GOING INTO the final stages of the election campaign, Taoiseach Brian Cowen has described the latest exchequer figures as “encouraging”, but the Opposition have labelled his comments as “astonishing” and accused him of pre-election spin.
Mr Cowen said it was encouraging that the exchequer figures had come in on target, and added that there were hopeful signs that the recession was bottoming out. He said the Government had taken tough decisions and would continue to do so.
Minister for Finance Brian Lenihan said that the end-of-May figures, which revealed a deficit of €10.6 billion for the first five months of the year, were broadly in line with his department’s projections.
The Minister added that the Government’s focus would be on further spending cuts rather than tax increases in order to get the public finances under control.
“As I have said on a number of occasions since the supplementary budget, the scope for further income tax increases is limited. Therefore, as set out in the supplementary budget and as I have said on a number of occasions since, the majority of the future budgetary adjustment will have to be borne on the spending side of the Government account,” said Mr Lenihan.
He said the year-on-year decrease in taxation had improved from an end-April decrease of 24 per cent to an end-May decrease of 21 per cent. “While the rate of decline has flattened out, it must be acknowledged that there are significant targets to be reached in the months ahead.” Mr Lenihan said that expenditure on public services so far this year was progressing as expected, with the main pressures being in the health and social welfare areas, where the Government is prioritising resources.
Fine Gael deputy leader and finance spokesman Richard Bruton said it was astonishing that the Taoiseach would describe the continuing collapse of the Irish economy and public finances as encouraging.
Mr Bruton added that, on the basis of these trends, the Government would have to borrow €21 billion this year, giving Ireland the worst public finances of any EU country.
Labour deputy leader and finance spokeswoman Joan Burton said the Government’s claims about the exchequer returns had more to do with pre-election spin than with the figures themselves.
Exchequer deficit triples as tax receipts down 21%: page 20; Editorial Comment: page 17