LAST week in this column I presented the - not very popular - case for a Budget directed rather towards reducing the current deficit than towards major tax reductions citing a series of arguments in favour of such a course of action.
Alert readers will have noted that my arguments did not include any reference to the famous Maastricht criteria, but were based solely on the needs - and particularly the longer term domestic needs of our own economy.
In fact, I am inclined to feel that in the Irish case the Maastricht requirement that the budget deficit be below 3 per cent of GDP is a somewhat unhelpful criterion. This is because, in view especially of the reduction in the flow of EU structural funds that we must expect at the end of this decade, this criterion may actually encourage complacency about our budgetary performance.
For in order to leave room for the replacement from domestic resources of part of the present structural funds flow we need to reduce, indeed to eliminate, our overall Budget deficit over the next four Budgets.
The publicity surrounding the Maastricht criteria - which, after all, have not been handed down from Mount Sinai but only from an EU Inter Governmental Conference - may encourage Irish governments to ignore this urgent need for a tighter than Maastricht budgetary constraint, and may help them to get away with this because of the over preoccupation of most commentators with the Maastricht Commandments.
Within the framework of any given economic constraint the internal concepts of a budget are, of course, extremely important, and their shape depends upon the economic philosophy that informs these measures. At two extremes lie the individualist and societal economic philosophies of what are crudely described as right and left. At the right wing end of the ideological spectrum one finds an exclusive concentration on limiting the scale of state social action and reducing taxes, allegedly in the interests of increasing competitiveness and accelerating economic growth.
In practice, however, some of the more vocal exponents of the right wing philosophy seem to concentrate much of their fire against that part of social action that favours the less well off, e.g. the unemployed, rather than on the kind of social action that favours better off people through such measures as mortgage tax relief, untaxed child benefit and free university education.
Moreover, right wing pressure for lower taxation tends to concentrate on reductions in tax rates that will favour better off people. A high proportion of these are employed, in more interesting activities where, because of the non monetary incentive provided by the nature of the work, effort is less likely to be affected by the proportion of income retained after tax.
Much less concern is expressed about the present gross over taxation of lower paid people who are mainly engaged in routine work. This is often boring and thus offers no compensating non monetary incentive to performance.
WHEN I ask rhetorically because I don't expect an answer did our right wing financial commentators last express concern at the economically as well as socially perverse situation in which the marginal PRSI/tax rate for a single worker earning well below the average industrial wage is a disincentivising 55.75 per cent; whereas for a non PAYE millionaire - and I believe most millionaires are non PAYE the marginal tax rate is 50.25 per cent?
On the left, of course, there are people whose concern for social equity leads them to propound tax and spending policies that would offer serious disincentives to effort or enterprise on the part of various economic groups. But in the present post Thatcherite climate such views carry little weight and represent no serious threat to our economic success.
What has developed here in recent times, however, has been a growing public sentiment, which happily seems now to be finding expression at political level, in favour of concentrating the bulk of such budgetary action as may be feasible not upon further tax reductions for the better off but upon areas of combined economic and social concern such as the problem of long term unemployment.
The commitment of all three parties in the present Government to such an approach was highlighted by the Taoiseach on Monday last when he said that the high rate of unemployment would inform Government tax policy and that, while reductions in personal taxation were a priority, the Government in the Budget is looking to enhance total family welfare, not solely the after tax income of the principal earner.
And, he added, action to reduce long term unemployment would help all families because only by providing sufficient legitimate alternative outlets for the ambitions of young unemployed people will we ensure that they do not see crime as a means of escape.
This is a refreshing approach to our complex and deeply divided social situation - happily miles away from the kind of thinking which has dominated both tax and law and order policies in Britain in recent times.
The resources available in 1996 for such purposes are, of course, limited, and it is not surprising that there should be debate within Government as well as outside it about the best way to deploy these sums.
But the Government is not helping itself by carrying on this Cabinet debate in public, with Ministers from all three parties leaking their own proposals to the media and in some cases arguing publicly with each other about their pet schemes.
THERE has been a good deal of confusion recently between "open government" and leaky government. On the one hand we certainly badly need much greater transparency about policies pursued by government, as well as greater accountability in relation to public administration.
This objective should be largely secured by the freedom of information legislation currently being enacted, especially when this is complemented by the review of the Official Secrets Act.
But leaks from government about measures currently under discussion are quite a different matter. Such leaks have a markedly negative impact upon the collective credibility of the government.
That, however, is a diversion from my main theme. Whatever about the details of proposals on unemployment that have been under discussion in Cabinet and the leaks concerning them, it is encouraging that we appear to be seeing the re emergence within our present Government of a new Christian/social democratic spirit that has been absent for many years past.
Not alone do I feel that this is welcome in its own right - I declare my long standing prejudice on that point - but it is at least possible that this development might help to avert a danger that has recently seemed to face our political system.
This is the danger that, as almost every party has recently served in government with almost every other party, the electorate might start to feel that it had no particular reason - other than the diminishing factor of traditional party loyalty to vote for any party.
The clear cut right wing stance of the Progressive Democrats on economic issues - despite their high spending record when actually in government from 1989 to 1992 - now distinguishes the PDs clearly from the three parties in the present Government.
And as they and Fianna Fail appear to be drawing closer together, we could be seeing the emergence of a moderate right/left dichotomy within our political system so far as economic policy is concerned. This could in turn reawaken a healthy interest in politics and in voting at general elections.
Or am I being too sanguine?