst those still brave enough to consider investing here. The malaise needed to be confronted with resolution and imagination. Yesterday’s announcement promised the confrontation, we will have to wait and see about the resolution and the imagination.

Let us hope that this emergency package, unlike its predecessor published barely six months ago, works.

We simply cannot afford another series of demeaning and amateur U-turns. We cannot afford another series of disruptive and polarising public demonstrations. We must have a package that is realistic, both in ambition and implementation. We must have a package that is seen to be fair. It must offer at least the prospect of meaningful gains in the longer term paid for by an immediate reduction in incomes.

The extent of those reductions will not be known until the budget is published but it would be foolish to expect that they will not have a real impact on lifestyles.

Though it might be pleasant to imagine that the highest income earners might bear the greatest proportion of the pain it would be foolish to believe that we can continue to have a situation where 40% of workers pay no taxes at all. It is inevitable that some people will pay taxes for the first time after the emergency budget. The rate is the only thing at issue.

Yesterday’s exchequer returns made it impossible to avoid the inevitable a moment longer.

The exchequer deficit has widened to €2.1 billion in only the first two months of the year, the worst for the period since at least 1981, Finance Minister Brian Lenihan admitted in Dublin yesterday. Only a year earlier that figure was e125 million.

Tax revenue fell to €5.76 billion in the first two months of the year, 24% of what it was in the same period 12 months earlier.

The reality is that we are all blue in the face from reading one set of figures more dismal than the other. We all know that we cannot continue as we are and that painful and unpleasant measures will have to be implemented.

At this point each and every one of us has an obligation to understand the reality of the disaster facing us all. If we, workers, employers, unions, government and representative groups of all hues persist in blindly prioritising our sectional needs we will not come through this crisis without great social and individual pain.

This emergency measure will make a lot of people angry; it will disappoint many more. However, the alternative is beyond contemplation.

We all have a duty to try to understand that.