The Minister for Defence has embarked on a tour of military barracks to try to persuade soldiers to moderate their hearing compensation claims.
Mr Smith is promoting the idea of a compensation board which could quickly process compensation claims, if the soldiers agree to accept less than the average sums of up to £30,000 being paid out by the courts.
The hope is that the soldiers will accept much lower amounts if the money is paid out quickly through a compensation board. If they pursue cases in large numbers through the courts - at the current rate of 80 new claims a week - then the Minister has warned that the Defence Forces will be hit by "severe" spending cuts.
The attraction to soldiers of Mr Smyth's offer is that he is promising that all cases could be settled within two years.
Some 12,000 compensation claims have been lodged in the courts, and it is expected it will take 17 years to clear these cases at the current rate.
The Minister hopes that the realisation that all new claimants will not have their cases heard until 2015 will encourage soldiers and ex-soldiers to opt for his compensation board proposal.
It is hoped that soldiers with no or very little hearing damage will accept payments of £5,000 or even less.
This would represent massive savings to the State as well as removing the huge legal costs the hearing claims are accruing.
Speaking in Dundalk yesterday after talking to soldiers at Finner, Rockill, Lifford, Cavan, Monaghan and Castleblayney camps, Mr Smith pointed out that the State has a £100 million budget overrun so far this year and is beginning to feel inflationary tendencies. Under the Maastricht arrangements cuts had to be made, he pointed out.
"I indicated fairly frankly that we have to be more efficient and extremely cautious about making savings. There is a £100 million overrun in the first five months. It will be necessary for the Government to impose cuts shortly if we have to get inflation under control.
"We are bracing ourselves for fairly tough times. We will not be able to maintain the current level of expenditure on the Defence Forces given the level of deafness awards. We would not be prepared to ask for cuts in other areas like education, health or the environment because of this.
"These difficulties would be greatly eased if the level of compensation, particularly for minor hearing damage, could be brought down to an affordable level."
He emphasised that his proposal would not affect those soldiers who had suffered serious hearing damage.
"I have made this appeal to personnel, both serving and retired, in the hope that they are prepared in the interest and future of the Defence Forces to accept lower levels of awards.
"I have received positive responses to these suggestions in certain parts of the country and if that were to be maintained I would establish a compensation board."
He said the board could act quickly to settle cases if there was agreement on the quantum amounts.