Budget 2011 will take place on Tuesday December 7th. In the next few weeks, Brian Lenihan and the Department of Finance will be looking at their options to reduce the budget deficit of €20bn per annum.
This annual deficit of €20,000m means the government is spending €20bn more than it receives in revenue from taxes.
So, if you were the Minister for Finance, what would you do first in order to cut the deficit?
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I would definitely cut public sector pay. The rational behind this is explained on my weblog (Economics 102 @ https://economics102.wordpress.com/) in an article titled Economic policy, least squares and the Elliott wave
to to cut the amout of tds and reduce the doll
1) Stand up to the unions.
The unions of this country have a strangle-hold on our public-sector budget. For years they have being requesting, and being granted, unreasonable pay rates. These rates were in no way in line with productivity. The government is too intimidated by the unions to actually provide logical and necessary wage-rates and cut-backs. They claim to represent the working classes and ordinary people, but in reality they are just marxist junkies who will not take one-step in the direction of sacrifice that this economy needs, without threatening strike.
2) Alternative methods to raise Capital
This may be unheard of, but I really think there is more feasible ways for the govt to raise Capital apart from the soverign debt markets. We all seen the disaster at the last bond auctions where interest rates increased. Even one or two diverse methods on the governments “portfolio” per-say could greatly increase our protection from rising interest rates.
3) Cut social well-fare.
€200 a week, really?
4) Cut minumum wage.
If the minumum wage was to decrease following a cut in social welfar, the overall wage-rates in the economy would follow. In 2007 Ireland was the 4th most expensive EU-15 to do business in. We need to become more competitve, even if we are moving away from the low/semi-skilled labour industries.