The Government has been accused of reneging on a pre-election promise not to introduce health cuts, following its decision to put on hold the recruitment of 800 staff in the health services.
The jobs freeze, which will save the Exchequer €10 million this year, comes as the Minister for Finance, Mr McCreevy, increases pressure on his Cabinet colleagues to pare back budgets.
The Minister for Health, Mr Martin, confirmed last night that 800 of 6,000 approved health jobs, mainly management and administrative, would not be filled this year "as a corrective measure".
But he rejected allegations the freeze amounted to "health cutbacks", pointing out that there had been an increase of 30,000 in the numbers employed in the health service since 1997.
Mr Martin also announced yesterday that from August 1st the charge for private patients in private or semi-private beds in public hospitals would increase by €3 per overnight or day case to €36.
The moves were announced on the same day the Minister approved an 18 per cent increase in VHI charges, effective from September 1st. The increase is the largest rise in VHI charges at any one time and will put an extra €65 a year on the annual Plan B subscription bill.
Members on Plan B in a group scheme will pay an annual premium of €430 (net) on their renewal date.
Opposition parties were quick to attack the measures last night, describing the jobs embargo as a "complete betrayal" of Government promises in the run-up to the general election.
Late last Friday night the Department of Health announced an increase in the charge for patients attending accident and emergency units without a doctor's note, and changes in the drugs refund scheme.
Government sources said last night that cuts across other Government departments were expected to be announced in the next fortnight before Ministers took their annual holidays.
Mr Martin said it would not have been realistic to veto the VHI request for an 18 per cent increase while expecting the health insurer to maintain its current level of coverage to members at a time of increased claims.
He said while he accepted the increase was large, it was less than forecast. He said if he was to meddle he would be "financially undermining the integrity of the VHI board".
VHI's chief executive, Mr Vincent Sheridan, defended the increase, saying VHI had done everything possible to keep the increase to the absolute minimum.
"This 18 per cent increase is necessary to ensure we provide the wide range of comprehensive healthcare benefits that our 1.54 million members want," he said. Private health insurance still represented excellent value.
The Minister told The Irish Times the measures announced yesterday would have a minimal impact on patient services.
He said the bed payment increases were part of an "overall package of efficiency measures " decided by Government that represented a valuable source of finance for public hospitals.
The Fine Gael spokeswoman on Health and Children, Ms Olivia Mitchell, said the sick and the disabled were being asked to pay for five years of profligate spending and Government mismanagement of the public finances.
"It is a nonsense for the Minister to say that the 800 agreed posts, which will now not be filled, will have minimal impact on patient services. If these posts were not intended to impact on health services one would have to ask what was their purpose in the first place," she said.
The Labour Party spokeswoman on Health, Ms Liz McManus, accused the Minister of Finance of being a "hypocrite".
"Clearly he knew before the election that there would be these cuts. He specifically said there would be no cuts, overt or covert," she said.