Sir, – Britain is about to discover, as we did, that there is less choice when lenders call time or are prepared to lend only on terms which are not palatable.
Jeremy Hunt has told his countrymen to brace themselves for “decisions of eye-watering difficulty”.
It would be good if we planned for the next fiscal downturn – it will come – rather than following our usual course of waiting for the disaster and then responding on the hoof.
Total Government expenditure for 2021 was of the order of €90 billion.
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The conventional wisdom is that any additional expenditures must result in a gross addition to the existing expenditure stock and be financed from taxes or from borrowing.
Why? A saving of a mere 5 per cent would provide €4.5 billion each year for other more worthy spending programmes, meaningful tax reductions, a reduction in government debt or some combination of the three. It is hardly inconceivable that a root-and-branch review of our public spending could throw up a saving of 5 per cent or more.
In Merrion Street, we have two senior Ministers, one of whom is, we are told, responsible for public sector reform. Public sector reform is the dog that doesn’t bark in Ireland or if it does it is with an almost inaudible clearing of the throat.
May I make a modest proposal? The Minister for Public Expenditure and Reform should be required in September or October to present an annual budget for specific and measurable reforms to be implemented in the following year and should be given regular opportunities to report on performance versus budget.
I make this suggestion not only to allow the Minister to justify the second half of his ministerial title.
It would also contribute to dispelling the widely held belief that necessary additional public expenditures can be financed only by additional taxation or further borrowing.
A forensic look at how and where the State is spending our money is long overdue. – Yours, etc,
PAT O’BRIEN,
Rathmines,
Dublin 6.