Budget measures - Vulnerable must be protected

WITH the country bracing itself for the harshest hair-shirt budget in the history of the state tomorrow, it behoves Finance Minister Brian Lenihan to remember that if his second budget in five months fails to be both credible and effective, Ireland will be in jeopardy.

As the country lurches from financial crisis to crisis, the immediate challenge facing the minister is to get his hands on money through a package of taxes, income levies and savings measures in order to plug the black hole in the economy caused by the frightening fall in the country’s national income.

The dilemma facing Mr Lenihan is to strike a reasonable balance between cutting public expenditure and raising taxes. After years of economic mismanagement by successive Fianna Fáil-led governments, he must guard against taxing his way out of this crisis through what Fine Gael leader Enda Kenny called “slash-and-burn policies” at the party’s weekend Ard Fheis. Clearly, the old reliables — alcohol, tobacco and petrol — are in line for swingeing increases. And with income levies set to double, middle and higher earners can expect to don the hair shirt.