Kenny denies Coalition tension

 

Taoiseach Enda Kenny has denied a rift exists in Cabinet over the upcoming budget.

Mr Kenny's comments come after Minister for Energy Pat Rabbitte said he expected Cabinet negotiations on the matter to be “extremely difficult.”

Speaking in Brussels yesterday, Mr Rabbitte said it would be wrong to hamper the capacity of the economy to expand by seeking additional savings over and above €3.6 billion.

Mr Kenny today denied there was a split in the Cabinet and said more data was required by Government before it made decisions.

“There is no split in the Cabinet. I think the question that Minister Rabbitte was asked yesterday was a clear question and was answered with the level of information that was available to him,” Mr Kenny said.

“The target here is 8.6 per cent (of gross domestic product). And, whatever it takes to reach that target is what the Government has to decide on. And as the Minister pointed out, neither the information in respect of the self-employed nor the corporates are available to Government yet. Nor, indeed, are the projections for the growth figures for next year."

"The picture in respect of the decisions to be made is incomplete,” Mr Kenny concluded.

Minister for Finance Michael Noonan indicated he is likely to seek more than €3.6 billion in savings to keep to the target of reducing the deficit to 8.6 per cent of gross domestic product.

Minister for Public Expenditure and Reform Brendan Howlin has backed Mr Noonan saying the Government was committed to a deficit reduction target of 8.6 per cent, despite the difficult choices this entailed.

However, speaking in Brussels, Mr Rabbitte said it would be wrong to hamper the capacity of the economy to expand by seeking additional savings over and above €3.6 billion.

“We’re committed to meeting a target of 8.6 per cent of GDP in terms of the deficit. The advice I have is that €3.6 billion is likely to meet that target,” Mr Rabbitte said. “I’m giving you my view. Even though it’s going to be painful I think we should stick to that commitment.”

Mr Rabbitte said he was not a proponent of the Big Bang theory. “The €20 billion plus taken out of the economy in the last three to four budgets is very, very severe,” he said.

“I think to do what we said we would do and to take out €3.6 billion in itself will be very, very difficult. We’re committed to doing what we said we would do. But I think those noises off stage who advocate more than that wouldn’t have my support.”

Returning to the theme during an interview on RTÉ's Morning Ireland earlier today, Mr Rabbitte firmly rejected the Fiscal Advisory Council's call for a bigger adjustment.

The inaugural report from the council, the new watchdog on Government finances, published earlier this week estimated that to meet the 8.6 per cent deficit target an adjustment of €4 billion will be required for next year.

"I do not agree with the Fiscal Advisory Council who wants us to go further than planned. I think it would be counterproductive," he said.

"Some people think the objective of the exercise is to punish us. The objective of the exercise is economic recovery," he added.

Mr Noonan responded to the council’s advice earlier this week by repeating his commitment to the 8.6 per cent target even if it took an adjustment of more than €3.6 billion to achieve it.