THIS time last year, in the weeks before the minister for finance, Brian Lenihan, delivered his "the worst is over" budget, the Sunday Tribune asked five 'fantasy finance ministers' how they would make the necessary savings on budget day.

One year on, Labour leader Eamon Gilmore starkly claimed last week that "the worst is yet to come".

As the government and two main opposition parties have agreed a commitment to reduce the budget deficit to 3% by 2014 and details of a four-year budget plan are currently being hammered out, the Sunday Tribune asked some prominent figures to put themselves in Lenihan's shoes and explain how they would approach Budget 2011.

Four of our fantasy finance ministers participated in the same exercise last year, with Dr Garret FitzGerald added to the line-up.

Minister Niamh Brennan
Director of Centre of Corporate Governance at UCD, Accountancy expert, and head of the Dublin Docklands Authority

"Broadly speaking, the minister for finance has two choices – increase taxes or cut expenditure. Cutting public expenditure has to be the preferred choice, because of the disincentive to work from increasing taxes, and the effect on the black economy if taxes are increased (of which there is already evidence).

"As someone who has worked in the public sector almost all my life, I believe there are ample opportunities for greater efficiencies. The bulk of public sector expenditure is payroll costs. Are payroll costs managed properly in the public sector? We in the public sector who are lucky to have good, pensionable jobs should show our appreciation by working hard and serving our stakeholders well.

"But at the end of the day, we all have to share the pain, which is particularly galling given that the pain has been landed on us by a relatively few reckless people. As my late mother-in-law used to say when faced with more guests for dinner than she had planned: 'divide small, go over all'.

"But we need to be particularly mindful of those who are suffering most (no job, young children to raise, exorbitantly priced house at extensive commuting distance from work, mortgage under water, negative equity). Budget 2011 should ensure that those who can bear the pain most suffer it most."

Minister Garret FitzGerald
former Taoiseach

"I would give priority to ensuring that the institutions which buy our bonds are satisfied that we were tackling the problems energetically and on an adequate scale.

"I would be concerned to minimise damaging social effects while recognising the fact that the level of income tax in Ireland is much lower than elsewhere, having been reduced, as a percentage of GDP, by almost one-third by Charlie McCreevy. To the extent that it may be possible at this stage, I would be concerned to remedy the absence of residential property taxes and water charges, which is an almost unique feature of our tax system."

Minister Tom O'Connor
Economist at Cork institute of technology

"If you update the wealth figures in the Bank of Ireland report (2006), you will find that there are 33,000 millionaires in Ireland who hold €121bn in wealth. A 1% wealth tax would yield €1.2bn.

"I would also reduce pension tax relief to the standard tax rate which would save €1.4bn and cut capital allowances to businesses by €200m (one of the 111 tax reliefs). I would introduce a 50% top marginal tax rate on anyone earning over €100,000 and this would yield €1bn.

"A stimulus package using €3bn from the National Pension Reserve Fund would increase taxes and reduce unemployment payments by €1.1bn this year while generating extra taxes next year and the years thereafter. The housing stimulus package would take €200m off rent allowance costs next year."

Minister Jim Power
Chief Economist at Friends First

"I am not convinced that an economy that is in such deep recession could actually cope with a €5bn withdrawal from the economy in 2011. There is a danger that serious unintended consequences might result, such as further serious distress amongst personal borrowers, which in turn would cause even more difficulties for our dysfunctional banking system.

"Whatever way one goes about it, coming up with €5bn in savings will be very painful, but if that is the target, then it should be done in the least economically damaging manner. I believe that the bias should be towards cutbacks in expenditure rather than increases in taxation, although some taxation measures will be necessary.

"The introduction of a flat water charge of €200 could raise €300m. It would obviously be more effective to meter water, but due to prevarication and incompetence, that is not possible at this juncture.

"Taxation of child benefit and cuts in the benefit paid for third and subsequent children could save up to €700m. A reduction of €300 in the personal tax credit could raise €525m, and would go some way towards broadening the tax base. A 2% increase in the top rate of tax could raise €360m in a full year. A 10% cut in public sector pensions could save €220m.

"A 2.5% increase in the corporation tax rate could raise up to €600m. I believe that the corporate sector could withstand such an increase, provided government addressed the inordinately high cost of doing business in Ireland.

"A 5% reduction in the social welfare bill, through a combination of cuts in the rates of payment and a tightening of eligibility, could save up to €900m. A property tax or site-valuation tax, set at €500 on average, could raise €500m.

"Some €1bn should be trimmed from the capital budget, simply because we cannot afford it. Metro North should be given a Christian burial immediately, as it is a total waste of taxpayers' money. Money should be transferred from the NPRF to capitalise a new state bank focused on the beleaguered SME sector."

Minister Lorraine Sweeney
Entrepreneur, Hotelier and Catering Business Owner

"After a really tough year in business, I despair at the state of our finances, and our prospects are poor unless those in high places make the right decisions. As an entrepreneur, there is little incentive, reward, support or appreciation for those of us who are job creators at this time.

"The budget needs to be growth-orientated. Stimulation is needed in the economy. So positive steps need to be taken. For example, don't tax us out of business – reward job creators, maintain present personal tax levels and offer measured tax breaks to stimulate certain sectors.

"Radical action is needed, and I believe that €1bn in savings could be made through cutting social welfare such as rent allowances and the basic job seekers' rate. Another €1bn in savings could be made if all government departments reduced their overheads as we in business have had to do. And another €1bn can be saved through cuts to capital budgets.

"A further €1bn savings could be made through a public sector pay freeze (€250m), efficiencies in the workplace under the Croke Park agreement (€500m), a reduction in agriculture repayments schemes (€250m), reduction of children's allowance (€250m), General Medical Services scheme savings (€500m) and savings in politicians' salaries, expenses and pensions (€250m). That would amount to €5bn in savings.

"The minimum wage at current levels is crippling the country and making us uncom- petitive. My final word is that if the banks don't start doing business with business people we are all fecked. To say the least they are impossible to deal with."