TAOISEACH BRIAN Cowen refused to say if the Government will cut child benefit in next month’s budget.

However, he said that while no decisions had been taken, “every area of public expenditure, including social welfare, must be looked at in the context of what contribution it can make towards the €4 billion savings that must be made to stabilise the deficit”.

Budgets, he said, were not about false choices. “Certainly there will be an opportunity in the pre-budget outlook debate that can take place here in coming weeks for parties to outline their positions as to how they would make up the €4 billion saving,” he added.

Mr Cowen said Minister for Social and Family Affairs Mary Hanafin had been outlining the various options and issues on the RTÉ television Frontlineprogramme on Monday night.

Fine Gael leader Enda Kenny said his party believed that savings could be achieved, and the reductions and adjustments made, without touching child benefit.

“I want to be absolutely clear on that. There are thousands of families now heading towards negative equity, and thousands of families where one job is gone or two jobs are gone as the case might be,” he added.

Mr Cowen said that there had been a trebling of child benefit for the first two children and an increase of more than 185 per cent for the third and subsequent children since 2001.

The cost of child benefit at the time was about €960 million and was now about €2.5 billion, he added.

The overall social welfare budget was more than €21 billion.

Mr Cowen said that the total exchequer income, at the end of October, was €26 billion.

“Clearly large areas of expenditure, including social welfare of course, cannot be immune from consideration when the Government decides what savings to make,” he added.

“The Minister, Deputy Hanafin, was simply outlining that position and saying, obviously, that the Government will make the decisions in due course.”

Mr Cowen said the Government was always trying to achieve, in the context of any expenditure savings or adjustments that had to be made, to protect the least well off to the very best extent it could.

Declaring that he disagreed with the Taoiseach, Mr Kenny said that the Minister had not appeared on a popular television programme, “merely to muse aloud in what has amounted to a cruel exploitation of hundreds of thousands of families who do not know where they stand in regard to child benefit”.

Mr Kenny said that the child benefit payment to more than 600,000 families, in respect of one million children, had been a direct income support to hundreds of thousands of those families.

He claimed that the Minister had either been “flying a kite or deliberately laying down a marker”.

Mr Kenny said it was acceptable to pump billions into banks and to allow people who borrowed enormous amounts of money to swan around as if they were untouchable by any law.

“Yet people who find themselves in negative equity, or who have lost a second or sole income, are faced with a senior Minister implying that it is the Government’s intention to cut child benefit,” he added.

Mr Cowen repeated that total expenditure must be looked at in all aspects.

“Where there are limited resources, one must target those resources to best effect and do so in as socially just a way as possible,” he added. “It is not easy, given the scale of the issues before us,” the Taoiseach said.