Budget measures will lead to surplus, says Enda Kenny

Taoiseach Enda Kenny has said he is confident next week’s budget will help the State to record a primary surplus in 2014 and allow the Government to begin reducing the national debt.

Addressing the Fine Gael national conference in Limerick last night, Mr Kenny said the Coalition's two objectives for the budget were to carry on the work of repairing the public finances and to continue to invest in improving competitiveness and the creation of jobs.

“The €2.5 billion adjustment will deliver a deficit of 4.8 per cent next year and a primary surplus also, which means our debt can start to reduce,” he said.

A primary surplus is achieved when tax income is greater than the day-to-day cost of running the State when excluding interest payments on the national debt.

Among the delegates who arrived at the South Court Hotel following yesterday's Cabinet meeting were Minister for Jobs Richard Bruton, Minister for Environment Phil Hogan, Minister for Agriculture Simon Coveney, Minister for Finance Michael Noonan and Minister for Health James Reilly.

Dole queues
Mr Kenny spoke positively of the work done by Minister for Social Protection Joan Burton but said more effort was needed in the area, where he said reform was avoided by previous governments, so people would not be condemned to years in the dole queues.

The Taoiseach said every jobseeker had rights and responsibilities but that in the current circumstances facing the State nothing was guaranteed. “If people want to continue to receive benefits then they must engage with services . . . it’s compulsory,” he said. “Work must pay and be seen to pay.”

Mr Kenny said the vast majority of citizens wanted to get back to work as soon as possible but that a number were “locked in a range of welfare traps” as a result of a “culture fostered by previous governments”.

“The traps take opportunities away from them and their children and we need to remove those traps and break that cycle,” he said, adding that social employment clauses and a new housing assistance programme would hopefully help people in such situations.

Mr Kenny said corporation and income tax rates would not be altered as the Government wanted to ensure Ireland continued to attract investment and ensure that those who were returned to work found the process rewarding.

The Taoiseach also spoke positively of the decision to cut the VAT rate for the hospitality sector from 13.5 per cent to 9 per cent, which many in the sector fear may come to an end, saying it had created 15,000 jobs since its introduction in 2011.

Problems
Welcoming delegates to his native Limerick, Mr Noonan hailed the progress made by Fine Gael and Labour in their first 2½ years in Government.

He asked delegates if they thought the Government would have been able to overcome the problems posed by Anglo Irish Bank, the bank guarantee and the loss of 250,000 jobs in the State following the economic crash in such a short time.