FG warning on 'budget bribe' for election

Taoiseach Bertie Ahern praised the buoyancy of the economy as Fine Gael leader Enda Kenny warned against an election budget next December.

Mr Ahern said it was obviously hard for people to compare the strength of the economy when it was growing at a rate so many percentage points higher than anywhere else in the EU and in the world economy.

"People in the United States, Japan, Australia, Canada and the rest of Europe can see that we are outperforming them. The three tax heads - income tax, VAT and excise, are almost exactly on target and corporation tax and capital taxes are well ahead of target. Overall, it looks as if taxes for the year will come in €1.75 billion ahead of target."

Mr Kenny said the Government had collected €40 million more in taxes than was forecast in last year's Budget. It was projected that it would collect €2 billion more in taxes this year than was forecast.

Warning against "a big budget bribe" later this year, Mr Kenny added: "In the year before the 2002 election, public spending increased by 40 per cent. There was a different minister for finance. We were told we should party and forget about the hangover. However, that hangover consisted of stealth taxes and charges, budget cuts, services slashed and an inability to provide proper services with the people's money. The cost of living soared, competitiveness fell and jobs were lost in manufacturing."

Mr Ahern said that by any standards the economic figures were good. "They consistently follow what this Government has been doing in soundly managing the economy through excellent fiscal policies."

Mr Kenny said that in spite of the strong economy, the Government had presided over chaos in accident and emergency units, with 20,000 people on waiting lists and MRSA rampant in hospitals.

"Crime rates are rising and detection rates falling with 29 murders this year alone and violent gun crime out of control on the streets. There is no effective road safety strategy and prices are rising faster than the rest of Europe. The economy is hugely dependent on personal debt in consumer spending and the construction sector."

There were transport delays and difficulties for commuters every day on the roads.

Mr Ahern said there were 600,000 more people working. "The population has increased by 14 per cent, so two million people are on the road every day and that creates difficulties. We export €150 billion of goods that cannot get from Ireland to other countries without transport."