Kenny’s no to Gilmore
ENDA Kenny has rejected Eamon Gilmore’s call for the planned €3.1billion of cuts and taxes to be reduced – signalling a split in the Coalition ahead of the Budget.
ENDA Kenny publicly rejected his deputy Eamon Gilmore’s call for the public to be spared the full burden of €3.1billion of cuts and tax rises in October’s Budget.
The Tánaiste suggested over the weekend the public should not be shouldered with a €3.1bn adjustment if it is not necessary to meet the country’s growth target of 5.1 per cent.
However the Taoiseach yesterday rejected the idea the Government could ease austerity in its October 15 Budget.
He stressed the Budget will be driven by the objectives of putting the public finances right and i nvesting i n work and employment.
Mr Kenny said any short-term relief from backing off from the country’s deficit reduction plans would be ‘far outweighed’ by the impact on jobs and growth.
He also suggested it could have an i mpact on i nterest rates, caused by the loss of confidence and investors withdrawing money that would arise
‘We can’t stray from the path’
should Ireland ‘stray from the path agreed’.
While the Tánaiste had suggested the Government could offer some respite to hardpressed families and workers, Mr Kenny appeared to rule out the notion.
At the MacGill Summer School in Glenties, Co. Donegal, he said: ‘Hitting our agreed budget targets is an absolute necessity if we are to successfully exit our bailout by the end of the year.
‘Failure to follow through on all the hard work and sacrifices of the Irish people now, so close to the bailout exit, jeopardises everything we have all worked for. We cannot allow this.
‘The people of Ireland would not forgive us for faltering at the last fence. Ninety per cent of the fiscal consolidation is now complete. I want to finish the job, and finish it as quickly as possible so families everywhere can begin to plan for the future with confidence’.
The comments set the two most senior members of Government at odds and indicate the Coalition parties are already disagreeing on the basics of the adjustment required.
Mr Kenny acknowledged the public had been burdened with spending cuts and tax rises but said the Coalition would not shy away from austerity.
He said: ‘ I appreciate the measures we have taken to close the gap between revenue and public spending have been very difficult and painful for many people and families.
‘But we are still adding €1billion a month on to the national debt to pay for public service salaries, social welfare and other services. This is not sustainable. This Budget is an opportunity to take those last big steps required to get our national finances under control’.
Earlier this week Social Protection Minister Joan Burton said she did not believe a €440million reduction in her department would be possible.
But Mr Kenny yesterday sent a warning shot to any members of Cabinet about the scale of adjustment required.
‘Every Minister will have difficult decisions to make to deliver on the savings they have promised. The public have entrusted us with the national finances and expect us to do our duty no matter how difficult it may be.
‘The best way to support our local economies is through the creation of jobs. Any flexibility we have in the budgetary arithmetic should be used for more investment in job creation.
‘More investment in schools, primary care, economic infrastructure, transport and tourism projects is what will help get people back to work’.
The Coalition is battling the Troika behind the €85billion bail- out to reduce the burden on taxpayers by securing permission to spend some of the €1billion in savings from the Anglo promissory note deal.
Yesterday the chairman of the independent Irish Fiscal Advisory Committee warned the Government it must cut social welfare spending to meet its bailout target.
John McHale said the social protection budget accounted for 40 per cent of Government spending and had to be cut otherwise public services would be affected. He said: ‘ There’s already been substantial cutbacks in health spending. It would mean that the burden would fall elsewhere. And with impact on public services.’
Professor McHale said it was important for the country’s credibility to stick to the agreed fiscal targets.