This was a crisis Budget. It demanded a major change of direction to re-invent how the government does business. It had to rein in the cost of running government to prevent the imposition of crippling taxes. It had to offer initiatives which would break the economy out of the frozen embrace which is now killing employment. This was no mean challenge. For once, there was a mood that everyone was willing to step up to the plate and make an effort.

A government, which had created a huge hole in our public finances, had to show that it understood the follies of policy that had drawn us to this state, and was taking a path that could lead us out.

The first step on that path was to accept that no government had ever taxed its way to recovery. The Minister instinctively must have known the truth of this. Indeed he said it often enough when he was defending his unravelling October Budget. However, as the great lumbering colossus which is government started to address the crisis, the two main tasks of the Budget were forgotten. The old habits of soft-option politics elbowed away back central stage.

• They diffused the sense of urgency by spreading the adjustment needed over too long a period.
• They convinced themselves that it was impossible to cut the cost of running government unless you were willing to cut social welfare.

Instead of a focus on cost-cutting efficiencies and a dynamic economy, the attention turned to how you could raise taxes and what capital investments you could abandon. The result was revealed last Tuesday.

• Huge tax burdens on ordinary families and the promise of more in 2010 (to cost the average family €4,000), yet less than a quarter of the structural deficit has been corrected in the first two years. By bottling decisions on spending the government guaranteed a painfully slow pace of correction. This sword will still continue to hang over the economy in 2011.
• Chilling figures on the growth of interest that will have to be paid on public debt – set to rise from 12% of income tax in 2008 to 60% by 2013.
• A perverse mix between cutting the cost of running government and raising taxes – two-thirds of the adjustment is to be shouldered by taxpayers.
• Nothing was done to protect employment – the easy option of deep cuts in capital spending, shaving a cumulative €6 billion off investment over 3 years, enough to support 32,000 people in direct employment.

Viable businesses and the workers they employ, which are now mortally threatened by the collapse in business and the lack of credit, will see nothing positive in this Budget cocktail.

This Budget was about choices. As a community we are experiencing a cut of 20% in our incomes. The shape of the Budget decides who takes the pain. If you choose to do nothing about a system of government that has grown too heavy to be supported by the rest of the economy, then you force the adjustment to be taken in that economy. The market economy knows only one way and that is to close businesses and make people unemployed.

If those of us who can protect ourselves, or who have the muscle to resist change, are not challenged, then it is the weak and the unprotected who will take the hit.

It is always easier to target families with tax increases or the weak with cuts in their entitlements, because they are not organised. Tackling excessive bureaucracy and poor efficiency does take political courage. However, I believe that if the Minister had done so, he would have been surprised at how much support he would get from within the public service. Many public servants recognise that they have been trapped in a system that is failing them. It is a system which does not reward innovation or success. It conceals under-performance. It makes managers powerless.

It could have been otherwise. This was a time to be ambitious about public service reform. It required the Ministers to set a clear target to cut the cost of running government (outside of the social welfare) by 20%, to accept that the public service paybill had to fall further, to force every agency to bid for its money based on concrete commitments on what they would deliver for users of their service.

This framework could revolutionise the way we do public business. It would make managers and their budgets depend on the results that they deliver. It would give them the authority to cut out bad and inefficient practices, and reward their success. It would reveal the poor performing programmes that would have to be abandoned in these difficult times. It would force the issue of staff moving from areas of low importance to the areas of priority.

Such reforms would harness the ambition and ingenuity of our talented public service at a time when it was never more needed. Without their commitment we cannot protect the weak, or find room for the initiatives that would protect jobs and provide a platform for investment.

This Budget will reap a harvest of anger and frustration. It is not just because of the extra taxes that people are being asked to pay. It is because it failed to square up to the challenge that everyone recognised.