Ministers fight plans to curb their spending

MINISTERS are furious over radical proposals that would lead to significant curbs in their Departments' spending.

The Economic Social and Research Institute yesterday published its controversial recommendations for the second half of the six-year National Development Plan.

The State think-tank suggested containing further capital spending on hospital beds, school buildings and railways. In addition, it recommended the introduction of urban congestion charges for motorists, the abolition of incentives for holiday homes, and the replacement of the eight proposed regional waste treatment plants with two or three larger national plants.

The proposals came on a day of mixed signals on the country's economy Central Statistics Office figures revealed strong growth for the second quarter of this year, prompting several economists to predict the country is emerging from the economic gloom. Meanwhile a report from the World Economic Forum ranked Ireland as 30th in terms of global competitiveness, having slipped from 4th place just three years ago.

While Taoiseach Bertie Ahern welcomed the ESRI report, he admitted some Ministers had disputed its proposals It is understood these include Mícheál Martin, Séamus Brennan, Martin Cullen, Noel Dempsey, Dermot Ahern and Éamon Ó Cuív. Government sources argued the

ESRI's perspective was purely economic and did not include social factors.

However, Mr Ahern stressed that it was a good report. "We should all be big enough to take some criticism," he said.

The report said investment in infrastructure, mainly the roads network, should take priority. It said infrastructural improvements since 2002 had added 7% to Ireland's GDP, but it also highlighted poor management of projects, leading to delays, over-runs and soaring costs.

Among the ESRI's more far-reaching suggestions are a possible tax on holiday homes, which it identified as a major contributory factor to increased house prices.

The ESRI also said current levels of investment in education infrastructure needs to be demonstrated. It added it was difficult to justify committing public money to new hospital beds. It said the State subsidises 50% of the cost of private and semi-private beds in public hospitals, and redesignating these could immediately add to capacity. Fine Gael Deputy leader Richard Bruton said the report made sobering reading.

"The competence of Ministers is clearly in question. he said.

Labour finance spokesperson Joan Burton demanded that Finance Minister Charlie McCreevy take responsibility for getting the NDP back on track.