THE GOVERNMENT will disclose details today of the major infrastructure projects that are to be dropped as a result of a €750 million cut in the 2012 capital budget.
The most high-profile casualty of the cuts will be the flagship Metro North underground system in Dublin. Other major transport projects that will not go ahead are the A5 motorway to Derry (which was a cross-Border initiative) and the Dart underground. There are also question marks over plans to connect the two Luas lines.
Elsewhere, one of the major health projects, the construction of the National Children’s Hospital, may go ahead but with funding raised outside normal exchequer channels. Minister for Public Expenditure Brendan Howlin has been exploring the possibility of seeking an upfront payment for the National Lottery licence when it comes up for renewal on January 1st, 2012.
In the past there have been staged payments for the licence. But Mr Howlin has asked to see if it would be possible to require the successful bidder to pay the entire licence fee at the start of the process. A source suggested that could generate somewhere between €400 million to €600 million. The estimated cost for building the new children’s hospital is €650 million.
Minister for Finance Michael Noonan confirmed last week the Government would be seeking an adjustment of €3.8 billion in the budget in order to bring the State’s deficit down to 8.6 per cent of gross domestic product (GDP). The target provides for some €2.2 billion in cuts and €1.6 in taxes and revenues.
Meanwhile, Minister for Social Protection Joan Burton has said no decision has been made about cuts to her department’s expenditure in next month’s budget.
Ms Burton was responding to a report in The Irish Times yesterday that her department’s spending would be cut by €700 million.
“Nothing is decided on the budget until everything is decided and there has been no detailed discussion yet in Cabinet in relation to social protection,” she said.
Speaking at the 2011 Annual Social Inclusion Forum in Dublin yesterday, Ms Burton said she was unable to comment on detailed budgetary matters but added that “there have been absolutely no decisions of any kind made yet”.
“All I can say is that the object of this budget will be to produce a balanced budget that will provide a further basis for economic growth and development and in particular get people back to work.”
Although she remained tight-lipped on where the inevitable cutbacks might be achieved within her department, Ms Burton said there was a lot to be learned from Scandinavian countries, where she maintained a greater emphasis was put on access to services rather than cash payments from government departments.
One example that would be looked at in this country was the replacement of back-to-school funding with the direct provision of books and other materials directly through the schools.
She accepted the Government faced a very tough situation because of its commitment to the memorandum of understanding with the EU, ECB and the International Monetary Fund.
Taoiseach Enda Kenny and Minister for Transport Leo Varadkar both said separately yesterday that the Government would not tax work unduly in the budget.
Sinn Féin social protection spokesman Aengus Ó Snodaigh called on Ms Burton not to cut social welfare in the budget.
“The programme for government contains a commitment to protect social welfare rates, but there is a real fear that the Government will introduce cuts by stealth,” he said.
