Budget 2018: Hope must be the order of the day

During US president Franklin D Roosevelt’s 1933 inaugural address he told the American people that the only thing they had to fear was fear itself.

It was a cryptic remark that was not immediately understood but, in fact, his message was quite simple.

Speaking in the wake of the 1929 Wall Street Crash and the Great Depression that followed, he took the opportunity to remind his fellow citizens that their future and wellbeing lay largely in their own hands.

He chided them for exhibiting “nameless, unreasoning, unjustified terror” by taking their savings out of the banks in a state of panic and, thereby, making the economic situation worse.

His words had a calming effect and helped to steer the world economy towards recovery.

During the depth of our great recession in 2011 there was a similar fear here and only the decision by the Fianna Fáil-led government to guarantee deposits and bail out financial institutions facing imminent collapse due to insolvency prevented a run on the banks.

Much has been said and written about that decision — most of it highly critical.

However, the general consensus by economists now is that the bailout was a success insofar as it stabilised our banking system and helped reduce it to a size more proportionate to our population and economy.

The €64bn cost to the Irish taxpayer was, of course, astronomical and hugely unfair. Even the International Monetary Fund now accepts that the failure to impose losses on unsecured creditors was a mistake and that the bill for the bailout should have been borne by the wider eurozone.

Nevertheless, the decision helped to prevent “nameless, unreasoning, unjustified terror” from taking hold by replacing fear with hope and, six years on, Ireland’s economic prospects are much brighter.

We are moving ever closer to full employment and the European Commission has forecast that Ireland will be one of the fastest growing EU economies in 2017 and 2018.

Budget day in Ireland is usually full of anticipation and high drama as the minister for finance unveils the annual package of measures agreed at Cabinet.

Paschal Donohoe has far more leeway than the late Brian Lenihan had in 2011, but perhaps less than his immediate predecessor Michael Noonan had over the past three years.

There appears to be a certain amount of room for expansion in spending but only on a modest scale if the Government is to pave the way for a balanced budget in the next year or so.

Mr Donohoe will have to achieve a neat balancing act as the only thing certain about our economic future is its uncertainty.

Indeed, in a pre-budget perspective offered by tax and financial consultants Deloitte, they speak about their “confidence in uncertainty”.

But uncertainty can also lead to opportunity and Mr Donohoe now has the chance to forge the path ahead.

Whatever Budget 2018 offers it must bring hope for the future for workers, unemployed, indigenous businesses and those struggling to find a home. Otherwise, we stand the risk of a return to the days of darkness and despair.


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