FF election pledges 'cannot be delivered'

Opposition parties say the Government will not be able to deliver on key election promises, such as cuts in PRSI rates and increases…

Opposition parties say the Government will not be able to deliver on key election promises, such as cuts in PRSI rates and increases in the State pension, as a result of the Minister for Finance's latest economic forecast.

Fine Gael said there was a "€6 billion black hole" in the difference between economic assumptions in Fianna Fáil's election manifesto and last week's pre-Budget forecast.

Labour said plans to cut PRSI rates could plunge the social insurance fund into insolvency, forcing the Government to make up the shortfall from general taxation.

Minister for Finance Brian Cowen warned last week that the economy had reached a "turning point" and that the rate of economic growth would slow appreciably over the next three years.

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Fine Gael's finance spokesman and deputy leader, Richard Bruton, said Mr Cowen's forecast for the economy contrasted sharply with his forecasts during the general election.

Before the election at the end of May, he had predicted a strong stream of extra tax revenue.

Mr Bruton said Mr Cowen must now "come clean" on which Fianna Fáil manifesto promises would be broken.

"The Minister claims that the manifesto is a five-year programme and does not need to be revised yet because of the revision of growth prospects. This is blatantly false and misleading," Mr Bruton said.

The revised figures represented a cut in growth projection of 28 per cent over three years and deeper cuts in projections for tax growth, Mr Bruton said.

The Labour Party's spokeswoman on social affairs, Róisín Shorthall, said an independent report published into the state of the social insurance fund last week raised serious questions about the capacity of the Government to deliver on promises to cut the main PRSI rates and to increase pensions to €300 a week.

She also claimed that the Government had been in possession of the independent report since last April, yet had still chosen to make its pre-election promises.

"It seems that Fianna Fáil persisted in campaigning on a commitment that they realised would be almost impossible to deliver," she said.

The Taoiseach, however, defended the Government's economic projections and insisted that the State's finances were in good shape.

However, he conceded that the economic situation would be "tighter" next year.

Speaking to journalists at Bodenstown, Co Kildare, yesterday, Bertie Ahern said: "As was shown by the figures released last Thursday, we are spending over €50 billion. We are growing all the time. It is only two years ago that we were on €39 billion.

"The State's finances are in an extremely healthy condition. We expect that 2008 will be a bit tighter than it has been."

Mr Ahern predicted an economic growth rate of about 5 per cent this year.

"What we are not going to do as a Government is to spend what we cannot control. We will continue to take a prudent attitude to fiscal policy," the Taoiseach added.