Given the continuing recession and the drastic fall in tax revenues and growth in the budget deficit, a united approach is needed in the country as a whole to overcome the current great challenge. A continued pay freeze in the public service is likely for more than twelve months.
A freeze in pension payments and an amendment to the two-thirds of final salary rule will also have to be brought in as the taxpayer cannot afford this ongoing commitment that was too generous 30 years ago when it was brought in and is now a huge millstone around the public finances.
This week the Taoiseach is out in Japan, promoting the Irish pork trade but also giving him some reflective time. He must realise that some of his appointees in Finance and Enterprise and Employment lack the experience for these positions.
Back in 1987, when we had a similar crisis in the public finances, we had the Tallaght Strategy where Fine Gael did not oppose the budget or the spending estimates and supported the new national pay deals with Fianna Fail. Now we are back at such a critical phase again.
John Gormley, The Green Environment Minister, noted that Labour may want an election, but what would they do? He wanted them to spell out their plans for cuts and tax increases.
In Germany, after the unification of that country, their public finances went into deficit also, a near dead heat in an election saw a call for a national Government under Angela Merckle the Christian Democrat leader. This has worked successfully and could be brought in here.
Bring Fine Gael and Labour into Government, put Richard Bruton into Finance as he has far better ideas than Brian Lenihan and make the Labour Party Leader Minister for Labour, Enterprise and Employment so he can persuade the unionsto give ground in the public sector where the big pay problems now lie. The benchmarking was a disaster and without that ten percent, there would be better stability in the public finances.
It has been hinted that a national government would be a good solution, it would also give the right message to foreign investors after the Dell closure and the financial breakdown of Waterford Crystal into receivership that the country is serious in sorting out its problems.
Could other high tech firms like Intel and Hewlett Packard follow Dell out of Ireland and hit our exports. Last week, the Government had to pay more for international borrowing. The rate of interest paid for bonds is higher than all members of the Euro zone, bar Greece and above that of Italy where there are also big deficits.
There is a lack of confidence in Ireland now that this has to be rectified. A national Government would give the public confidence also in the future. Tough decisions are needed in the months ahead. Some Fianna Fail Ministers may lose their jobs in this scenario and they will oppose it but the national interest should be what is first.
Have Fianna Fail the stomach for this measure? The Greens would probably agree but could lose a cabinet seat. Mary Harney would probably retire with the opposition taking Health. Let the debate begin and remember where you read this first.