Howlin says no decision taken on €4bn cuts

MINISTER FOR Public Expenditure and Reform Brendan Howlin has refused to be drawn on whether the Government will opt for a €4 billion adjustment in the December budget.

He said the Fiscal Advisory Council’s recommendation on the figure would be listened to, together with all the other factors the Government had to take into account.

The commitment was to reduce the deficit to 8.6 per cent of GDP next year.

“The exact quantum of the adjustment to reach that target is currently being determined,” he added.

“We need to have a firm determination of the growth rates and the final accounts, in terms of taxation and revenue to the State, before we make a final determination on that.”

Fianna Fáil deputy leader Éamon Ó Cuív said that following the general election, and with the full knowledge of the challenges facing the country, Taoiseach Enda Kenny had pledged not to increase income tax rates or bands. Tánaiste Eamon Gilmore had promised there would be no social welfare cuts, he added.

However, Minister for Finance Michael Noonan had refused to rule out such measures.

Mr Ó Cuív said the Minister should tell the House, once and for all, if the Government would honour the commitment made by the Taoiseach and Tánaiste.

“I will not be announcing the budget today,” replied Mr Howlin.

“It is a matter for the Minister for Finance on a date to be determined.” He said the full layout of the estimates, reform agenda and budget would be determined by the Cabinet next Tuesday.

The Taoiseach would then give the Dáil the full information on the process and the sequencing of announcements.

Mr Howlin said Mr Ó Cuív had responsibility for social welfare when the national recovery plan was drafted. The former government, he said, had left a legacy of a hole to be filled by social welfare reductions of €1.91 billion, he added.

Mr Ó Cuív said he was asking for a simple Yes or No answer about a commitment made by the Government.

Mr Howlin repeated that the budget’s contents would be known when the Minister for Finance announced them.

“If the deputy wants to know what will inform decision-making, it will be the programme for government,’’ he added. “I invite the deputy to read it.”

The Minister said the Government had to have regard for the fiscal reality and the mess left by the previous government.

Sinn Féin’s Mary Lou McDonald said Mr Noonan had already accepted the council’s advice that the cuts should be ratcheted up to €4 billion.

“As the Minister weighs up this matter, do the social costs of this type of brutal austerity feature in his thinking on the comprehensive spending review?” she asked.

Mr Howlin said the consequences of the Government’s decisions for every citizen were carefully balanced.

“We must make choices that are difficult, choices we would rather that we did not have to make,” he added. “We will not pretend, however, that there is some magic solution.” Sinn Féin in the North, he said, was cutting €4 billion and scores of schools were going to close. It was the reality of being dependent on external funders.

Ms McDonald said she welcomed Mr Howlin’s recently found interest in the North and its budgetary circumstances.

“If he examined what has happened just up the road, he would discover that despite a cut to the block grant, the Executive has worked to ringfence services and to create new income streams for the most socially disadvantaged,” she added.