Dark clouds over the budget

It is less than a week to the budget and the Indy's Hamish McRae introduces us to the grim realities of the future shape of budgets.

it will contain elements that next year the new government will have to incorporate into its own policies. We are going to get a glimpse of the future.

he writes

The harsh realities of the public sector finances will be laid bare.We will get realistc economic forecasts and most importantly when it comes to tax revenues

if you look at what has been happening for the past five or six years, revenue tended to come in below the level that the Treasury expected. Now it is collapsing. The reason for the collapse is that the boom had concealed the fact our tax system had become structurally much weaker than it was a decade or so ago. It has been over-dependent on types of revenue that could not be relied on. At a company level these included the corporation tax paid by banks and oil companies, and North Sea oil revenue itself. At a personal level these included tax on capital gains, on stamp duty on housing, and income tax on bonuses.
The consequence of this can only be a claw back in public spending.

It is surely time to batton down the hatches