MINISTERS HAVE just two days to finalise spending plans for next year before Wednesday's crucial Cabinet meeting, in the face of a demand from the Department of Finance that they impose spending cuts.
Minister for Finance Brian Lenihan has told colleagues they must cut 2½ per cent off this year's figures - a near impossible target for most Ministers.
Clearly, the Government is now set on a public pay freeze for next year - which threatens hopes to get a deal in this week's pay talks.
Even with a pay freeze, Ministers would be forced to cut services by much more than 2½ per cent because wages and allowances cannot be cut.
The Government is likely to offer extra money to low-income families to buy homes under the Affordable Homes Scheme but will deny that it is baling out developers. "These are people who are not able to buy anyway because they would not get a mortgage," a Cabinet Minister told The Irish Timeslast night.
Speaking on Saturday, the Minister for Finance largely blamed the current economic difficulties on international factors.
He said the collapse in the construction industry was the only domestic factor, but that the people had "chosen" to have an era of rapidly-rising house prices.
Meanwhile, the Government will agree to delay major transport projects - such as, perhaps, the Dublin Metro - beyond the end-date of the National Development Plan.
The suggestion from some quarters that the Government is intending to embark upon a hugely-increased schools building programme is scoffed at in some quarters: "It would be hard enough to build what is already planned for year," said one source.
However, Ministers are clearly keen to have as many public-private partnerships under way as quickly as possible, even though progress to date has been slow.
Some Ministers are privately critical of the National Treasury Management Agency's handling of the contract negotiations with builders. "It is hard to see how it is so difficult. Often, the contracts are for the same types of buildings. If you can do one, you should be able to do more," one complained.
Demanding real reforms in the public sector, Fine Gael leader Enda Kenny said most public servants should face a pay freeze, bar the lowest paid.
"It's five years since I pointed out that to pay a €1,000 million extra a year to the public service without asking for any increased performance or greater efficiency was absolutely scandalous behaviour by the Government and we're now paying the price," he said.
Ruling out a return of the Tallaght Strategy, Mr Kenny said Fine Gael would "support the country" and "the Irish people".
The Government has previously described Fine Gael's budgetary proposals as "vacuous", he said: "Corrective action should have been taken. Fine Gael's proposals were treated with contempt."
Divisions between Fianna Fáil and the Green Party are likely over Fianna Fáil Ministers' enthusiasm for a culling of State agencies.
The Greens are unhappy about a proposal to merge the Irish Human Rights Commission with the Equality Authority, the Equality Tribunal, the National Disability Authority and the Office of the Data Protection Commissioner.
