Budgetary gloom as Cowen warns of ‘adjustments’

TAOISEACH Brian Cowen has given the strongest signal yet that the Government is readying for a tough budget as he prepares for spending cuts.

Mr Cowen warned “temporary adjustments” may be on the way as the economy tightens and ministers prepare for the annual fight for the money available in December.

“We have to manage the economy prudently in the interests of the country and any temporary adjustments to avoid permanent damage to the economy have to be considered,” he said referring to the build-up to the budget.

He added that people realised Ireland could not be “immune from adverse developments taking place internationally”.

Mr Cowen also made it clear plans for current spending would need to be “moderated” in light of the downturn in economic growth.

“You have both capital and current expenditure to contend with in terms of your budgetary approach and I’ve been making it clear that with the rate of growth our current expenditure would obviously have to moderate in the context of tax revenues not being as buoyant as they previously were,” he said.

However, he said growth rates for the lifetime of the National Development Plan (NDP) to 2013 could pick-up once the next two slow years have been passed.

Finance Minister Brian Lenihan insisted big infrastructural projects would not be hit by the downturn, but also had a gloomy message regarding the Budget.

“The budgetary position this year will not be as favourable or as rosy as it has been in recent years. Obviously tough decisions will have to be taken by the Government,” he said.

Fine Gael education spokesman Brian Hayes accused the Government of “lying” about the NDP and said the Taoiseach, the Finance Minister and Education Minister Batt O’Keeffe had given different answers over whether €252 million promised for school computers in the NDP was a firm commitment or an “aspiration”.

“At least one of the trio of Mr Cowen, Mr Lenihan and Mr O’Keeffe is lying. They must clarify who is lying and who is telling the truth,” he said.

Meanwhile, the Taoiseach indicated a new core leadership for the public services needed to be head-hunted to drive reform.


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