Cowen to open dole office in native Offaly

IT is, perhaps, a sign of the times — Taoiseach Brian Cowen will today open a new dole office in his native Offaly.

It comes against a backdrop of rising unemployment and a looming recession, with Finance Minister Brian Lenihan making clear yesterday that the Government will not shrink from a tough Budget in December expected to involve targeted cutbacks of €1 billion.

Mr Cowen will officially cut the ribbon on the new, purpose-built Social Welfare Local Office in Castle Buildings in Tullamore at 12.30pm.

It replaces the town’s old welfare office, and will accommodate 24 staff dealing with claims for Jobseeker’s Benefit and Jobseeker’s Allowance and medical certificates for Illness Benefit.

Mr Lenihan yesterday denied he planned to raid the National Pension Reserve Fund to boost the Government’s coffers with tax receipts expected to be down €3.5bn on projections.

He also confirmed the Government will not breach EU guidelines on borrowing, despite the huge pressure to find replacement funding for the slump in tax income. The deficit in 2009 will be kept within the EU limit of 3% of GDP.

Experts have argued the Government should borrow from the fund, worth nearly €20bn, to help it over the difficult patch of sharply falling tax revenues.

Some have also argued that EU borrowing rules should also be breached to help counter the massive shortfall in tax receipts starting to emerge for this year and next as the economy faces a much harder landing than previously anticipated.

But the minister’s response was uncompromising. He said a weekend report that the Government would raid the pension fund to bolster its finances was incorrect.

“The report is unfounded. It has no basis in fact. There are no proposals under consideration in the department along those lines,” he said.

Launching the National Treasury Management Agency’s 2007 annual report in Dublin, the minister made it clear the Government would not take the soft option by borrowing more than is permitted under EU rules or by plundering the National Pension Reserve Fund to help it over the present funding crisis, caused essentially by the massive downturn in the housing sector.

Already the Government has responded to the tax shortfall — expected to be €3.5bn for this year — by announcing cuts of €440 million, to be followed by savings of €1bn in 2009.