The nation was presented with a potential new haircut last week.

It was one of those really close buzz cuts that young US Marines endure that reduces the lower two thirds of their heads to the smoothness of a baby’s bum and the top third to the equivalent of beard shadow.

The question now is whether the government barber has the stomach to wield their scissors in quite the same way An Bord Snip thinks they should.

Even if half the suggested cuts were delivered – and frankly that’s a big ‘if’ given the parish pump and union influence – one way or another we’re all going to feel a chill wind at our necks this winter.

Yet it is the public service than controls the nation’s access to hospital beds, classrooms light switches, the safety of our communities, the roads we travel, the running of towns and villages, the delivery of unemployment and other social welfare benefits, etc.

And if they don’t like what’s in this report – especially the bit about the abolishment of 17,300 jobs – implementation will be a fraught process.

That said, Ireland Inc is going broke. We have just 1.95 million (and falling) earners, collapsing tax revenue, rising unemployment, rising public service costs and higher debt servicing on the additional €400 million that must be borrowed each week in the international debt markets.

We sit between a rock and a hard place.

Much time has already been lost in sorting out our terrible financial problems. Spending cuts suggested in the report, headed by economist Colm McCarthy, should have really begun last October.

What we all need to be contemplating is how we and our families will be able to cope if some or all of the biggest value recommendations (apart from the job cuts) in social welfare, health and education are implemented.

For example, the McCarthy report recommends a general reduction of social welfare rates of five per cent goes further with a new standard monthly payment of €136 for every child.

This would be a reduction of €30 a month for the first and second child who currently receive €166, and a €67 reduction a month for the third and subsequent children who currently receive €203 a month.

A family with three children would see its monthly payment fall from €535 to €408 or from €6,420 to €4,896 annually. This new rate is a few euro less than parents received for their first two children in 2004.

In the case of pensioners, a five per cent cut in their weekly state pension would reduce the amount a pensioner under 80 receives from €230.30 a week to €218.79, €4.51 a week less than their 2008 weekly payment.

The taxing of the Household Benefits Package would cost pensioners earning over the income tax threshold of €20,000 for an individual or €40,000 for a couple and on the standard tax rate of 20 per cent, about €312 a year if implemented at today’s payment rates.

So if you are a pensioner, how would you cope if your income was cut by €1,560?

Or as a parent of three young children, with a €1,524 cut? If you are currently getting €339.90 Jobseeker’s Benefit (if you have a dependent spouse) could you manage if it was cut by five per cent, or €17 a week?

But of course it isn’t just social welfare recipients who will have to dig deeper once the government eventually gets the scissors out.

If the McCarthy report is implemented, anyone making a claim on the drug payment scheme will have to pay the first €125 instead of €100 and medical card users will have to stump up €5 for every prescription they get filled. A & E users will pay €125 instead of €100 if they don’t arrive with a GP’s letter.

Meanwhile, the country’s two million private health insurance members will see their premiums soar: the report recommends that the Government raise the access cost of private facilities in public hospitals by another 20 per cent.

That recommendation alone, if fully passed onto customers, would increase the most popular private health care plans for a family of four by up to €500 a year.

This report is the biggest shot across the state’s bows regarding our perilous public finances.

The unions and other vested interests may yet oppose them all and demand (with menaces) that higher earners and businesses be taxed more to make up a substantial part of the minimum €20 billion shortfall. No failing economy has ever been super-taxed back to health.

Or the nation can swallow the bitter pill of cutbacks and lower public benefits, services and entitlements – and hope that even that will be enough to stop national bankruptcy.

Time is running out. By October some action is likely. Prepare yourself now by doing as in-depth an audit of your own personal finances as An Bord Snip has done of the nations’. It’s a process this column will be addressing too between now and then.


Jill Kerby welcomes reader’s letters. Please write to her The Munster Express, 37, The Quay, Waterford or email at