IN his opening comments at 3.45pm last Tuesday the minister for finance, Brian Lenihan, said: "I want to assure the Irish people that we have the capacity and your government has the will to bring us out of this period of severe economic distress."

Nobody can question the fact the government has the will to bring us out of the crisis. But do
they have the capacity? We asked a number of
?top commentators for their assessment of the budget.

Marc Coleman

Economist with Newstalk

"You need to look at Tuesday's budget in a budgetary context and in a political context. From a budgetary context, it was a success as it grabbed the bull by the horns and created a fiscal position whereby we will have done enough to get our deficit close to 3% by 2013.

"However, economically, it did this in the wrong way. Instead of increasing taxation it should have cut current spending. Instead of cutting day-to-day current spending, they are going to do it by laying people off. This is far more damaging than what it should have done which is to keep employment levels where they are and reduce pay for everyone in the public service on more than €40,000 a year.

"Politically speaking, some mistakes were made. The abolition of the Christmas bonus for welfare recipients plus the cut in overseas aid will save the government €256m. They could have saved €300m by freezing salary increments in the public sector. Surely the unemployed need their Christmas bonuses and the poor in the Third World need aid more than the public sector needs salary increases."

Tom O'Connor

Economist with Cork Institute of Technology

"I think that this budget will
drive people into the black economy. I do not agree with taxing people who earn €15,000 with an income levy.

"According to statistics for the end of 2008, almost 800,000 people earn under €30,000. By hitting all these people with a levy, they have an incentive to enter the black economy as there is a high discouragement to work.

"Whilst the levies are progressive, hitting the low- and middle-income earners with a 2% levy and increase of 2% in health levy will cause immense hardship. The government got its fiscal rectitude right, but it did nothing to create employment.
Pandering to international economic opinion
and credit rating agencies whilst watching people lose their jobs and the live register going over 400,000 is counter-productive."

Dan McLAughlin

Chief economist with Bank of
Ireland group

"I think most people felt that they had to tighten the fiscal policy and reduce the forecast deficit. What surprised me was the mixed scale of tax increases... it was quite astonishing. I am also surprised at how enamored the government is with capital spending. In general, it is a good thing, but not all capital spending is money well spent, and we can't afford it. I thought it might have been better to cut it by more and not raise taxes as much.

"The scale of the tax increases are high as they represent a 4% fall income for an average income house rising up to 8% for higher earners. That will inspire negative sentiment among consumers, but the government obviously feels that capital spending will give momentum to the economy.

"We have to wait for more detail on the National Asset Management Agency, but I do find it curious that they are not just taking impaired loans."

Peter Sutherland

Former EU commissioner and chairman of London School of Economics

"The message really is that we have a major budget deficit problem. Everybody knows that and we also know that the difficulties of getting out of that are considerable .

"What we are not recognising is the fact that we have great strengths and that the position in many respects is not quite as bad as it is being painted in terms of Ireland as a whole. The Irish economy is very resilient and if you take the public and private sector together we don't have a current account deficit. It is the public finances that are the problem here. They have to be remedied and it is going to be very painful but the basic condition of Ireland is not the basket case that is being presented both at home and abroad by any means."