While there have been vast improvements and some disimprovements in Irish society over the past 50 years, most people would accept that we still have a long road to travel before we have the high quality of social services and infrastructure which we need, desire and deserve, writes Martin Mansergh.
Excellence has been achieved in some areas. There are still far too many others, where we have not even achieved minimum acceptable standards. There is still a huge catch-up required, for example, within our health and disability services and prison conditions, which must receive constant spending priority.
The question, posed in Budget week, is what the fastest way is to make further progress.
Most improvements require resources used well. The economic policy of the last 16 years based on social partnership has been spectacularly successful in generating additional revenue for the State. It has been used for debt reduction and saving, for improving public services and for reducing the weight of taxation both on citizens and companies.
I agree entirely with Fintan O'Toole that the success of the Celtic tiger was not a triumph for neo-liberal economics, but rather for the intelligent degree of common purpose exemplified by a social partnership system of governance that is dismissed across the water as neo-corporatism.
In a small country, we understand from experience that if we do not hang together we hang separately.
The Irish economy has a strength it never had before. The maintenance of near-full employment in a more difficult environment is a remarkable achievement. Some years ago it was the conventional wisdom that full employment could never be achieved, and that the State would have to cater for the permanent long-term unemployed.
We have moved in 16 years from the second-highest level of public debt in the EU to the second-lowest. It is no accident that Luxembourg, which has negligible public debt, has easily the highest per-capita standard of living in the EU.
I am not convinced by the argument that we should borrow more, if we can sustain a high level of public investment without it. I am pleased that this includes an extra €55 million to be spent on improving sub-standard school buildings next year.
The most telling line in the Minister for Finance's speech was his statement that "borrowing is the real stealth tax". Part of the waste that occurred at the height of the boom was caused by trying to do too much too quickly beyond the capacity of the construction industry to deliver. The steady State investment planned over the next five years is a better option. Once more projects are completed, we will be better satisfied.
Tax reductions and indexation, except at the lower-income end, were not the priority this year. We can catch up on indexation later, when we are surer of recovery.
As a former member of the Tax Strategy Group poring over tables showing the effects of different proposed income-tax changes, I believe no one could criticise the exemplary distributive profile shown this time, a targeting made possible by the move to tax credits.
The most telling statistic in the Taoiseach's speech in the Budget debate on Thursday was the reduction in the share of income tax paid by those earning the average industrial wage or less, from 14 per cent in 1997 to 6 per cent in 2003, none of whom today are in the higher tax bracket.
The projection of a 5.2 per cent increase in tax revenue next year seems conservative, and I doubt if general Government borrowing will end up at 1.1 per cent of GNP. For confidence reasons, the Department of Finance and the Revenue Commissioners tend to err on the side of caution.
It is always easy to belittle social welfare increases in any Budget. The fact is that they have moved from barely above inflation in the mid-1990s to substantially above it. Child benefit was for a long time only a modest assistance; €131.60 a month for the first two children, and €165.30 for subsequent children are substantial payments, even if still well below payments in Britain and other European countries.
Increasing child-dependant allowance was abandoned during Proinsias De Rossa's time as minister for social welfare because it created poverty traps. The effects of revoking existing schemes need to be very carefully considered before finalisation.
Community Employment Schemes are of real social value, both to those who participate, not least the older semi-skilled, but also because many worthwhile non-commercial community activities depend on them. Their future seemed threatened earlier this autumn by reports of expert groups.
I was one of the backbenchers who signed the motion, not in any spirit of revolt, but to influence Government policy constructively. The Rural Social Scheme announced in the Budget neatly provides an extra 2,500 jobs.
The Irish Times economics staff, and Feargal O'Rourke of Price WaterhouseCooper at a post-Budget breakfast, highlighted the importance for inward investment of the tax relief on holding companies and tax credits for R&D.
Driving the film industry, successful artists or horse-breeding out of the country - the last of which is rapidly becoming the staple diet of ersatz socialism - is not the panacea for anything.
Attempts to influence the market to make housing more affordable for young people have had limited success, although we now have a record supply of nearly 60,000 houses a year.
Decentralisation will transform towns which do not find it easy to attract industry, yet have excellent but underutilised amenities. The campaigns to attract decentralisation were community-led and supported by public representatives of all parties. It was an election promise delivered, when least expected, by someone who likes to be the master of surprise.