What a difference a year makes. The weekend after last year's budget, the government was on its knees in the face of a ferocious public backlash against what, in retrospect, was a fairly modest measure to end the automatic right of pensioners to medical cards.

Fast forward to budget 2010, the most savage in two generations, and – public sector workers aside – the reaction is one of weary resignation. The expected near-revolution hasn't materialised. Fianna Fáil deputies head home to their constituencies happy – well, as happy as government TDs can be after €4bn of cuts.

That budget 14 months ago was disastrously handled. Brought forward by an inexperienced taoiseach and finance minister to demonstrate a sense of urgency, it was ill-thought-out and badly communicated. By the time the government had begun properly to sell the message that only the better-off would be affected by the changes, nobody was listening.

The lessons of that chastening experience have been learned. It helped, of course, that the almost total lack of awareness last year about the fiscal and economic crisis facing the country has largely gone. But, as it did to an extent before the mini-budget last April, the government crucially put in the groundwork to soften up the public for what lay ahead.

From the moment that the report of An Bord Snip Nua was very deliberately put in the public domain, people were left in no doubt that the December budget would be savage. Cutbacks of billions were required and that meant the social welfare budget and the public sector pay bill could not be left untouched.

It was also the most leaked budget in years, with virtually every major announcement revealed in the media in advance. Nobody could say they didn't know what was coming.

It was telling to hear representatives of the Society of St Vincent de Paul and the Irish National Organisation for the Unemployed on Wednesday evening. While criticising the budget, they admitted they expected it to be worse.

The same held true for large chunks of the population, though social welfare recipients and public sector workers were the obvious exceptions.

The fact that income tax was left untouched (the burden was actually reduced slightly because there was no drop in credits to reflect the current rate of deflation) and the cuts in child benefit were relatively modest meant that many households escaped without too much pain.

The government did what it had to do in sending out a strong signal, internationally and domestically, that it was willing to make the tough decisions. But it also managed, in so far as it was possible, to limit the political fall-out, which was quite an achievement in the circumstances.

"They left the man driving the van and the woman working in the shop alone, and when you take pensioners out of it, they narrowed the damage to a containable section of the population, albeit one [public sector workers] that has been very loyal to Fianna Fáil in the past," was the verdict of one senior opposition deputy.

While the planning clearly paid dividends, the other major difference between now and last year's fiasco was the performance of Brian Lenihan.

For much of 2008, the finance minister resembled a rabbit caught in the headlights. Exhausted and bewildered by the crisis he faced, he initially looked ill-equipped to deal with the massive challenge he faced and he was seriously damaged by the medical cards debacle.

But slowly, over the past year, Lenihan has grown into the job, developing a complete mastery of his brief. He was always a good communicator but as his confidence and authority grew, he started to bring those communication skills to the finance job and, while the message he has had to sell has been difficult, the opposition parties have struggled against him.

Skin and hair flying in cabinet

Lenihan won the Nama debate with the opposition and quite clearly won the argument in cabinet over the shape of the budget. It is well known that some ministers in his government wanted to offset the cutbacks in spending by going for more tax increases, particularly for the very well-off. Lenihan and his officials in the Department of Finance believed the potential for tax increases had reached saturation point and that more hikes would repeat the mistake of the 1980s and do long-term damage to job creation. He very deliberately declared on Today FM's Last Word programme that there would be no tax hikes in the budget, and his views held sway at cabinet.

Sources say rumours of skin and hair flying at the cabinet table over this issue are wide of the mark. Unlike with Bertie Ahern's cabinet, they say, Brian Cowen – in keeping with his 'chairman' rather than 'chief' approach to the taoiseach's job – encourages discussion and debate and that, through this process, Lenihan brought people around to his thinking.

Whether or not this is a sanitised version of events, there is little doubt that the budget bore Lenihan's stamp; the collapse of the talks with the unions helped him considerably in that regard.

"Lenihan is in control of the Department of Finance. When Bertie was taoiseach, he was in control, but Lenihan is calling the shots in finance and Cowen is happy to let him do so," said one government deputy. He added that if there were tensions between the two men they have "abated" as "both men know they need each other".

Lenihan's strong performances in media interviews after the budget reinforced the view around Dáil Eireann that he is the government's biggest asset.

"For the first time there is a sense of direction, a plan, a policy. Lenihan, whether he is right or wrong, is convinced that he is on the right track and because of that he is exuding confidence, and dominated every interview he did last week," said one TD.

It said everything about his confidence that he was willing to make the bold prediction that the "worst is over" and the country had "turned the corner". The comment raised eyebrows inside and outside the Dáil. There were suggestions that the minister had given a hostage to fortune and supplied his political opponents with ammunition if his optimism turned out not to be justified. Lenihan clearly felt he needed to reassure people that all this toil would not be in vain and there was light at the end of the tunnel. But those close to him say that, while the remarks were designed to build confidence, they were "not based on fiction" and that the advice Lenihan is getting is that the economy will return to growth in the second half of 2010.

Heir apparent to Brian Cowen

Whatever about the electorate, the comments must have been music to the ears of beleaguered government deputies. And the word is that Fianna Fáil TDs, up to now unsure about Lenihan, are starting to warm to their finance minister.

"He was in the bar in Leinster House on Thursday night in the middle of a lot of Fianna Fáil lads. I would say he's firmly established as the heir apparent to Cowen," was the verdict of one close observer.

This is also the view of opposition deputies. One TD claimed Lenihan had "an ability to land on his feet", noting that he had come out of the collapsed pay talks perceived as being "on the side of angels while the taoiseach was seen as being on the side of compromise". Even if this view is not entirely accurate, he added, "you have to be lucky in politics and Brian is lucky".

Not that it seems the other Brian will be going anywhere for the foreseeable future. The belief around Leinster House is that, having coming through such a turbulent period, the government's chances of lasting until 2011 and beyond have improved considerably.

"This budget was a defining one in the lifetime of the government. And now that it has been delivered, it will help steady the ship. There is a much more relaxed air around government in the past couple of days," said one influential government figure.

While the taoiseach's authority took another dent over the controversy surrounding the unpaid leave proposal for the public sector, the view in government circles is that he has upped his game in recent months. He may lack Lenihan's communication skills but there is some respect for that fact that, after a decade of government heavily influenced by focus-group findings, Cowen isn't obsessed with following public opinion, even if that sometimes causes serious problems for the government.

The word is that he gave exiled Sligo Fianna Fáil TDs Eamon Scanlon and Jimmy Devins short shrift last week when they sought assurances on Sligo hospital before the budget vote, sending out a clear signal that "he was not going to be negotiating with every Fianna Fáil TD on an ad hoc basis".

Fianna Fáil TDs were late last week whispering (metaphorically touching wood and crossing their fingers as they did so) that in time this budget could come to be regarded in the same way as Ray MacSharry's budgets of 1987 and 1988 – the point where decisive action was taken and when confidence started to return.

But while history may well be kind to this budget, there is little evidence that the electorate will be so enamoured, particularly those employed in the public sector. There may have been a sense of post-budget anti-climax – Paul Gogarty's F-word outburst aside – in the Dáil last week, but come the new year, the political temperature is likely to soar with inevitable industrial relations unrest. The problems with the banks haven't gone away either.

There is confidence in government that there would be little popular support for public sector strikes and a determination that the coalition will face down what has to be faced down, but backbench attitudes might not be so gung-ho if health services or the Leaving Cert were affected.

But those concerns are for the new year. For now the over-riding feeling in government is one of relief, almost disbelief, that it has made it to Christmas in one piece.

"It's incredible that we got here," said one relieved government source last week. "Job done," said another.

Perhaps, just perhaps, it's not only the economy that has turned a corner.

Snap Snips: The cuts you may have missed

* Reduction in funding for TG4; allocations to RTÉ, An Post and the Broadcasting Fund have been reduced by €7m "reflecting lower receipts from the broadcasting licence fee".

* In the Defence Forces there will be a reduction in the numbers serving overseas as well as a cut in the naval service patrol days and air corps flying hours. Also, the controversial Cóiste an Asgard sail training scheme is to be abolished.

* An Post and the Central Bank will be charged the same amount as banks for security cash escorts.

* The amount allocated to allow adult medical card-holders to avail of dental treatment from private dentists is to be reduced by €30m.

* Funding to Fás and Skillnets for training those in employment is to be cut; the Fás training allowance of €204.30 per week to new entrants not entitled to jobseekers' benefit is to be abolished.

* There will be cuts of €78m in social housing by changing over from the purchase and/or construction of such houses to leasing arrangements.

* The OPW will cut €62m off its budget by rationalising the considerable amount of private office space it rents in Dublin.

* Opening times for national parks and monuments are to be "revised" to cut down on costs.

* Allowances to diplomats serving abroad will be cut.

* €28m cuts in funding for sports, tourism and arts programmes.

And some Good news that might have passed you by

* €1.1bn will be spent next year to complete the major inter-urban roads connecting Dublin to Cork, Waterford, Limerick and Galway, as well as the upgrade of the M50.

* €625m will be allocated to the Luas extension to Cherrywood, the Western Rail Corridor, the Kildare Route and the opening of phase one of the Navan line.

* The estimated €3bn Metro North will receive funding for planning enabling works.

* €25m will be invested in the controversial Smarter Travel scheme.

* €880m will be spent on social housing, including retrofitting of public housing and urban regeneration, particularly in Limerick and Ballymun.

* Despite the past disasters such as Ppars and e-voting machines, €42m will be invested in IT, particularly to streamline welfare payments and tax collection.

* €50m will be invested in flood relief measures and flood protection with increased resources made available "if required".

* €579m will be spent on the school building programme .

* €50m will be invested in computers for classrooms.

* €6m will be invested in the Horse and Greyhound Racing Fund.

Martin Frawley