Government must hold nerve
The Government has pledged a €3bn fiscal consolidation for next year, but, somewhat perversely, has reduced the number of options on how it can do so. A property tax is one of those options and, although it is sure to be unpopular, it has more appeal, from a government point of view, than some of the alternatives.
Today's encouraging Ernst & Young forecast, that our economy will be one of the fastest growing in the eurozone next year, assumes that the Government will stick to its programme for recovery, no matter how politically unpopular the essential measures may be.
The Government is obliged to make that €3bn saving and the Finance Minister Brian Lenihan has stated that his intention is to achieve it in his next Budget, through a combination of spending cuts and taxes, but that €1bn will come from capital expenditure.