Taoiseach Brian Cowen has dismissed suggestions the Government was “softening up” the electorate by being unclear about cuts in the forthcoming Budget.
"Let's avoid word games. We need to cut our deficits. The minimum figure we're talking about is €3 billion. The Minister for Finance is setting out our intent very clearly," he told RTÉ's Morning Ireland today.
“We will do whatever is necessary to ensure fiscal stability returns to the country over a period of time. It won’t be done overnight, this year’s Budget will not solve the problem in any event whether it’s €3 billion or € 3.1 billion or €3.2 billion.
“It is important that people understand that for every €5 we spend, we’re taking in €3 in exchequer returns,” he added.
Pressed on whether final cuts could amount to €4 billion, Mr Cowen said he didn’t expect it to be that much but did not want to “pre-empt” discussions that were about to take place at Cabinet level.
Asked when the changes promised under the Croke Park agreement would be implemented, Mr Cowen said the Government had to “align the estimates campaign" with the industrial relations agenda.
“Every department will be dealing with its own staff, management and personnel over the coming months, explaining that simply we have to get more from less and that we need to avoid impacting on services," he said.
Minister for Finance Brian Lenihan signalled yesterday that the Budget could be more severe than previously expected and the Government may seek even deeper cuts than the €3 billion in adjustments already promised. He said the figure of €3 billion was only indicative and was a minimum that would have to be achieved to help address the State’s struggling finances.
Fine Gael communications spokesman Leo Varadkar said this morning there was only a certain amount that could be taken out of the economy without risking pushing it back into recession. “I’m not convinced taking out more than €3 billion would not do more harm than good,” he said.
“The worst thing about Brian Lenihan’s comments is that they add to uncertainty. There are people driving to work this morning, they’re worried about their jobs, their incomes and now they’re worried about what the Government has in store for them in the Budget.”
He said his party would “find the €3 billion” in a very different way. “We don’t think increases in income tax or levies are appropriate. We would try and reduce spending as much as possible. We would reduce the number of state agencies and look at subsidies paid to state companies which are more than they should be,” he said.
Asked this morning about the possibility that cuts could exceed €3 billion, Minister for the Environment Gormley said: “We haven’t had detailed Cabinet discussions as of yet on the Budget… we intend to intensify those discussions over the coming weeks.”