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NO GOVERNMENT in the State’s history has faced a greater or more daunting challenge than that presented by the December budget. And no government, in preparing for the many difficult decisions ahead, has received more advice on what to cut, and where, who to tax, and how heavily. The Organisation for Economic Co-operation and Development (OECD) is the latest to diagnose the sick state of the Irish economy and to prescribe some unpalatable but essential medicine to assist recovery.

The OECD’s advice to the Government follows the thrust of the report of the Commission on Taxation, which recommended major tax reforms, and that of the McCarthy report, which set out a €5.3 billion a la carte menu of potential spending cuts. Between all three, there is little disagreement on what needs to be done.