Cabinet meeting concludes after five hours of talks

 

The special Cabinet pre-Budget has ended after some five hours of discussions.

Ministers started to emerge from Government Buildings shortly after 3.45pm, having begun the meeting at 10.15am.

It is one of a series of special Cabinet meetings that will be held between now and the Budget on April 7th. In additon to the routine weekly meeting on Tuesdays, a further meeting has been pencilled in for next Sunday and there is a possibility of a final meeting on the Saturday after the Budget.

As they left Government buildings, Ministers remained tight-lipped about the subject matter of today's meeting.

It is understood that the meeting discused the various options open to Government in its attempts to find the estimated €4.5 billion in savings during 2009.

The Department of Finance was expected to put “an options paper” to today’s meeting outlining the revenues that could be generated from particular tax moves and savings from cuts.

“However, there is an understanding that any tax decisions must be collectible immediately, absolutely immediately,” The Irish Timeswas told by a source with knowledge of the deliberations.

Ministers have not yet decided on the exact amounts that need to be cut from spending, or raised in new taxation. However, €5.5 billion is understood to be near the target and illustrates the Government’s belief that the deterioration in the exchequer’s finances will continue throughout the year.

The need for immediate savings restricts the Government’s ground for manoeuvre significantly, and practically guarantees that the tax levy will be sharply increased, rather than rates.

The Cabinet was also expected to examine the draft report of economist Dr Peter Bacon on the options facing the Government on how to handle toxic debts within the banks. His report recommends the creation of a toxic asset company to remove bad loans from the banks’ balance sheets.