Lenihan defends Budget during radio grilling


Fresh, or perhaps not so-fresh, from presenting his tough Budget to the nation yesterday, the Minister for Finance this morning endured the traditional grilling from listeners on the Today with Pat Kennyradio show.

Referring to the 1 per cent levy being imposed income up to €100,100, Mr Lenihan said: “We are asking taxpayers to pay more in the Budget, I can’t argue with that . . . we are in a very difficult economic position . . . it is not of our making, it is international.

“The Government decided to deal with the economic crisis as quickly as possible . . . we want to get back to a path of success, and that is what this Budget is about,” the Minister said.

“It is not any easier for the Government or myself, or anyone else in public life that it is for those at the front line facing these difficulties”.

Host Pat Kenny put it to Mr Lenihan that there was “no doubt” that if Irish banks had behaved property, the country would not find itself in this position, adding “It’s as if this Government has just arrived from Mars, you guys presided over it.”

“I think our banks have done very well, given the fragility in the world economy to last as they have” the Minister responded. “We can blame ourselves . . . or we can have a positive attitude about the wider world and take measures that suit our own path of development”.

Responding to another caller, Brian Lenihan denied he had handed over money to the property industry in his Budget and rejected the claim that the Government was involved in any form of subprime lending.

“If people want to borrow money, they’ll have to pay for it . . . we’ve always had an arrangement in this country that the Housing Finance Agency provide funds for first-time buyers who are unable to access credit from banks and credit institutions.”

“All we have done [in this Budget] is provide that the threshold for qualifying such a loan are increased . . . there is nothing unusual in that,” Mr Lenihan said.

Mr Lenihan said it was very important that housing prices fell and that the market found its natural level but added that Government was allowed to look at the situation of the first-time buyer, “so that they can buy a house at an inexpensive price . . . and price themselves a mortgage at whatever they can afford to pay”.

He added that there was a large number of affordable houses in the State, and that “many, many” of these house lie unoccupied.

“Be assured, I am leaving the [housing] market alone . . . that’s why I left the stamp duty on houses alone,” the Minister said in response to one man who pleaded for the Government to stay out of the housing sector.

Answering medical-related questions from other listeners, Mr Lenihan said that health costs were high in the State, and that the Government cannot encourage further inflation in medical expenses, which he said seemed to rise “much faster than any form of inflation.”

“I don’t think it is a good idea that the tax system should actually incentive that constant increase in medical expenses.”

The Minister clarified that medical expenses incurred in 2008 will get the full rebate but added that medical expenses incurred next year would be subject to reduced 20 per cent tax relief.

Discussing his €10 airport tax, the Minister told another caller there was no point flying out of an airport in the North in a bid to avoid this tax as there was already a £10 levy on airports there.