Next Monday is Budget Day. By now the Minister of Finance has received and evaluated the various proposals from the social partners and non-governmental organisations. Where possible he will seek to merge these with the programmes submitted by the various ministries and place everything into a context.

This context is represented by the government's electoral programme and policies, the current international economic situation and the social requirements of the country. From what I have heard and read so far, the common trend has been requests to the government to spare us all from further taxation and further increases in the water and electricity charges.

We are taking for granted the fact that so far the international economic recession has not bitten into our economy as much as it has bitten into other economies in the eurozone and beyond. We are also taking for granted that the government's policies to meet the challenge of the international recession have so far prevented any escalation of unemployment. We are also taking for granted that, during this year, the government has spent more than budgeted because of additional expenditure to safeguard jobs and has earned less because the slowdown in our economy has meant that revenues from all forms of taxation (direct and indirect) did not meet budgeted levels.

However, we are very wrong in taking all such things for granted as we would be avoiding one key issue - the reforms that are still required to increase productivity in our economy.

For the last years I have argued that together with the Budget, which in a way can be described as an exercise in allocating financial resources to various items of expenditure, the government should also publish the operational targets and results which the Public Service and the wider public sector are expected to achieve given these resources. Somehow, there is still a disconnection between the financial input and the outputs and outcomes.

This would make the Public Service more accountable to the public it is meant to serve. The title of this week's contribution needs to be seen within this context. We have always tended to analyse the Budget by assessing the economic and social impact of changes in taxation, or the launching of new initiatives, or increases in social benefits. Let us face it, when speaking of welfare reform or tax reforms we know that there is little room for manoeuvre as the experience of the last year has shown us. The introduction of VAT in 1995 speaks volumes in this regard.

The area where room for manoeuvre for reforms does exist (and it certainly is not small) is in the way the Public Service and the wider public sector operates. Over the last two decades we have witnessed the progressive rolling back of the state from operating activities in the economy.

This was a very important reform, which was then followed by another interesting initiative with the utopian sounding title "better regulation initiative". The Public Service has also gone through extensive reforms but the general feeling with the public at large is that there is still too much red tape.

The feeling within the business sector is not more positive; if anything it is more negative. Businesses cannot help feeling that they can invest more, they can produce more wealth, they can generate more jobs if there were less red tape.

This does not mean doing away with controls. There need to be proper controls but those controls need not block up initiatives that are good for the economy. For example, I am not the only one who believes that we could be losing out on EU funds as a country because the procedures that are being used to administer these funds are too cumbersome.

There are projects and initiatives about which the government has already expressed a favourable opinion and that are held up because of the inertia that red tape has created. Businesses are starting to fear that, unless the red tape is cleared, this will become a brick wall.

What does all this have to do with the Budget? To my mind there is a very simple connection. If by clearing up the red tape we create more wealth, more investment and more jobs, the government will have more financial resources at its disposal to implement its social programme.