Cowen braces nation for ‘3 years of pain’

TAXES will rise as living standards fall and public services suffer, Brian Cowen warned in his first key note address to the Fianna Fáil ard fheis as Taoiseach.

In a sombre appeal for national unity, Mr Cowen stressed the economic crisis would get worse during “three years of pain” before things get better.

Mr Cowen rounded on bankers, expressing “disgust” for their behaviour as he announced a shake-up of financial regulation.

The Taoiseach made it clear major tax rises were on the way as he braced the nation for further hardship.

“Living standards will fall across the country, services will suffer in the short term, and we will need to be patient.

“The measures we are taking to restore our economy will be painful for all.

“Our tax system needs to change. And while no one can be insulated from this reality we will seek to do it in a fair way that is based on ability to pay.

“Those that can bear it best will have to bear it most. But all will have to bear some burden.

“The fact is, we are now spending too much on the day-to-day running of the country,” he told 4,000 delegates in west Dublin.

The Taoiseach launched a strong attack on wrongdoing in the financial sector as he tried to counter opposition charges his Government turned a blind eye to what was going on in Irish banking.

“There is huge anger and disgust out there at the way some of our bankers behaved. What they did was wrong, it was selfish and it caused a lot of pain and hardship to Irish people. They will not be forgiven easily,” he said, indicating that gardaí investigations were the best hope of achieving the retribution the public wanted.

The Taoiseach said a new Banking Commission, incorporating the responsibilities of the Central Bank and the supervision and regulatory functions of the Financial Regulator, will be created based on a Canadian model, while an overseas banking regulator will be brought in to keep oversight of the banks.

Mr Cowen also unveiled a new enterprise stabilisation fund with an opening budget of €100 million to be run by Enterprise Ireland intended to “support viable but vulnerable exporting companies who, but for this recession, would be thriving”.

In a speech intended to deal with criticism over his style of leadership, Mr Cowen insisted he understood the pain Government policies were causing and sympathised with the “hurt” brought about by unemployment.

“The next three years will be tough. But this time will pass. Confidence will return. The world will recover. And Ireland will rise again,” he said.