The election campaign is but a distant memory as the Government imposes spending cuts and hikes in charges, reports Mark Brennock, Political Correspondent
Many voters could be forgiven for thinking they are living in a different country since the general election. Economists and commentators warned of a looming financial headache, but nobody sought election on the basis that existing spending commitments would be cut before the ink was dry on the Programme for Government.
Now the Government has imposed increased charges on university students, hospital patients and those depending on prescription drugs. Health jobs have been cut, as has overseas development aid.
And with public spending heading for a 21 per cent year-on-year increase by the end of 2002, there is more pain on the way if the Government is to meet the 14.5 per cent increase forecast in the last budget.
Minister of State, Mr Willie O'Dea, stated forcefully yesterday that the target would be met "whatever it takes". In relation to new cuts and charges it is a case of "a lot done, more to do".
Within weeks of being formed in June, the Government agreed to seek €300 million in savings across all departments. The move was so rapid that it is difficult to believe the Government did not know what was coming before polling day.
Close to €250 million of these measures - cutbacks or extra charges - have already been announced and are detailed on this page. A further €50 million in savings is to come.
While the Department of Finance hopes this will allow the Government to meet its target, this is far from certain. Further cutbacks in current spending will therefore loom large on the political agenda for the remainder of the year.
Already the Government's capacity to find the revenue to fund the ambitious €10 billion health strategy and the long-promised infrastructural transformation is in doubt.
The Opposition may have spoken prematurely when, during the election campaign, they accused the Government of squandering the boom. But if the Coalition fails in this term of office to deliver the roads, railways and health system that have been promised for the past five years, the political charge will be justified. The Department of Finance's Economic Review and Outlook, published on Thursday, set out the choice as "between present and future consumption". It said investment in infrastructure should take precedence over spending on current services.
The grim reapers from the Department of Finance are therefore likely to ask for more savings. The committee of three outside wise men set up to examine next year's estimates, scissors in hand, will receive each department's proposed estimate for 2003 by the end of this month.
They will need to overcome the spending culture in place since Fianna Fáil and the Progressive Democrats came to power in 1997. Growing overruns in spending have been a consistent feature of Mr McCreevy's budgets, rising from €250 million in 1998 to over €470 million in 2000 and €1 billion in 2001. Tax revenue was overestimated by €2.5 billion in 2001.
Yet there was little discussion of this in the election campaign from Fianna Fáil while the traditional party of the hairshirt, Fine Gael, proposed even more ambitious spending commitments than did Fianna Fáil. Labour earmarked specific sources of money - long-term pension fund contributions and an employers' PRSI increase - for specific purposes such as health and childcare investment. While these proposals were derided by the Government parties as dangerous and unnecessary, they were, with hindsight, modest and would not have come near dealing with the current difficulties in the public finances.
The first major announcement came on June 28th, when the allocation for overseas development aid was cut by €32 million. Exchequer returns in early July showed tax revenues falling short, the revision of the projected cost of benchmarking pay awards from €150 million to €250 million, and the news - known by the Government since March - that at least some of the €650 million taken from the Central Bank in a once-off windfall from the euro changeover could not be used to make the Government's balance sheet look better.
Achieving the promised small surplus was now predicated on substantial cutbacks in projected spending.
The Minister for Finance and other ministers refined their answers to questions as to whether taxes would rise.
Instead of the "no" repeated throughout the campaign, the new formula was that they were "ruling nothing in and ruling nothing out".
Each Government department was given a specific financial target to reach, to be made up either through cuts or increased revenue. The announcements came steadily. On July 5th the Department of Defence said it was cancelling the planned purchase of up to five search-and-rescue helicopters.
On July 12th the Minister for Health increased the charge for visiting a hospital outpatient department without a letter from a GP by 26 per cent to €40 from August 1st. He also increased the maximum a non-medical card holder must pay each month for prescription drugs from €53.33 per month to €65 from the same date.
Later in July the Department announced it was putting on hold some 800 new jobs and increasing charges for private patients in public hospitals. A final saving - cutting the amount given to parents of disabled children by allowing them claim the Domiciliary Care Allowance only from the date of application rather than the date of diagnosis - was abandoned after a storm of protest.
The Department of Enterprise, Trade and Employment is to save €25 million from reduced IDA spending and a decreased allocation to FÁS, which it hopes will be made up from other sources.
The Department of Education has increased registration charges for third-level students by 70 per cent to €670.
Other cuts and charges are yet to come. The Minister for Social, Community and Family Affairs, Ms Mary Coughlan, has said her Department will be making cutbacks shortly.
The Department of the Environment has told all local authorities to seek prior cost approval for future housing developments. Paring back current spending to leave room for major capital projects will be the first major challenge facing ministers when the Cabinet has its first post-summer meeting next Thursday.
How to begin seeking a new public service pay deal amid such public service cuts will be the second.