€3.5bn budget plan to stay despite IMF admission

The Government will not reduce the planned €3.5bn adjustment in the budget, despite the IMF admitting it underestimated the effects of austerity on economies.

Enda Kenny told the Dáil yesterday: “We do not intend to change the ratios or figures we have already set out.”

He played down the IMF admission on austerity, instead pointing to other sections in the report about Ireland.

“The IMF report is a global report, and points out one of the few bright spots in global performance has been that of Ireland,” said Mr Kenny. “Our growth rate was 1.4% and it is expected to go beyond that next year.”

But Independent TD Thomas Pringle, who raised the issue, said the Government’s policies would continue to make things worse.

Mr Kenny and his administration were “slavishly following their austerity programme” when the IMF had admitted it was wrong on the effects of austerity, he said.

“Every €100 taken out of the economy costs up to €150,” said Mr Pringle. “In next month’s budget, the Taoiseach intends to take €3.5bn out of the economy again which, according to the IMF, could cost up to €5.2bn.

“Yet the Taoiseach proudly claims he has the country on the path to recovery, and his ministers claim austerity will help us regain our economic sovereignty. How can he seriously tell the House this is correct policy?”

He urged Mr Kenny to reconsider, ask the EU and ECB to admit they got it wrong, and stop austerity budgets.

In his initial response to Mr Pringle, Mr Kenny appeared flippant, telling the Independent TD to pay his household charge.

When Mr Kenny proceeded to address the IMF report, he said Ireland was in a renegotiated programme with the troika to which the Government would adhere.

“The report pointed out that Ireland is making steady progress in challenging times,” said Mr Kenny. We are in a programme… [and] we have had assessments of that programme on seven occasions. The country has met all its targets.

“It is necessary that we continue to do so to restore our economic sovereignty and to have growth again in our economy.”

Mr Kenny also told the Dáil that, despite there being less than two months to budget day, the Cabinet had yet to consider a number of key issues.

“The Government has not considered the question of child benefit,” he said. “The Government has not considered the question of disability benefit. The Government has not considered the question of property taxes.”

It led to a quip from Fianna Fáil TD Timmy Dooley, who asked: “Has the Government considered anything?”