Cabinet agrees budget amid leak concerns

THE cabinet reached agreement yesterday on the bulk of what is expected to be the harshest budget since the late 1980s.

After a string of meetings in the past 10 days to discuss both the budget and the bank bailout scheme, the cabinet will not meet again until 8am next Tuesday, the day of the budget.

It is the surest sign that all the key decisions have now been agreed. But the Department of Finance is understood to be angered that several of the measures under discussion have already leaked.

Ministers and advisors were under orders not to disclose details of what Finance Minister Brian Lenihan was proposing.

Despite this, however, details of how the Government might save €1bn next year by “reprioritising”, or delaying, some projects in the National Development Plan have already emerged.

Similarly, it has also been reported there will be increases in PRSI and third- level registration fees and a halt to the decentralisation programme.

Ministers met from 1pm until 5.15pm at Government Buildings yesterday, with the talks being described as “business-like” by one participant, who said the bulk of the budget package was “concluded”.

It is being framed against a steadily deteriorating economic backdrop, with the Economic and Social Research Institute predicting earlier this week that the recession will last at least until the end of 2009.

The ESRI also predicted that unemployment would average 8% in 2009, up from 6.1% this year.

Separately, a report produced for the Department of the Environment published yesterday predicted that the construction sector would continue to haemorrhage jobs next year.

DKM Economic Consultants said the numbers employed in construction would be down to 200,000 in 2009 from a peak of 285,000 in 2006.

Last night in the Dáil, Labour leader Eamon Gilmore accused the Government of doing nothing to tackle the jobs crisis.

Implementing policies to tackle the jobs crisis would get people back to work, increase tax revenues and save on social welfare payments, he said.

“It is clear that the Government has no coherent or determined strategy to deal with the issue. They have been spending months focused on the public finances, but there is no jobs strategy.”

Labour proposed a motion calling for the introduction of measures aimed at increasing employment.

But the Government defeated it and passed one of its own which commending the “stewardship of the economy and employment market... which means that Ireland meets the current challenges from a strong position with over 640,000 jobs having been created over the last 11 years.”

Social Affairs Minister Mary Hanafin said a number of programmes were already in place to assist the unemployed.