Budget 2011 - There must be a price on these cuts

SO, there it is, another portion of the bill for our Icarus decade has been presented and it does not look at all pretty.

Yesterday was a dark day for Ireland and though no-one expected anything else so much more needs to be done to make yesterday’s slash-and-burn package palatable and ultimately successful.

It was another day that marked our failure as a functioning society with the principles or the political and regulatory institutions robust enough to resist some of the worst human nature can — and did — throw at us. It was a day that showed the Ahern debacle, and the roles his cheering supporters played in it, in its bank-breaking, optimism-crushing, anti-patriotic actuality. Accepting the depth of the crisis and responding appropriately is one thing but accepting the bitter cure is dependent on so many other contingencies.

This was the first instalment in a four-year plan and it would be a very brave Government who would propose the second unless some simple issues that should have been resolved long ago are finalised.

We need to see rogue bankers and their professional advisors in court; we need to see profound public sector reform implemented; we need to see proposals that will make our political process more effective; we need to see pay levels at the top tiers of state and semi-state organisations, and their knock-on affects, confronted; we need to see real progress in resolving the private sector pension crisis.

There are so many other issues, all of them aired time after time, that mark this country down as charming but pathetic neighbours and finally confronting these throw-back conventions must be the price extracted from Government for accepting the burden of economic failure. Anything else means its only a matter of time before some other decent man has to stand before us to tell us that we’re going backwards.

Yesterday was a day that had its roots in the seductions of the property market and the blandishments of politicians dazzled by smoke-and-dagger economics, politicians drunk with the prospect of buying power more or less in perpetuity with bloated tax revenues.

The enormity of the failure was written on the faces of so many of the Fianna Fáil players in the tragedy yesterday as they sat, mute and powerless, behind Finance Minister Brian Lenihan as he undid some of their wilder excesses.

Though you might argue about yesterday’s details the intent to bridge the huge, unavoidable, crushing gap between our income and our expenditure is clear enough. Whether that intent is powerful enough to get international financiers or markets to view Ireland in a better light remains to be seen. It is a measure of our powerlessness that, despite the hardships imposed on middle-income earners, low-paid workers and those dependent on welfare payments, that we can only hope our reputation is enhanced by these difficult cuts.

People struggling to live on welfare will have to somehow get by on less. Low-paid workers, who have an income barely ahead of welfare rates, will have to pay some tax for the first time. Though the idea that nearly half of Ireland’s workforce remain outside the tax net is not sustainable it will not make the imposition any easier to bear. As ever middle-income families do the heavy lifting and, even at this distance, it is impossible to see how they can sustain another budget, much less three, like this one.

Neither will Mr Lenihan’s budget alleviate the sense of injustice and anger felt, rightly or wrongly, by those already finding the day-to-day struggle more challenging than anyone would wish.

The precariousness of our national finances, and our utter dependence on the kindness — or otherwise — of strangers, was reflected in changes in tax bands that will reduce the disposable income of every person earning a wage in this country.

Increases in tax levels on petrol and diesel, an increase in college registration fees, a reduction in tax allowances for pension contributions and the first cuts in pensions paid to former State employees and many, many other measures, unimaginable just three or four years ago, usher in the age of austerity that until yesterday was no more than a throwaway phrase.

This country is broke and broken. Yesterday’s danse macabre was a small set piece along the road to redemption or final destruction but we can still shape our future. We can insist that the price of accepting this package is that government stop making excuses, stop hiding behind convenient barriers and take on, once and for all, the many vested interests that have brought this country to its knees.

If they don’t chaos is just around the corner.