McCreevy takes axe to public spending

FINANCE Minister Charlie McCreevy will today unveil tough cutbacks in efforts to abruptly halt runaway public spending in one fell swoop.

Mr McCreevy will detail pared-down public spending plans for 2003, which will hark back to the dark days of the late 1980s.

The so-called Estimates, which chart spending worth almost €38bn in all Government sectors, will also confirm the Budget in three weeks time is to be the toughest in a decade.

The average spending increase across all Government departments will be just a little ahead of inflation, which is running at almost 5%.

These minimal increases compare with spending increases of over 20% during the past two years. Today's figures must also be set against inflation in some sectors such as health, where it is in excess of 10%.

Only the key areas of health, social welfare, transport and education will escape the full brunt of the axe with increases of 6% to 9%. But even here little more than half the new school buildings promised at election time will be delivered.

In the health sector, the Taoiseach himself last night announced 200,000 people will not get medical cards promised in the health strategy unveiled 12 months ago.

The extended health protection was again promised, mainly to low-income families, in the Fianna Fáil election manifesto.

Taoiseach Bertie Ahern yesterday specifically warned his TDs and Senators to brace themselves for some very tough times ahead.

A special briefing for the FF parliamentary party has been fixed for this afternoon to help them mount a damage limitation defence in national and local media.

Many FF backbench TDs are understood to be enraged at having to face constituents in almost half of the 30 areas promised new school buildings last May and explain why it will not now happen.

The minimal increases in the four departments health, education, social welfare and transport will be offset by cuts right across the other Government departments.

There will be relatively better news for Transport Minister Seamus Brennan, who expects to be among those to keep pace with inflation, netting something over €1.7bn for next year.

This will allow the transport department advance the bulk of the 26 major road projects under way. But Mr Brennan's ambitious plans to develop other projects will be frustrated by lack of funds.

Mr McCreevy survived a Fine Gael no-confidence vote last night after almost three hours of stormy debate. He got the backing of 82 TDs, while 61 were against.