Charlie McCreevy was booed by some of the Late, Late Show audience last Friday. In future, he may count himself lucky to get such a welcome, writes Mark Hennessy, Political Reporter
Urging cutbacks and sackcloth, the secret Department of Finance memorandum prepared for June's Cabinet meeting is already out of date. In reality, the situation is probably even worse.
Tax and spending figures due in a couple of weeks will show that the state of the Exchequer's coffers has deteriorated since the Minister for Finance, Mr McCreevy, sat down to pen the document.
In his defence, it must be pointed out that the document was the first sally in the Department of Finance's annual campaign with other departments as they come to budget time.
Traditionally, the minister for finance of the day will seek to wield the knife all over the government service before being forced to restrain somewhat his ambitions as the days edge closer to the budget.
However, the scale of the changes being envisaged now will scare the wits out of some in Government: income taxes could rise in real terms, excise duties to rocket, a freeze of civil service recruitment, or spending one cent on the Health Strategy.
Ministers, said the memo, will have to accept cutbacks of €900 million in existing services if Mr McCreevy is to have a €1.9 billion "envelope" to meet extra health, social welfare, infrastructure and public pay awards.
"Any excess cost over €1.9 billion would have to be funded through significant increases in taxation and public-sector charges which, apart from their political difficulty, would have unavoidable adverse effects on inflation wage developments," the memo added.
However, a succession of former Cabinet ministers, spoken to yesterday by The Irish Times, could not remember a demand for cuts on existing levels of service on the scale dreamt by Mr McCreevy.
Left little short of stunned by the publication of the memorandum, Government figures are now only too well aware that the charge that the election was won by deceit is now, for many, verging on the proven.
In a report on the Exchequer's finances in May, the Cabinet was told that tax revenue was 1 per cent below expectations up to end of May - even though an 8.5 per cent rise had been predicted at the time of the Budget.
"The revenue position should improve over the rest of the year. Significant factors are the 1 per cent increase in VAT and the Corporation Tax timing changes that only help revenue receipts from May and June onwards, respectively," the report read.
Privately, senior Government figures admit that this Micawber-like hope has not been realised. "The figures for August are poor, I can tell you that. But they won't be published for another 10 days or so."
The similarities with Mr Micawber do not stop there. Everything the Government plans is based upon growth levels of slightly more than 5 per cent over the next couple of years.
"There is no certainty that this will happen and if it fails to materialise, significant adjustments to expected growth rates in 2002 and 2003 would be required, with a consequent impact on tax receipts," said the memo.
And Mr McCreevy has less opportunity to indulge in once-off accounting "wheezes": money from the Social Insurance Fund, the sale of the Agricultural Credit Corporation and other sources is long since gone.
However, the Government has some grounds for arguing that it did not deliberately mislead the public about spending before the election since, to judge from the document, it was offering itself the same message.
In its own monthly report for May, the Department of Finance insisted that Department spending was "slightly below" projections - even if it was 27 per cent up on 2001, rather than 14 per cent.
"While current spending to end-May is just below the spending profiles submitted by Departments at the start of the year, it is now clear that early action is required in a limited number of Departments to avoid any slippage on expenditure over the remainder of 2002."
In reality, however, Fianna Fáil and the Progressive Democrats were perfectly aware that tougher times were coming before election day. So too was the Opposition. So too was the media.
Since September 11th and before, it was clear that the Celtic Tiger's purr was diminishing. For people to argue now that all of this is coming as news lacks credibility.
Facing questions in Killarney last week, the Minister for Finance admitted as much: "Look, it was my job to win the election for Fianna Fáil - not to do it for Fine Gael, Labour or anybody else."
In usual circumstances, the Government should not have to worry that voters were fuming. The election was held in May.
Privately, the Cabinet's plan had been to take the hard decisions necessary in the first two years of power so that the situation would have come right by the time it next had to go to the polls.
However, the situation is complicated badly by the timing of the Nice Treaty. Despite the basic illogicality of the argument, some voters may heed the call to use next month's Nice Treaty referendum to punish the Government.
If a sufficient number do, the Yes campaign will be in deep, deep trouble. And if Nice falls, the Government will tether on the brink. Its longer-term survival or, more accurately, its ability to do anything useful will be under question.
Given all the gloom, it must be recognised that State spending should still rise next year by 8 per cent. Just imagine the squeals that would emerge if the Government was really talking about cuts.