The Cabinet will meet again this afternoon for further discussions on the four-year budget plan that Minister for Finance Brian Lenihan said last night would involve a contribution from everybody in society.
After the weekend break, Ministers will resume their deliberations on Monday as they seek agreement on a €15 billion plan of spending cuts and tax increases that is due to be unveiled in two weeks’ time.
During the two-day Dáil debate on the economy, which concluded yesterday evening, Fianna Fáil and Green Party speakers reiterated their commitment to securing more than half of the adjustment from spending cuts.
Brian Lenihan said making the adjustment would be difficult and everybody would have to make a contribution.
“At all stages, we must protect the vulnerable in so far as we can, but we must not allow any section of the community believe it cannot make any contribution. Everyone must make a contribution and those who have most must contribute most, but everybody will have to contribute something.”
He said over the past decade living standards for all, including for those dependent on social welfare payments, had increased considerably; over the past five years the lowest rate of welfare payment had gone up by 45 per cent.
“If we make the adjustments now, we will ensure a better hereafter for our economy and our children. If we act resolutely, the reward for all of us will be the securing of a strengthened economy and renewed society for us and the next generation,” he said.
During the Dáil debate Government speakers attacked the proposals made by Labour Party leader Eamon Gilmore to deal with the economic crisis, including his commitment to securing half of the necessary budget adjustment from tax increases.
A number of Fine Gael speakers also differed from the Labour approach, declaring that they favoured a stress on spending cuts rather than tax increases in the plan.
Fine Gael transport spokesman Leo Varadkar repeated his party’s commitment to a package of spending cuts over tax reductions in a ratio of three to one.
Tipperary South TD Mattie McGrath, one of the TDs the Government will be depending on to pass the budget, differed sharply from his former colleagues, saying that while he accepted the need to reduce the budget deficit, he did not accept the need to reduce it to 3 per cent of Gross Domestic Product (GDP)by 2014.
Green Party TD Paul Gogarty called for further pay cuts for Ministers and TDs and also called for the abolition of the current system of State cars. “It appalled me to see Ministers driving into Farmleigh in their Mercs as it sent out the wrong message. I, for one, do not agree with it. We need to show leadership. We need to show leadership and vision,” he said.
Speaking in Dublin last night, Mr Lenihan said it was a completely false contention that the European Union was dictating the Government’s economic and financial policy.
“I do reject that entirely, because Brussels is simply reflecting what world markets are saying,” he told The Irish Times.
He said the European Commission and the markets had been making assessments of Ireland, but “we have to make our own assessment and take action. That’s the point.
“The decision is ours to take. We have to demonstrate a credible pathway out of our difficulties. Others can tell us what our difficulties are, but we have to demonstrate a credible pathway out of them.”
He said there had been a “good debate” in the Dáil this week.
Mr Lenihan was guest of honour at a reception in the King’s Inns Library to launch the third edition of Cassidy on the Licensing Acts by Constance Cassidy SC.
In his speech launching the book, Mr Lenihan quipped that, after he had cut the excise duties on alcohol in last year’s Budget to reduce cross-Border shopping, the Financial Times commended him for his overall fiscal correction of €4 billion but noted that he had administered “fiscal painkillers in the form of cheaper drink prices”.