Social welfare cuts and carbon tax not ruled out
“Everything is in the mix. We cannot exempt anything,” she said when asked about the possibility of social welfare cuts and a carbon tax.
Reducing the minimum wage was not an issue and there was no suggestion that the Government would change the corporation tax rate of 12.5%, one of the lowest in the EU, the Tánaiste said.
“Our corporation tax is still a mainstay of our policy and linked into the smart economy policies. This is how we are going to attract new industry into the country,” she said.
She stressed that the budget — required to cover the ever-increasing hole in the public finances — would not be easy or popular but it was essential for the country.
“We will not have any credibility in the world and we will not get access to finance and completely lose our reputation unless we take the necessary steps,” she said.
Taoiseach Brian Cowen, reiterating this point, said the state would have to take the necessary measures to manage the affairs of the country to maintain international credibility.
“We are in unprecedented territory in terms of the impact that this recession is having,” he said.
Mr Cowen said that whatever measures the Government brings in will have to cover the current situation and try to take the future into account as well, but that everybody would have to shoulder the burden.
The Government could not have known in advance how bad February’s deficit was since a lot of payments do not come into the Exchequer until the end of the month, and the final figures were delivered on Tuesday morning, he said.
Health Minister Mary Harney said the e8 billion earmarked for capital spending this year would have to be adjusted.
“We may have to delay some capital projects to ensure that we bring stability to the public finances,” she said.
The Government was also focusing on how to increase exports to the country’s key export markets and at ways to help business by ensuring people are paid more quickly, Ms Coughlan said.
This was essential at a time when banks were cutting back on credit facilities, she said.
“I have a very clear strategy and I meet with my state agencies, like a war cabinet, regularly, to see how we can improve our competitiveness,” she said, adding that this includes cutting energy costs, and service and local authority charges that are big issues for business.
Labour costs continue to be a big issue and are under discussion but reducing the statutory minimum wage was not an issue, the Tánaiste said.
Her department is evaluating all proposed measures to ensure they would not have a negative effect on enterprise and employment.
Ms Coughlan said she has adjusted her budget to focus on sustaining people in employment, spending on science and research and development while ensuring value for money.
She referred to the Compliance Bill, regarding employers’ rights and criminal offences of employers, the scope of which is a bone of contention for employers.
“We are working towards a fair way to protect workers’ rights and at the same time ensure that employers can survive,” she said.
