Public spending - State faces autumn of discontent

The decision by the Government to appoint a group of three experts to scrutinise projected expenditure will inevitably bring the cynical reaction that it is a handwashing exercise in anticipation of public outcry at the present and future cuts in public spending.

There is no denying the experience and credentials of those appointed. Maurice O’Connell is a former Governor of the Central Bank; Dermot Quigley is the ex chairman of the Revenue Commissioners and Kevin Bonner is a former secretary general of the Department of Labour.

Collectively, their remit is to go through projected expenditure of each Government department and the result will influence the Estimates on which the Budget is based.

In layman’s language, the Government is sending the controversial issue of cuts in public spending out to the wing. It is reminiscent of a similar move by former Taoiseach Charles Haughey back in the 1980s when he had a fetish about belt tightening.

Although the Cabinet insist the subject of cuts was not on their agenda yesterday, it seems unlikely the state of the economy was not discussed.

The Government left a serious after burn in the trail of yesterday’s Cabinet meeting, which sat with the spectre of the ESRI predicting a Government debt of 1 billion euro hanging over its deliberations unless something drastic is done to control the economy.

Finance Minister Charlie McCreevy had already procured savings of 300 million euro before yesterday’s meeting, largely through cuts in staff recruitment in health, and making health and third level education more expensive, as well as cutting Overseas Development Aid.

The Cabinet will return from the summer vacation to face into an autumn of serious discontent in the public sector. Workers across the spectrum of public service who were anticipating a windfall from the benchmarking process, have had that long fingered for at least 18 months.

On the broader front, because of the cuts in public spending and a cost of living, which seems to increase on a daily basis, negotiations for another national pay agreement will be a tough and drawn out affair.

At this stage, there is no certainty that there will be a successor to the PPF and the warning from both the Taoiseach and Mr McCreevy that workers must be realistic in their wage demands, and that we have to live within our means, will get a very jaundiced reception.