The challenges set by McCarthy

 

SO NOW we know the real extent of the problem and the gravity of the steps required to remedy it. It is overwhelming. The cuts in public sector numbers and social welfare, agencies and services will be parsed and analysed by experts and public sector unions in the coming days and weeks. The report of the Special Group on Public Service Numbers and Expenditure Programmes (colloquially known as “An Bord Snip Nua”) challenges mindsets and preconceptions at a time when there are very few other options.

There is a sense that the public will now exists to do the unpalatable and previously unmentionable to get it all over. Whether the Government parties and the Opposition have the stomach to see it through is questionable.

Some aspects of the recommendations, chaired by economist Colm McCarthy and published yesterday by the Government, are so challenging of the political system that they may never be implemented. But they do serve an important function: they highlight that we are in the middle of a full-blown crisis and the alternative to a structured, Government-led response is that outside agencies would force unacceptable solutions upon us.

The first thing to be said is that this report presents a menu of financial options to the Government without any reference to the social policy of this State. The savings required by Government are significantly smaller than the scale of reductions identified in the report as being feasible. Since last year, some €9 billion has been taken out of the economy, largely through tax increases. A further €3 to €4 billion will have to be found next year and the expectation is that the bulk of this money will come through savings and public service reforms.

“An Bord Snip Nua” presents a range of choices. They are difficult. They affect every segment of the population. Today is the day to to consider the gravity of the solutions to our economic problems. There will be another day to offer a considered opinion on the hard choices. In taking action, however, the marginalised and the least well-off sections of society should be accorded the greatest protection. The resulting discomfort should be felt in degrees from the top down, rather than from the bottom up.

The need for a structured response to the proposals is important. We cannot continue to borrow €400 million a week in order to plug the gap in public spending. Debate on the difficult decisions that will have to be taken should be conducted in as open and transparent a manner as possible.

The Opposition parties should make their views known on these recommendations, or provide alternative proposals when this document goes to the Oireachtas Finance Committee. The Government, however, must lead those discussions and outline its preferred course of action rather than eventually emerge to present a set of conclusions to the Dáil in its December budget. We are at an early stage of a very challenging and complicated process.