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Tuesday 17 October 2017

Andrew Lynch: Why should OAPs pay for bank blunders?

Is Brian Lenihan ready to press the nuclear button?

Just a couple of years ago, a cut in the State pension or unemployment benefit would have been considered absolutely unthinkable.

Now it seems that the Minister for Finance is actively considering doing both -- even if it transforms him overnight into the most unpopular politician in the country.

The public outrage that would greet such a move is not exactly difficult to predict.

No matter how bad the public finances are, it seems outrageous that pensioners and the unemployed should have to pick up the tab for a crisis that was largely created by millionaire bankers and developers.

If that's the main headline to come out of December 7's budget, then Lenihan's claim to "always look after the little people" will have been destroyed once and for all.

The grim reality, however, suggests that it really could happen.

No matter how you look at it, the €15bn deficit is such a giant figure that it cannot be reached without slaughtering a few sacred cows along the way.

Over the last few years, our social welfare budget has ballooned to around €21bn a year -- and since we're barely taking in €30bn in tax, that's clearly not a sustainable position.

Right now, the non-contributory state pension is €219 a week and standard unemployment benefit is €196.

These figures are among the highest in the world and almost double what people are getting just a few miles up the road in the North. Even allowing for the high cost of living here (which is being gradually eroded by deflation), that's a luxury we simply can't afford any longer.

To make matters worse, the number of people who would be affected by such a move is growing all the time. Life expectancy is getting longer and so are the dole queues. Our growing and ageing population has left us with a ticking pension time bomb, which is another issue Mr Lenihan would be wise to tackle sooner rather than later.

So, the economic case for cutting these payments is actually quite strong. The political argument, however, would be a nightmare. Unlike the French or the Greeks, we don't really do political riots in this country -- but if anything has the potential to bring people out on to the streets in mass numbers, this is surely it.

Slashing the health or education budgets would be relatively painless by comparison. Of course the state of our schools and hospitals is important, but the effects of those cuts are not always visible to the naked eye.

If people who are living on the poverty line suddenly find themselves unable to buy bread or heat their home, however, they will know all about it -- and you can be sure that they will let their politicians know too.

If Brian Lenihan really is gearing up to press the red button, then everybody around him would be well advised to take cover. The political explosion will rock this Government to its very core.

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