Harney rules out ‘kneejerk’ tax rises to aid economy

FEARS that a wave of tax increases and spending cuts are being planned to tackle the growing budget deficit have been dismissed.

Health Minister Mary Harney insisted such a “knee-jerk” response to worse-than-expected July exchequer figures would not help the economy, but she warned funding for health and other areas would be reined in next year.

Tánaiste Mary Coughlan remained “hopeful” no further spending cuts would be needed before the budget and stressed she did not anticipate tax rises in December.