Michael Noonan  gave a fascinating interview to RTE’s economic correspondent Sean Whelan on its website  (available here) yesterday when he set down a few markers for what to expect later on this year.

The Minister for Finance was responding to the latest Exchequer figures which show that the books are more or less in balance. But that’s only because spending is down on profile. Revenues are also marginally down.

While income tax is sound the more worrying subsets are disappointing returns for VAT and for corporation tax. Part of the lower than expected VAT take was attributed to the cold spell in February. But it doesn’t take a genius to guess consumer confidence is still low and people are still saving rather than spending. Noonan’s appeal to us last week to wear the Tshirt saying ‘WE ARE NOT GREECE’ and do the patriotic thing and spend money for Ireland has been falling on deaf ears.

Whelan asked Noonan was it not odd that the take on corporation tax was down given that the only sector experiencing any kind of a bounce in Ireland was exports. Noonan said that maybe companies had invested in 2010 and had written off those investments against profits. The bulk of corporation tax, he also said, tends to come in at the end of the year (which is also true).

What was evident from all this though is this Government’s struggle is going to be a marathon rather than a sprint. And Noonan has realised this.  And it seemed to me – though I may be wrong – that Noonan is conscious of the travails ahead and has started a softening up process for more austerity and hardship.

1. In my view, his reference to a €4bn correction as opposed to the €3.6 billion that’s contained in the EU-IMF memo was more than just a casual rounding up. It shows that that the adjustment may need to be more severe to balance the books and bring us back on track to reach Tír na n-Og, otherwise known as the 3 per cent deficit target by 2015.

2. He also said that the low-lying fruit as he called it  have all been picked. He warned of an austere Budget in December containing cutbacks that would be “very difficult” to achieve.

In terms of political action, low-lying fruit translates as going after the fat cats. I was talking to a senior Minister about a fortnight ago who said that all their focus group research had shown that the electorate was willing to take pain but only if the highest paid in the public sector – politicians, judges, civil servants, and chief executives of semi states – led by example and made a greater sacrifice. And so there has been a weekly diet of the Government doing the populist and popular and easy thing (and 100 per cent correct) of slashing the pay of the best paid, knowin that their protests are going to fall on deaf ears. The judges have complained about their independence being compromised and the damage to their international reputation. NUI Galway lecturer Donncha O’Connell gave the best response to that weak argument today on News at One (listen here).

The difficult part starts here. Has the Government been foolish in saying that there will be no increases in income tax or cuts in welfare? George Bush the First foundered on promises of this kind. His ‘read my lips’ comment promising no new taxes downed him in the 1992 US presidential election.

It’s not that any of the oppositon are ideally placed to take advantage of any mí-ádh that the Government experiences. Fianna Fail is in a strange place at the moment, wounded, not really able to enter the fray. Sinn Fein has not really found its feet either. Gerry Adams has not reallybecome accustomed to the pace of things in the Dail as yet. Pearse Doherty’s Mr Angry routine will eventually wear thin unless he introduced more nuance and subtlety. The party has a number of very smart TDS who will really worry Fianna Fail ( Mary Lou McDonald, Padraig Mac Lochlainn and Peadar Toibin) but none have really left their mark as yet. It’s early days. The independents and technical groups are too fragmented ( that is the nature of the beast) but some of the most impressive of that group (from a substance point of view) may be some of the quietest – Thomas Pringle from Donegal South West; Catherine Murphy from Kildare North; and Stephen Donnelly from Wicklow.

And so who’s going to inflict damage on the Coalition? Well, erm, themselves. If you had put up a not particularly bright donkey in the General Election, he would still have wiped the floor with the hapless Fianna Failers and the even more hapless Greens.

Problem was that the main opposition parties started gettting nervous about each other and started to make promises that they couldn’t keep when they entered Government. On interest rates for the European bailout loans; on burning bondholders; on hospitals; on third level education fees; on water charges; on property taxes; on turfcutters… the list goes on.

And the second potential conflagration will arise from internal oppositon from backbenchers to Ministers taking decisions that go against the party’s philosophy or core values. We have already seen the beginning of a Coalition rift on Joint Labour Committees and sectoral wage agreements. There will be many more.

Another element that needs to be factored in is the danger inherent with overly large majorities. Backbenchers on the Government benches have very little to do when it comes to promulgating national policy. And the more ambitious will become quickly bored at being spear-carriers, called onto stage only to vote for Government policies. It will not take too long – espeically if things get really difficult – for the first mutinous sounds to be heard from the lobby fodder on the Labour and Fine Gael benches.

Any one there for the last Mattie McGrath?

People are already talking about this being a two-term Government on the basis that Fianna Fail got one hell of a pasting.

That should not necessarily be taken for granted. Of course, it sounds the most realistic option right now given the circumstances. But a lot will depend on the performance of the economy. If the economy continues to tank and the recession and high unemployment linger, then people will begin to talk of broken promises and disappointment and failures etc.

Though they show no signs of doing it at the moment (and Micheal Martin may not be the Moses to bring them to the promised land), Fianna Fail may be able to bounce back stronger (in the locals in three years time) and in the General Election than people currently anticipate.

But it’s early days yet… .far too early to see anything other than straws in the wind.