Monday 23 October 2017

A legacy of debt and pain

FIRST, the bleak reality. The tax increases and public spending cuts totalling €6bn, announced by Finance Minister Brian Lenihan in his Budget yesterday, will hurt almost every individual and family in the country, often severely. But they are not optional. They are an absolute necessity.

They are necessary because any lower figure would not have made a worthwhile impact on our tottering public finances or restored our international credit. The basic argument is as simple as that.

Secondly, many of Mr Lenihan's measures are the correct measures. They would be correct even if we were in a much happier and more prosperous situation. We should have done certain things without any prompting from the European Union, the European Central Bank or the International Monetary Fund. We should, for example, have reformed the income tax system which the minister calls "no longer fit for purpose". We should have abolished all property-related tax reliefs. In such areas, he has at least made a start.

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