FINANCE Minister Brian Lenihan yesterday starkly warned that we are "living beyond our means".
He echoed the phrase used by Charles Haughey in his infamous 1980 tighten-your-belts TV broadcast, and said the Irish people would have to get used to a lower standard of living over the next few years in order to regain economic competitiveness.
Speaking after the publication of calamitous Exchequer figures to the end of November, Mr Lenihan said on radio that the Government had to respond to a fall of €1.5bn in tax revenues this year.
But he ruled out a mini-Budget in the Spring of next year, saying the imposition of further taxation -- above that outlined in Budget 2009 -- would not aid the economy.
"At this stage we have already made our tax plans. There is a limit to how much taxation any economy can take when it is in the type of crisis our economy is in," he said.
Income tax was a tax on work, and the Government wanted to preserve jobs.
"There isn't great scope for tax increases next year, beyond what has been done already in the Budget," he said, pointing to the income levies. "I don't believe this economy can stand the strain of further taxation."
On spending cuts, Mr Lenihan said the Government had contained the growth in State spending this year and would have to continue to contain it. At the end of 2008, the Government would be in a position to know what further cost-containment would be required, he said.
But he defended the bringing forward of the Budget to October -- rather than yesterday, which would have been Budget Day in an ordinary year. While the Government did not have the full figures in October, he said the move was necessary to bring home the seriousness of the situation.
"We saw in the reaction to the Budget a great deal of non-acceptance of the seriousness of the situation. We are in a very serious situation," he said.
"I don't think people would thank us for telling them three weeks before Christmas how serious the position is."
Mr Lenihan said he wasn't in a position to engage in any economic stimulus package, as demanded by the Labour party. "We're going to be borrowing very substantial money next year as it is. That in itself is a stimulus. There isn't any room beyond that."
He went on to tell listeners: "To make yourself competitive in the wider world, you do sometimes have to take a reduction in your current standard of living. I am not trying to reduce investment in this economy, but I am saying to people that we are living beyond our means.
"We have to face up to that, because we won't be able to compete with other countries if we don't."
Fine Gael leader Enda Kenny said the minister's words did not disguise the fact that the country been "led into the middle of an economic swamp by the most disastrous Government of the past 40 years".