Late last Friday afternoon, motorcycle couriers wove their way through Dublin’s rain-sodden streets carrying small leatherette pouches containing very bad news.

Each year a white paper is published as a prelude to the budget, like a gentle overture before the razzmatazz of the finance minister’s big opus. It shows the direction of the government’s finances for the current year and the next. Most importantly, it shows what the books would look like if the finance minister did nothing on budget day.

What this year’s white paper reveals is that if Brian Lenihan were to make no changes to his spending plans or to next year’s revenue-raising strategies, he would have to borrow €26 billion in 2008 and 2009 to balance his books. That is more than half Ireland’s current national debt of €46 billion, and about one-eighth of its GDP.

Ireland is heading for the largest exchequer deficit in the history of the state — €11.5 billion this year — and therefore the toughest budget in 20 years has to be delivered on Tuesday.

As a nation and, for the most part, as individuals, Irish people are vastly more wealthy than when similar fiscal strictures were last endured in 1988. When Ray MacSharry delivered his final budget, unemployment stood at 18.5%, a public-service recruitment freeze was entering its second year, and income-tax rates still stood at 58% for the top tier and 35% for the lowest rate.

But even though Ireland is coming off a 10-year fiscal high, having revelled in SSIAs, rental properties for investment and overseas holiday homes, there is a public air of fatalism about what is required this week.

Sean Fleming, a Fianna Fail TD, believes there is a public appetite for strong medicine, and anyone trying to sweeten the pill will get little political credit. “People are far more astute assessors of the situation than is put out in the public domain through the media,” he said. “The people coming to us looking for projects in the constituency are matching their expectations to the political reality, they are not as ambitious as they were.” He says there is a scale-back in demand for local sports amenities, school extensions and water facilities.

Such pragmatism has been in short supply around the cabinet table in recent months, however, as ministers took to the adversarial nature of the estimates process with traditional gusto. Each minister has been trying to protect his patch from the axemen of Merrion Street.

From the announcement of the budget date in early September, Mary Hanafin, the social welfare minister, was making bold promises before her spending could be chopped. She has been reassuring “clients” that social welfare rates would not be cut despite the straitened circumstances.

With the exception of the changes to child benefit, which will be characterised as reforms to the system, welfare rates are likely to be increased but not by the €10 or €12 a week enjoyed during the Celtic tiger heyday. Increases in social welfare rates are more likely to track inflation, going up by about €5 a week.

Batt O’Keeffe, the education minister, has been musing all summer about a return to college fees. This was not an idle kite-flying exercise of a fledgling minister, however, rather a canny conditioning process to soften up parents for an increase in college registration fees of up to 100%.

Joan Burton, Labour’s spokesperson on finance, concedes that Lenihan, her constituency colleague, has “an enormous number of difficult decisions” to make. But she warns against doing “the traditional Fianna Fail thing”: opting to borrow for current spending purposes and jettisoning capital spending.

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