The budget made the wrong calls — and now we have to pay the price

MIDDLE-INCOME Ireland is set to receive the bills for a decade of excessive Government spending. Significantly less take home pay will be a reality from May 1 for ordinary workers.

Budgets are about political choices. The balance is between the three options of tax hikes, spending cuts and extra borrowing. This budget chose the two wrong alternatives — higher debt and savage taxation.

Bertie Ahern convinced us we could cut taxes and spend more. We then found this wasn’t real or sustainable economic progress. Instead it was tax revenue based on transactions on over-valued and un-required property. More than €5bn of annual tax receipts were a windfall gain rather than recurring public income. In the process of trying to rectify those errors, we have abandoned the policies that helped create the Celtic Tiger.