The chief minister says the Isle of Man budget next month will involve 'pain and unhappiness in some areas'.
Allan Bell says work has been continuing in departments of the Manx government for several months, to try and meet very demanding financial targets in the wake of the massive reduction in VAT revenue.
He says it is time to believe and understand that the Island has to live within its means.
On Manx Radio's Sunday Opinion, he said those means had been drastically reduced in recent times, and government's ability to provide services would be reduced commensurately (first part of audio file):
Mr Bell also confirmed his belief that the Isle of Man now set the standard for sovereign credit ratings among small jurisdictions.
That followed the weekend announcement by rating agency Standard and Poor's that it had reduced the credit ratings of nine European countries, including France which, like the Isle of Man, now stands at AA+ (second part of audio file):
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