The public prefers low taxes to higher public spending. So said the results of the recent Irish Times/TNS mrbi survey.
Asked how the State's financial position should be corrected, 48 per cent opted for cutting spending, 29 per cent for borrowing more and just 9 per cent for higher taxes.
Game, set and match to Boston over Berlin, it would appear. The public has got used to low taxes. And, after all, we don't want to lose control of our public finances like those profligate French and Germans, who cannot keep within the terms of the EU Stability and Growth Pact. Or is that taking too simplistic a view of the survey results?
The poll findings have reignited the debate about the appropriate mix between spending and revenue. The free market wing of the Government has pointed out that the people support their view of the world.
Meanwhile, the social justice campaigners argue that we can never have decent public services at current tax levels.
Campaigners on both sides are bypassing the issue which is now moving inexorably to the centre of the debate - value for money in public spending.
Given previous polls showing huge concern about areas such as health and education, the latest results beg some questions.
Do people not understand the link between spending and taxation? Given the huge debate about economic issues this does not seem plausible, even allowing for the boom years combination of falling taxes and increasing spending. Are they happy with current service levels? Unlikely.
It seems more plausible that people simply do not believe paying higher taxes will actually deliver a better level of service. Or, perhaps, they believe the current tax level should be high enough to deliver much better services. Ask people whether they would pay higher taxes if it were spent in areas such as health and education and they will probably say No, on the basis that services in these areas in recent years have not increased commensurately with the additional money spent.
The tale of the costing and delivery of the Luas project and the piecemeal improvements on our roads and railways have left the impression that Government capital spending is like putting money into the proverbial black hole.
But ask people would they pay a little more tax for a guaranteed delivery of either improved public services or infrastructure projects and the answer might be different. So the key issue to be addressed - before we delve into our souls to choose what level of tax and public services is appropriate - is how we get more bang for our spending buck.
A similar argument applies to borrowing for investment purposes. Ireland should borrow more to invest, the argument goes, as we have a low debt level and huge infrastructure needs. In theory, this is fine. Effective investment yields an economic and/or social return which should justify the cost and mean the additional borrowing is not a future burden. But until we can be sure that we can build a Metro in Dublin as cheaply and efficiently as was done in Madrid, there is a strong argument to go easy on the borrowing.
This kind of analysis is also missing from the debate on the future of the Stability and Growth Pact. Loosen it to allow our economies recover from recession, France and Germany argue. But it is far from clear that there is any longer-term budgetary strategy in play in either of these countries, or any thought of the economic cost from a structural increase in borrowing. To make matters worse, it appears the pact issue is becoming increasingly politicised and that countries are taking positions based on wider political interests.
Ireland escapes this criticism, as we appear to be waiting to see what way the wind blows and whether the direction might suit us. The Government may hope for some recognition that low debt countries like Ireland could borrow a bit more to accelerate infrastructure investment, which of course brings us back to our own value-for-money debate.
The Budget will bring two areas into focus. First is the productivity gains to be given in return for the benchmarking awards. Poor Enda Kenny is taking a bashing for calling for the payments to be postponed. Meanwhile, IBEC, which has made similar noises, is open to the criticism that it signed up for the deal in Sustaining Progress, the national agreement.
But as Minister Mary Hanafin put it during the week, the public sector could lose taxpayers' support if it does not embrace change and modernisation.
And the problem is that the terms of the benchmarking deal are so woolly that such improvements are far from guaranteed. What was needed was a transparent process explaining the reasoning behind the awards and what would be delivered in return, in terms of demonstrable improvements in public services. This did not happen and as this debate plays out it could fatally undermine social partnership.
The second issue will be the impact on overall service levels of the slowdown in overall current spending growth to somewhere in the 6-8 per cent range. Given the big increase in the pay bill, the problem is particularly in non-pay spending areas. This may well lead to further disimprovements in service levels to the public.
The public finances may improve as the economy picks up, but the days of guaranteed surpluses and spending binges are over. The only way to deliver better public services and the desperately needed infrastructure improvements without crippling the economy with big tax increases is to get better value for money from spending in all areas.
The slow response to the recent expert reports on the health services and to problems in big infrastructure projects unfortunately suggests that we don't yet seem to have the mechanisms to achieve this. The problem has been recognised, but we await the implementation of a treatment plan.
