THE GOVERNMENT will this morning disclose to the Opposition its planned budget adjustment for 2011, which is expected to be between €5.5 billion and €6 billion.
The Cabinet met last night to sign off on its figure for the total amount it hopes to achieve in savings and taxes in next month’s budget.
Sources in two departments said the figure would be between €5 billion and €6 billion, with one pointing to a higher figure of between €5.5 billion and €6 billion.
Ministers began the special meeting at 5pm last night and broke up shortly before 8pm. Minister for Finance Brian Lenihan briefed the Cabinet on the updated economic situation, including yesterday’s Live Register figures.
The meeting also finalised its projections for the expected performance of the economy over the next four years, and the growth anticipated between 2011 and 2014. Mr Lenihan also gave a detailed brief about the treatment of the promissory notes, worth €31 billion, for Anglo Irish Bank and Irish Nationwide. The Government recently disclosed that interest of some €1.5 billion per annum needed to be paid on the promissory notes.
The Labour Party finance spokeswoman, Joan Burton, has said it is one of the main factors behind the doubling of the amount needed to meet the target of a 3 per cent deficit by 2014; from €7.5 billion to €15 billion.
The Department of Finance is expected to deliver the document to Opposition finance spokespeople today before making the document public.
Ms Burton said last night she had suggested to the department an alternative in relation to the promissory note approach that could reduce the overall adjustment by over €2 billion, from €15 billion to €12.75 billion.
“If they issued the as yet unissued promissory notes, worth €8 billion, by the end of the year, they could reduce the interest payments by over €500 million per year.
“The manner in which they have dealt with promissory notes was a colossal mess. Either the Government did not know that they had to add the interest to the adjustment or they knew and chose not to tell us earlier.”
Separately at pre-budget briefings for Fianna Fáil, a large number of TDs and Senators argued against any cuts to either the statutory or contributory old age pension.
Dublin South East TD Chris Andrews argued at a meeting that he would have difficulty supporting such a move. According to one TD who attended the meeting Mr Andrews said: “There’s no more room in our political coffin for another nail.”
Other TDs who urged no cuts to pensions included Minister of State Seán Connick; Longford-Westmeath TD Mary O’Rourke; Sean Ó Fearghail (Kildare South); Sean Fleming (Laois-Offaly); Johnny Brady (Meath West); Margaret Conlon (Cavan-Monaghan); Michael Kennedy (Dublin North); and John McGuinness (Carlow-Kilkenny).