Taoiseach denies targeting ‘soft options’ in budget

BRIAN COWEN last night denied he had targeted “soft options” in one of the state’s harshest budgets.

The Taoiseach admitted the sweeping increases in health and income tax levies would cause hardship, but claimed they had been spread fairly across social groups.

Mr Cowen insisted the budget had been fair despite the scrapping of the Christmas social welfare bonus, halving of the job seekers’ allowance for under 20s and bringing those on the minimum wage into the tax net, because the contributions of people in those categories was relatively small compared with higher earners.

Finance Minister Brian Lenihan also rejected opposition charges the Government had gone after the vulnerable. “We are all in this together. At the end of the day, fairness means you cannot shuffle off responsibility to somebody else,” he said at a press conference in Government Buildings where all 15 cabinet ministers flanked the Taoiseach, including Green Leader John Gormley who left the event early after spending much of his time there staring at the ceiling or away from Mr Cowen.

A Green spokesperson said nothing should be read into the body language: “As with many of these things, it was rushed and Mr Gormley was waiting for a signal to leave and do an interview with RTÉ.”

Mr Cowen insisted the budget was merely the first step in a five-year programme to re-balance the books.

“We have to change the way we operate as a country and we cannot let it sap our confidence.

“This recession will pass and the world will recover. The consensus is that the world economy will recover in 2010. That will bring a return of growth in Ireland in 2011,” he said.

The Minister for Finance also defended the controversial decision to move toxic debts into a special account. He insisted the value of e80 billion to e90bn that the Government had put on toxic loans was the first time this had been calculated.

He said he wanted to put that on record to correct some of the misleading figures that had been mentioned on international money markets regarding the level of the state’s exposure to the banks. He warned one publication had referred to a figure of e400bn. “We were anxious to quantify the outer limit of those loans on a book value,” he said.

Mr Lenihan said that those assets would be transferred to the new National Asset Management Agency, adding the state would pay a reduced price for them, but he would not be drawn on the figure, saying it would require careful examination.

Mr Lenihan stressed there would be a “hardening” of the approach taken to borrowers who owed the banks money.

“There will be a considerable hardening of attitude towards those who have been loaned money in these circumstances. We want to ensure that resources are taken up taken up front so that banks are returned as proper lenders in the economy.

“As far as borrowers are concerned they will have to pay up,” Mr Lenihan said.