MINISTER FOR Social Protection Éamon Ó Cuív has signalled that pensioners may not be exempt from cuts ahead of a further Cabinet meeting on the budget today.
“To say that no one over 65 years can afford to make a contribution is patently nonsense,” the Minister told reporters at Leinster House.
Ruling out a reintroduction of the Christmas bonus for social welfare recipients, Mr Ó Cuív said rich pensioners would have to make some contribution in the budget.
“There are people over 65 who have pension pots that are literally worth millions of euro, so you cannot say that in all measures in the budget tax and otherwise that any particular income is absolutely immune to cutbacks,” he said.
Strong opposition to cutting the old age pension has been expressed at meetings of the Fianna Fáil parliamentary party while the Green Party has also come out against such a move. However, some of the entitlements enjoyed by people over 65, such as higher income tax thresholds, larger tax credits, exemption from Dirt tax and a range of free State services, are likely to be curtailed.
Taoiseach Brian Cowen has stressed in recent days that no final decisions on the detail of the budget cuts have yet been made. The Cabinet, which met yesterday, will meet again today for further budget talks.
Last night the two Independents who back the Government, Michael Lowry and Jackie Healy-Rae, expressed their opposition to any cuts in the old age pension.
Mr Lowry told The Irish Timesthat he had put down a marker telling the Government not to touch the pension and that position had not changed. "A budget which reduces the old age pension will not be passed by the Dáil. Its as simple as that," he said.
Jackie Healy-Rae and his son, Michael, who will be the candidate in South Kerry at the next election, met the Taoiseach yesterday to convey their views on the budget.
In a statement afterwards, they said they had raised their “grave concerns” with regard to any proposed cuts to the old age pensions or the carer’s allowance.
“While recognising the terrible financial situation our country is in, they were adamant south and southwest Kerry will not be forgotten and left behind,” the statement read.
In the Dáil yesterday, Labour’s spokesman on justice Pat Rabbitte called on the Taoiseach to hold an immediate general election. “It is like the last days of the Roman Empire around here at present. Would it not be better for the Taoiseach to get into his car, go to the Áras and dissolve the Dáil, and let us return some certainty and confidence to the governance of this country?” he asked.
Mr Cowen rejected the suggestion, saying the Government was determined to bring forward a four-year plan and a budget. “If the deputy believes, in the context of the scale of the challenges that face us at present, that a further election based on the divergence of policy that is emerging on the other side of the House would give us an outcome that would provide certainty, he is a better man than me,” the Taoiseach said.
Last night Fine Gael’s spokesman on communications Leo Varadkar also called for a general election, saying a new government that would put jobs and growth at the centre of its economic policies was vital.
Meanwhile, Central Bank governor Patrick Honohan said yesterday there was no reason why Ireland’s borrowing costs would not fall back to more sustainable levels, if the Government’s fiscal policies were implemented. “There will be a point at which it will make a lot of sense to go back in [to bond markets],” he said.
If Ireland could convince outside investors that the Government’s four-year programme would be implemented, then current “crisis” levels of Irish bond yields would fall, he said.
While his comments appeared to calm markets towards the end of the day, they did little to stop the relentless pressure on Irish bonds for most of the day.
Yields on Irish 10-year government bonds soared to more than 8.7 per cent yesterday, more than 6 percentage points higher than the equivalent German bond.