Opposition warns of tax hike to bail out economy

The Opposition last night resumed their attack on the Government over allegedly misleading the public during the general election campaign, in the wake of the publication of the latest Exchequer returns.

Fine Gael's finance spokesman Mr Richard Bruton said the truth was now coming out "about the extent of the misrepresentation in the last budget and in the run up to the general election."

He called for the introduction of a Fiscal Responsibility Act "to bring the buccaneering approach of the Taoiseach and his Ministers to an end." He claimed that tax increases were on the way, and that past tax cuts introduced by the Government were part of a "buccaneering approach".

The weak and those dependent on public funds would be targeted by health, housing and education cuts.

"Here is now clear evidence that the acceleration in public spending and the collapse in tax revenue is not explained by any change in the real economy. The truth is that the Government has allowed spending get out of control.

"The Government have made tax concessions in the budgets of 2001 and 2002 for which they had no accurate estimate of the cost.

This buccaneering approach to tax relief will now present ordinary workers with potential deficit of €5 billion on budget day before new tax measures are introduced."

Labour's finance spokesman, Mr Brendan Howlin, said the latest Exchequer figures showed that Mr McCreevy's economic policy was in complete disarray.

"Having told the nation to 'party on' in the good times, while keeping the bleak emerging facts from the public's knowledge until after the election, the Minister's credibility is at rock bottom. And as usual with Fianna Fáil Ministers it is the most vulnerable in society that will pay the price for his incompetence.

"And as the economy gets worse, we are now borrowing money abroad to save it in the National Pension Reserve Fund which is losing it on the stock exchange. It is sheer madness," said Mr Howlin.