DARK CLOUDS ON HORIZON MEAN IT’S TIME FOR STATE TO CUT SPENDING AND SAVE FOR A RAINY DAY

PASCHAL Donohoe is going to bring in a balanced budget for 2018, but the end of austerity doesn’t mean tough choices are a thing of the past.

Interventions today from the ESRI and the Fiscal Advisory Council may help deflate any expectations of a give-away Budget still lingering from the promise-fest of the Fine Gael leadership election.

There isn’t going to be “pay-back” any time soon for those who picked up the tab for the great crash.

There probably isn’t going to be pay-back ever.

That’s despite the fairly buoyant state of the economy – which has now been growing pretty robustly for most of the last five years – even if it doesn’t always feel like it for those still reeling from the recession.

It won’t be popular, but the current robust pace of growth is a reason not to ramp up spending.

Stimulating the economy made sense when it was in the doldrums – indeed it should have been done far earlier in the crash to soften its impact. But it doesn’t make sense now that private spending is driving growth anyway.

In fact, bar any money used for housebuilding the Irish Strategic Investment Fund (ISIF) – which is made up of cash left over from the old National Pension Reserve Fund – should now be parked and put away for a rainy day.

Between Brexit and Donald Trump, that day may not be far off, but it isn’t here yet.

In the longer term, our ageing population, fragile tax base and increasingly unpredictable

neighbours in Britain and America make for a less predictable and probably less benign future than we might have come to expect.

Meanwhile, budget rules mean that tax cuts the minister manages to squeeze through for next year will have to be paid for by savings found elsewhere or alternative revenue raising.

Similarly, spending increases will be limited to what can be paid for with new income.

In the short term, the Budget itself won’t involve any great new hardships, but it won’t offer much by way of relief either.

A balanced Budget shouldn’t become an excuse for a do-nothing Government.

Without new income or borrowings to play around with, Mr Donohoe and his ministerial colleagues could take the opportunity to take a hard look at the bulk of the €60bn of Government spending that will roll from this year into 2018 and beyond even with an unchanged Budget.

That spending is generally ignored at Budget time because of the understandable focus on what’s changed rather than what stays the same.

But there are undoubtedly things we could do better, get better value from, or simply not do, as a State.