CURRENT SPENDING should not out-distance revenue, Minister for Finance Brian Lenihan told the Dáil. “That path leads to unsustainable borrowing, less room for manoeuvre, lower growth and a heavy tax burden.’’
He added that he was not prepared to bring the Republic back to the days of unsustainable borrowing, lower growth rates and a heavy tax burden.
Outlining the economic progress of recent years, Mr Lenihan said the State’s economic potential was clear and had been attested to by all economic commentators. “The economy can grow at 4 per cent per annum once the cyclical effect of the housing adjustment washes through.’’
Mr Lenihan said the “glass was very much more than half full economically’’.
He accused the Opposition of ignoring the serious implications for a small open economy like Ireland of problems that even the world’s largest economies were having difficulties coping with.
“Ireland is not immune to international developments. Since the late 1950s it has been clear that Irish prosperity is strongly associated with deep international links.’’ If Fine Gael did not understand that it would not be able to give economic direction.
Mr Lenihan was speaking during the resumed economic debate. The House passed a motion supporting the Government’s economic policy by 79 votes to 62.
Fine Gael finance spokesman Richard Bruton said the State had been losing export market share for five years in a row because of the Taoiseach’s stewardship of the public finances.
As minister for finance Brian Cowen had increased spending far in excess of the growth of the economy, ignoring the wise counsel set out in the National Development Plan.
“He funded those increases on the back of property taxes everybody knew were unsustainable. I pointed this out at each budget, but he pushed ahead relentlessly.’’
Minister for Enterprise, Trade and Employment Mary Coughlan said minimum savings amounting to €24.551 million, on a total expenditure of almost €2 billion, would be achieved across all areas in her department.
However, she was determined that the key agencies would remain sufficiently resourced to ensure strong delivery in terms of inward investment, growth of the indigenous sector, research and development and upskilling the workforce.
There would be no reduction in places on community employment or jobs initiative schemes, and no savings were being sought on programmes for people with disabilities. Some €19.15 million in savings would come from the Fás allocation.
She said combined savings of €2 million had been identified across a range of groups, including the Health and Safety Authority, while administrative savings would be delivered by the development agencies.
Ms Coughlan said Ireland’s innovation performance remained strong, and the level of product and process-innovation activity was above the EU average for manufacturing and service-sector firms.
