FG accuses FF of creating budget black hole of €6bn

FINE Gael yesterday claimed that it had discovered a “black hole” of almost €6 billion in Fianna Fáil’s election promises.

In a withering attack on Tánaiste Brian Cowen’s pre-Budget forecast, FG deputy leader Richard Bruton claimed that the Finance Minister had changed his tune since the election to the value of a cool €6bn.

“In May, the Minister for Finance published his forecast for the economy and predicted a strong stream of extra tax revenue. Now five months later he has cut his growth projection for the first three years of his term by 28% and made even deeper cuts in his projection for tax growth.

“By year three, 2010, he now expects to have €5bn less than he said in May,” asserted the FG finance spokesman.

“If we assume that in the last two years of his term, the economy will achieve the growth he hopes for and tax responds in the way he hopes (which many would think optimistic), he will still have a black hole of €5,690 million in his manifesto due to the shortfall in tax.”

Mr Bruton said that for FF to fulfil its manifesto obligations, real gross national product would need to grow by 8.6% in the last two years of this Government’s five-year term.

He said that if Mr Cowen believed that was going to happen, he was the only one on the planet to think that.

The FG deputy leader went on to say that some promises would not be fulfilled and called on Mr Cowen to spell out what would be abandoned.

However, speaking in Bodenstown, Taoiseach Bertie Ahern denied that FF was engaging in cuts. He did accept, though, that the finances would be “tighter” next year than had been predicted. “All the time we are continuing to increase public services and that is to continue,” he said.

“You will see that we are spending over €50bn this year. Only two years ago it was €39bn.”

He said that the economy remained healthy but added: “We expect 2008 to be a bit tighter than it’s been.

“What we are never going to do as a Government is spend what we can’t control.

“We will continue to take a prudent attitude to fiscal policy,” he said.

Meanwhile, the Government was attacked on another front when Labour’s Social Affairs spokesperson Róisín Shortall claimed it would not be in a position to deliver on election promises to cut PRSI rates and increase pensions to €300 per week.

Commenting on a study conducted by Mercer consultants, Ms Shortall argued that the Government ignored its findings during the general election, even though it knew that to make good on the PRSI and pension promises, it would need to raise taxes.