MINISTER FOR Finance Brian Lenihan yesterday outlined a number of measures aimed at reducing exchequer spending in 2010 by just over €4 billion, in a budget aimed at restoring order to the State’s finances.
Expenditure savings of €4.05 billion were detailed in Budget 2010, of which almost three-quarters relate to current spending, with most of the remainder coming from capital spending. Mr Lenihan said the reductions were “unavoidable”. This follows more than €8 billion in “budgetary adjustments” over the past year to prevent the deficit ballooning “towards 20 per cent”.
Payroll savings will amount to €1.05 billion, as a result of the Minister’s decision to cut salaries for public servants by 5 to 15 per cent.
This will include hospital consultants, who will have their pay reduced by 15 per cent.
The Government is also planning to cut the bill for professional services by €56 million next year.
Reductions in social welfare payments are projected to yield savings of €760 million.
Child benefit is to be reduced by €16 a month, saving the State €221 million. Rates paid to people of working age will save €425 million. This includes a €10 a week cut in maternity benefit.
Changes to the jobseeker allowance, primarily for those under the age of 24, will achieve a saving of €94 million.
Spending on capital projects has been reduced by €961 million. “The significant drop in construction tender prices means that a very substantial output can be secured from a reduced allocation,” the Budget document states.
Another €976 million is savings will be made in the budgets of other Departments. The biggest saving is in health, where €400 million is to be shaved from its annual cost. This will include reductions in payments made to pharmaceutical companies; a 50 cent an item prescription charge for medical card holders and a number of savings related to the Health Service Executive.
The next biggest contributor is education and science, where €134 million in savings has been targeted. The Government wants to save €50 million on staffing and other non-pay efficiencies in the higher education sector. It is also cutting the rates of student support grants. Changes to teacher support services are due to yield a saving of €7 million, while efficiencies in school transport will deliver €9 million.
The Department of Enterprise, Trade Employment is to save €50 million, relating to cuts in funding for a variety of employment training schemes and initiatives. But a provision has been made for a 21 per cent rise in grants to industry by IDA Ireland, to €81 million.
In transport, the Government’s subvention to CIÉ has been reduced by €27 million to €276 million. No fare increase will be sanctioned in 2010.“The CIÉ companies will seek to minimise the impact by continuing their work to reduce costs and increase efficiency,” Minister for Transport Noel Dempsey said.
In terms of social housing, the Government has indicated a shift in policy away from construction to the leasing of properties.
This is expected to net a saving of €78 million to the exchequer. A range of other cuts are to be introduced across the various departments.
These range from a €2 million cut in funding for Irish language TV station TG4, to a reduction in naval service patrol days and Air Corps flying hours, and a rationalisation by the Office of Public Works of its Dublin office accommodation.
Fine Gael finance spokesman Richard Bruton described the Budget as “jobless and joyless”.
Labour’s finance spokeswoman Joan Burton was equally critical. “There is precious little in today’s Budget that will inject any ray of confidence into Ireland’s households,” she told the Minister.
Isme, which represents small and medium-sized businesses, said “few incentives were introduced to assist smaller enterprises remain in business, develop and grow”.