The news from the Budget front is that the Minister has, thus far, succeeded in holding current public spending increases to his 4 per cent target. But this limit is not quite as severe as it sounds. For Mr McCreevy has been careful to define current public spending liberally. Not for him the former tight definition of "supply service spending": his definition includes national debt interest - which still constitutes one-sixth of all non-capital spending.
But the size of the national debt will presumably be reduced by this year's and next year's surpluses, while the general downward trend in interest rates should also enable the National Treasury Management Agency to replace some borrowing by new debt at a lower rate. Consequently we can expect national debt interest to fall rather than rise in 1999.
And so will the numbers of unemployed, payments to whom cost around £1 billion a year.
Taken together, these two items add up to 23 per cent of all current spending. And, depending on just how much is saved on them, an increase of 4 per cent in overall current spending implies a rise of between 6 per cent and 8 per cent in the remainder of public spending. This is an increase of around the same level as the 7 per cent annual increase in current spending other than debt interest and unemployment payments that we have been experiencing during the past five or six years.
Thus it would be quite wrong to see the spending side of this year's Budget as being directed towards any kind of belt-tightening. And, as the Government is also planning substantial cuts in income tax - seen as necessary to set the scene for the negotiation of the next national pay agreement - this Budget currently looks like being just as expansionist as its recent predecessors.
Mr McCreevy may like to pose as some kind of Scrooge figure, but that's really only a joke: at the moment he is looking a good deal more like Santa Claus.
Before attempting to place such a Budget in context, we need to look at the rate at which our economy is currently growing. This is a matter upon which experts differ.
However, there seems to be a widespread feeling that the European Commission's recent 11.4 per cent growth figure for our economy in the current year is "off the wall". But part of the problem here is that for technical reasons until next year Commission figures are still being calculated on an out-of-date statistical basis that exaggerates the Irish GDP growth rate by almost 1 per cent a year. Its 11.4 per cent figure thus implies a rise of 10.5 per cent in our GDP, as we and other countries currently measure economic growth.
But, because GDP figures include the ever-growing scale of multinational profits that are credited to Irish operations, the use of this criterion by the European Commission in any event gives a false impression of our growth. For if these profits (most of which are dispatched elsewhere), are excluded - as they should be for this purpose - the resultant figure (GNP) normally turns out to be about one percentage point lower. Thus the Commission's 11.4 per cent Irish growth figure for 1998 actually implies a 9.5 per cent increase in GNP - the terms in which Irish growth is best measured. Few believe our growth this year has been as high as 9.5 per cent, but it is likely to turn out to have been nearer to this figure than the 7 per cent growth forecast by the Government at last December's Budget.
Thus the question is whether a Budget that continues to boost current Government spending other than national debt interest and unemployment payments by some 7 per cent, while at the same time reducing income tax significantly, would give the right kind of signal for an economy that is almost certainly growing at a rate in excess of 8 per cent a year - and is currently facing a virtual halving of basic interest rates.
I would judge that there are very few economists outside Ireland who would answer "yes", and there are certainly none in either the European Central Bank or the European Commission.
It is, of course, possible to argue that in an economy as open as ours - this year the value of our exports of goods and services will actually exceed our GNP - the impact of a Budget is heavily diluted. But even those who make this case must have some qualms about the prospect of yet another expansionist Budget at a moment like the present - especially in view of the current combination of a house property price spiral and a tightening labour market, which together are already starting to create inflationary pressures.
Moreover, there is now a new external dimension to our budgetary policy. Within a few weeks we will be part of an Economic and Monetary Union, within which each region has a potential influence on every other one. And if in this new situation we in the Irish region ignore reasonable views of our partners, and then get into trouble, it would be an understatement to say that in a resultant crisis we would get little sympathy from them.
A Government whose members had adjusted to the realities and rigours of life in an Economic and Monetary Union would be extremely alert and sensitive to the implications of this revolutionary change in our situation. Wise ministers would be primarily concerned to secure reassurance from the Minister for Finance that his Budget was not going to risk getting us into serious trouble. What kind of trouble? Trouble in the first instance with European partners, who are already both envious of and irritated with us for a range of reasons that I set out here a week ago. But also possible trouble with the electorate: an electorate that is currently blindly demanding all kind of goodies from Santa McCreevy (was it such a good idea after all to have brought the Budget back to the pre-Christmas period?), but which will be quite unforgiving if as a result of getting what it has been asking for, we end up in a mess.
Wise ministers would have debated these crucial issues at length, and for self-protection would have been seeking to have offsetting taxation measures included in the Budget.
What kind of "offsetting measures" might the Government sensibly have been considering? With corporate as well as personal taxes due to be reduced; with VAT levels constrained by the need to prevent distortions of cross-Border trade; and given the limited capacity of the "old reliables", alcohol and tobacco, to yield major additional revenue - what else could and should the ministers be thinking about?
There is one type of tax in particular that in its own right needs to be raised substantially for reasons unconnected with revenue generation or inflation control - and from which considerable additional revenue could incidentally be derived, viz. a tax on energy.
At the Kyoto Conference last June agreement was reached on global targets for greenhouse gas emissions. For the EU as a whole a reduction of 8 per cent by 2010, by comparison with 1990, was agreed, although within the Community different countries were set individual targets.
The four less well-off and more rapidly-growing economies (on 1997 GDP data we just scraped into this category), have been allowed to increase emissions, in our case by 13 per cent.
On the basis of the economic growth rates projected by the ESRI for the period 1996-2010, our emissions would, in the absence of measures to restrain their expansion, rise by 28 per cent. And that is a figure which, because our growth has been running ahead of these projections, may well be exceeded. The reality is thus that we have committed ourselves to taking steps to reduce our emissions by one-eighth or more vis-avis what they would otherwise be in 2010.
The only practical way to achieve that is by making energy more costly, thus forcing all interests involved to take drastic measures to reduce emissions. That means raising energy taxes. The urgent need for such a move has, according to the media, already been pressed on Mr McCreevy by his colleague in the Department of the Environment, Mr Dempsey.
Such a tax move, introduced now, would have several important by-products. First, it would help to damp excessive economic growth and give us a better prospect of a "soft landing" from our present dangerously heady boom. And second, it would protect us from the negative reactions by our partners and the European Central Bank that would inevitably follow from failure to take any action in this Budget to damp down demand.