The buoyancy of the Irish economy has been confirmed in the past week by the quarterly report from the Economic and Social Research Institute and the publication of the Exchequer returns. The news on almost all fronts could hardly be better the economic boom will help toe provide up to 45,000 new jobs this year; the latest unemployment figures published yesterday indicate a decline in the number of jobless; interest rates are poised to fall yet again, and - after a surge in tax and VAT receipts - the Government has at least £300 million available to fund tax cuts, increase spending on worthwhile projects or cut Government borrowing.
The latest indicators confirm that the long, shadow cast by the currency crisis three years ago has been thrown off at last. Consumers are markedly less cautious in their spending patterns: the boom in the property market has already been well chronicled, but there has also been a remarkable surge in demand for new cars and white electrical products. There is a feel good factor on the streets and a confidence about Ireland's future economic prospects which is possibly unprecedented in our history.
And all the signs suggest that this confidence is well grounded. There is little to indicate that the economy is overheating or that Ireland will follow the boom and bust cycle, from which the British economy is just recovering. Property prices have risen dramatically but the proportion of disposable income spent on housing the so called affordability index is still low by international standards.
Fears that the surge in spending would help to fuel inflation have so far proved groundless; Ireland's inflation rate continues to compare favourably with our European partners. Indeed, the Republic is now very well placed to be among the founding members of the European Monetary Union from 1999 in itself a remarkable achievement.
In framing its Budgetary strategy, the Government is clearly constrained by the Maastricht convergence criteria; there is a pressing need, above all, to ensure that inflation is kept in check. That said, the Government enjoys sufficient room for manoeuvre to allow it set to work on achieving some long term objectives.
The first priority must be substantial tax reform; a situation in which taxes totalling over 55 per cent kick in on a salary of some £13,000 per year is intolerable. Substantial tax reform is also the key building block for a renewal of the PCW an essential component for continued economic growth.
Another priority is to channel any additional funding towards specific spending areas which have been neglected. Investment in primary education, which remains disgracefully underfunded by EU standards, should be high on the Government's agenda. And there is also a pressing need to give Irish children (indeed all Irish citizens) the kind of recreational and sporting facilities that other EU citizens take for granted not least, to help prevent the downward spiral towards drugs and crime.