Cabinet to hold talks over report

The Cabinet is to discuss next week radical proposals to cut up to €5 billion from the Government’s spending.

The Cabinet is to discuss next week radical proposals to cut up to €5 billion from the Government’s spending.

Despite criticism of the proposal to cut social welfare contained in a report from an expert group led by economist Colm McCarthy, Taoiseach Brian Cowen said nothing could be "immune" from examination.

Mr Cowen urged people to face the economic crisis with "renewed fortitude and courage", saying Ireland needed a "major national effort" to get through the recession.

So far the Government has been surprised by the guarded welcome offered by the Opposition and others to elements of the work of the Special Group on Public Service Numbers and Expenditure.

Labour leader Eamon Gilmore offered support for major reforms and job-shedding in the public service, but ruled out supporting any cut in social welfare rates.

Fianna Fáil backbench TDs largely adopted the same position, although their attitudes to some of Mr McCarthy's most drastic proposals will be influenced by reaction from constituents over the weekend.

Equally, most rural FF deputies have been struggling to cope with a wave of anger from farmers over the decision to block new applications for Reps payments, worth nearly €9,000 on average to those receiving them.

The Oireachtas Finance Committee which has been charged with looking at the two-volume report is to advertise for submissions before the end of this month. Its chairman, Fianna Fáil Cork East TD Michael Ahern, said the committee would meet privately next week to decide on its timetable, but hearings would begin in early September.

Dublin South East TD Chris Andrews said he "would be happy" to take another pay cut, and he believed most better-paid taxpayers would share the same view. While social welfare should be protected as much as possible, he accepted the proposals to cut 2,000 special needs assistants.

"We have a massive social welfare bill. In the present climate some harsh decisions will have to be made. But there are other areas that would have less of an impact that should be looked at first," he told The Irish Times. "There needs to be a reform of special needs [teachers]. It has become an industry. Ten years ago, there were 300. Today there are 10,500."

Fianna Fáil Senator Ned O'Sullivan said he would be "actively organising resistance" within Fianna Fáil to the proposed abolition of town councils and the amalgamation of other local authorities.

The Commission on Taxation, which is to recommend wide-ranging changes, holds one of its final meetings today, but its completed report will not be sent to the Department of Finance until mid-August.