UNION REACTION: The Government's spending cuts were sharply criticised yesterday by SIPTU, the country's biggest trade union, which described them as "savage".
A group representing the unemployed also expressed "shock" at the cuts, announced in the Budget Estimates on Thursday.
The Construction Industry Federation said it was "dismayed" at the planned reductions in capital spending.
However, ISME, which represents small and medium enterprises, gave the Estimates a "guarded welcome".
In an angry response yesterday, the general president of SIPTU, Mr Des Geraghty, said the cuts were "unnecessary and savage" and would be counter-productive.
The Economic and Social Research Institute had consistently warned that wholesale cuts in capital spending would prevent the country from fully capitalising on the next upswing in the global business cycle, he said.
The Minister for Finance, Mr McCreevy, had ignored this advice and cut expenditure on capital programmes by about 10.5 per cent in real terms.
This would likely cause increased unemployment and deeper recession, said Mr Geraghty. "Unfortunately, ordinary workers will bear the brunt of this cavalier approach."
Transport, health and housing programmes would all be adversely affected, he said.
"Most astonishingly of all", the Government had ignored the economic realities facing young families by scrapping the first-time buyers' grant without warning.The Irish National Organisation of the Unemployed said it was "distressed" by the planned cut of 5,000 places, from the present number of 25,000, on community employment schemes.
Mr Liam Kelleher, director general of the Construction Industry Federation, said capital spending was being sacrificed in order to balance the books.
"This is an extremely short-sighted approach," he said. There was now no prospect of the National Development Plan being delivered within the time frame proposed, he said, and Ireland's competitiveness and attraction as a location for international investment was being undermined.
ISME also said it was concerned at the "reining back" of commitments.
However, its chief executive, Mr Mark Fielding, dismissed claims Mr McCreevy had engaged in a "slash and burn" approach.
"The reality is that the level of Government current expenditure has been running well in excess of target over the last number of years, placing severe strain on other areas of the economy."