Cabinet is discussing 'Bord Snip' Report

Today the Irish Cabinet is discussing the long awaited report from the Special Group on Public Service Numbers and Expenditure Programmes, which is looking for possible cuts in the public sector, in order to overcome the current financial crisis and state deficit.

The four-men-strong team - popularly called 'An Bord Snip (Nua)', is led by the well-known economist Colm McCarthy (left) of University College Dublin (UCD), who has headed a similar review group in the past (under the then Taoiseach Charles J. Haughey) and contributed greatly to the cost-cutting and streamlining measures made then.

Individual ministers have already an idea how the report, which was originally expected at the begin of the month, will affect their departments. But once the Cabinet has seen and discussed it, the likelihood is much greater that details from the report could be leaked to the media.

So a decision to publish the report in full within days seems to be a foregone conclusion, despite worries about the effect it might have on public opinion in general and on a special Green Party conference to be held this weekend in particular.

Possible recommendations by 'An Bord Snip (Nua)' could include the break-up of the long obsolete Department of Community, Rural & Gaeltacht Affairs - currently headed by Eamon Ó Cuív (right), the last member of the De Valera clan with Cabinet rank - and the redistribution of other ministerial responsibilities.

This would not only make sense, it would be - in my opinion - an already overdue step to reform the structure of our government. We also need a reform of the Civil Service and of the whole political and voting system.

Trying to solve the problems of the 21st century with the tools and methods of the 20th - and even 19th - century will not work and only lead to more problems and further decline. The current government is very unpopular, and for good reasons. But if it has the courage to tackle the problem of political and system reform head-on, it might gain new and strong support, some of it from perhaps unexpected quarters.

The Emerald Islander

"Tough Budget" discussed by the Irish Cabinet

A long and painstaking special pre-budget meeting of the Irish Cabinet has ended this evening - less than two hours ago - at Government Buildings (left) in Dublin.

It is understood that while there will be contacts between ministers in the coming days, there will not be another formal meeting until Tuesday, when ministers are likely to sign off on final decisions for the budget a week later.

Each year minsters hold a weekend meeting to sign off on budget decision, but the scale of the crisis means that this was the second such meeting this year.
The focus was on achieving massive savings in public spending, but ministers also have to consider ways of raising additional income through taxes.

On their way in to the meeting this morning, a number of ministers repeated that in terms of budget cuts nothing was being ruled in or out.

John Gormley (right), the Minister for the Environment, Heritage & Local Government (and leader of the Green Party) said that major cuts across all departments were likely when the budget is announced on October 14th.

Defence Minister Willie O'Dea (left) said it would be the toughest budget we have seen, but tough budgets in the past had succeeded in turning the country around.

Today's special cabinet meeting came on the backdrop of the worst exchequer returns for years. The government has already held a number of such meetings, but the sheer scale of its task became even more evident with this weeks third quarter exchequer figures. They show a government deficit of € 9.4 billion and the need to borrow € 11.5 billion.

There will be more discussions before delivery of what promises to be the worst budget in 20 years, as the government tries to strike a balance between maintaining front line services and jobs and the implementation of drastic savings.

Big Words, long Meetings, no Money

The deepening recession in Ireland and the collapse of the property market after a long and artificially hyped-up boom has led to a further sharp decline in the government's finances.

Days after the State stepped in to protect the country's banks, Exchequer figures show a serious deficit of € 9.4 billion for the first nine months of this year, to the end of September. This compares to a deficit of 'only' € 3.1 billion at the same point last year.
Total tax revenue of 2008 to the end of September was 11.2% behind expectations at € 29 billion.

The government says that the performances of VAT, Capital Gains Tax and Stamp Duty receipts are "disappointing" and reflect developments in the property market as well as weaker economic activity.

• VAT receipts are 6.6% lower than they were at the same time last year at € 10.9 billion.
• Capital Gains Tax receipts are 41.93% lower than they were this time last year at just over € 693 million.
• Stamp Duty receipts are 45.8% lower than figures for last September at € 1.35 billion.

Tax revenue for the whole year is expected to be € 6.5 billion less than expected, and it is estimated that the government will have to borrow about € 11.5 billion to pay its bills.

The Minister for Finance, Brian Lenihan (right), said the slump in the government finances was "a very serious matter". You can bet it is!

Speaking on RTÉ News, Lenihan said that budget discussions were ongoing, but the State was facing what he called "tough decisions".

Separately the Taoiseach said that this was "a defining moment in our nation's history".

"We are in extraordinary economic circumstances, and if the right choices are not made, it would have catastrophic consequences for our future prospects," he added gloomily.

Brian Cowen (left) stated that "no one should harbour any illusions that living within our means would be easy in the circumstance in which we now find ourselves", but promised that his government would "not be found wanting in making the necessary hard decisions".

Meanwhile the latest report on the economy from the Irish Central Bank predicts that our economy "will shrink this year and next year". The report cites the continuing housing slump and financial market turbulence.

The bank also warns against "measures designed to prop up the property market", saying there are already "considerable tax supports and incentives by international standards".

Meanwhile, a special pre-budget Cabinet meeting, which had been due to be held on Sunday, is to be brought forward to tomorrow (Saturday) instead. There was also a special Cabinet meeting yesterday evening in the wake of the latest Exchequer figures.

The question is if all those hastily scheduled and nervous meetings will eventually produce some results that make a difference to the country and to the Irish people. So far all we hear are big words, we are told of long meetings, and that there is no money...

The Emerald Islander