THE DECEMBER budget will aim to save about €3.6 billion but will focus on cutbacks rather than tax increases, Minister for Finance Michael Noonan said yesterday.
Speaking at Limerick Institute of Technology, Mr Noonan also said the “basic model of the Celtic Tiger is bust”.
“It is gone, it was a failure. It was great fun, but it was unsustainable and is now over,” he said.
“We got out of trouble before, we can do this again. We are making progress every week.
“When it comes to next year, we will have to do about €3.6 billion. So we are preparing for next year’s budgets and we would prefer to do more cutbacks than tax increases.”
Asked about a letter circulated by a senior civil servant telling Government departments to consider bold and unpalatable measures to achieve cost savings, Mr Noonan said: “This is a statement asking all departments and all agencies to co-operate and outlining the areas that we want examined to see can we make the savings necessary to bring in the 2012 budget.
“So, it is not about this year, it is about preparing for next year.”
Mr Noonan was one of a number of senior Government Ministers reacting to the letter by Robert Watt, the new secretary general of the Department of Public Expenditure and Reform.
Taoiseach Enda Kenny yesterday called for an “acceleration” in the implementation of the Croke Park agreement and urged chief executives of semi-State bodies to play their part in assisting Ireland regain its “economic destiny”.
Speaking at the opening of an extension to Msgr McCarthy Primary School, Cornafulla, Co Roscommon, Mr Kenny said: “I think it is time now in a time of national challenge for everybody to play their part here.
“The Croke Park agreement, the first report has been in and it has measured up but the Minister has made it very clear, as have Government Minister after Minister, that this process has to be accelerated if we are to achieve the full potential of Croke Park.”
Mr Kenny stood over the letter by Mr Watt. He said it reflected the reality that confronted the Government. “Everything is under scrutiny,” said Mr Kenny.
The letter was written to the heads of other departments, and also suggested that certain services might be considered for outsourcing or privatisation. The letter forms part of the comprehensive savings review being spearheaded by Minister for Public Expenditure Brendan Howlin.
Tánaiste Eamon Gilmore said the letter was calling on Government departments to do things “differently, effectively and more cost-efficiently”.