TAOISEACH BRIAN Cowen yesterday acknowledged publicly that Ireland was in recession but expressed confidence the economy could make a strong recovery from what he said was "part of the economic cycle".
However, the Taoiseach refused to be drawn on the specifics of what might be contained in the budget on October 14th. The Cabinet met for more than six hours on Sunday to discuss a further €700 to €800 million of reductions in public spending for 2009 in addition to some €1.3 billion in savings already agreed.
The weekly Cabinet meeting this morning is also expected to focus on budgetary discussions. Exceptionally, a further meeting has also been scheduled for next Sunday, as Ministers grapple with framing what is widely accepted will be the most severe budget in two decades.
Mr Cowen was speaking to reporters in Tullamore, Co Offaly. Asked about the introduction of a means test for medical cards for those over 70, Mr Cowen was non-committal, saying no decision had been taken yet. And when questioned about possible increases in income tax, he replied: "The Cabinet has responsibility to consider all aspects of expenditure and revenue and capital programme."
Mr Cowen said the Central Statistics Office has made the point that, with a contraction over the past two quarters, a recession has occurred in Ireland.
"That's part of the economic cycle. We can come out of this recession and we can work our way to ensure that we position ourselves that when the upturn comes, we can take on what the public took on before. We must not at any time underestimate the capacity of our own people to confront those challenges, to face up to them and to do whatever is necessary to protect the achievements to the greatest extent we possibly can."
Mr Cowen strongly signalled the low-tax strategy the Fianna Fáil-led coalition has pursued since it came to power in 1997 would be continued.
Fine Gael leader Enda Kenny was critical of what he said was a deliberate tactic by Government of talking up the harshness of the budget while refusing to discuss its responses in public. "The Government is softening up the public after 10 years of wasting public money to an obscene extent," said Mr Kenny during a visit to Galway. "And it is planning in secret while refusing to discuss the issue in the Dáil last week," he added. Meanwhile, Labour leader Eamon Gilmore claimed the Government had no real strategy to deal with the economic crisis.
