‘No easy options’ in emergency budget

THE crisis budget will pose “no easy options” according to the Taoiseach, Brian Cowen, as he revealed the Government may seek savings of more than €4.5 billion.

The extent of the cuts and tax increases will be unveiled on April 7 giving just two days of debate before the Dáil breaks for holidays. The break will be cut short by a week to allow deputies return on April 22 to debate the measures and pass the budget through the House.

During Leaders’ Questions in the Dáil yesterday, Mr Cowen said the Government faces a gap of e4.5bn — made up of e3.5bn in revenue shortfalls and e1.5bn in extra expenditure caused by more people becoming unemployed.

He said it will be a “matter of political judgment” whether savings beyond the e4.5bn will be sought on April 7 because the budgetary shortfall is “a moving target”.

He said the budget will have to be framed in a way that would restore the credibility of Ireland in the international markets.

The Cabinet began the first of a series of budget meetings yesterday morning and ministers were briefed by Department of Finance officials on the options available.

Mr Cowen said the economy is likely to contract by 6.5% this year — considerably more than the 2% predicted when the first budget for 2009 was delivered last October.

“The decisions that will have to be taken while necessary, they will be difficult. There are no easy options here,” he said.

The Opposition demanded to know the budgetary options being considered by the Government so they could make constructive suggestions.

The Taoiseach offered to engage with the Opposition but said the budget details are subject to confidentiality. He said a debate could be held before between parties before April 7.

Labour leader Eamon Gilmore said this was “either a genuine exercise or a political smokescreen”.

“If you want the opposition parties to meaningfully engage in this invitation to address the State of the public finances you are going to have to make available to us the information that you have available to you.”

Mr Cowen said the e4.5bn is based on an estimate by the Department of Finance but “the Government will make a political decision on the final figure that we believe is prudent in the circumstances”.

“We have to take into account continuing deterioration that is taking place.”

The Taoiseach also indicated that there will be a “multi-annual framework” in relation to the spending cuts and taxation measures.

“It would be good for the public if we were to indicate as a government what we intend to do budgetarily not just this year but the following year and even perhaps into the year after,” he said.