Taoiseach: Cuts won’t wipe boom era changes

TAOISEACH Brian Cowen has told people his cuts programme will hurt but would not wipe out the positive changes of the Celtic Tiger years.

He said Ireland did not need to return to living standards experienced in the 1980s but would see levels settle where they were in the relatively recent past.

In his statement on the Government’s four-year plan Mr Cowen said Ireland had to overcome two big problems. It had to balance its books and pay for the debt which had blown up during the recession.

“We don’t just have a deficit crisis. We have a debt crisis,” he said.

However, Mr Cowen said the need to make €15bn worth of cuts by 2014 would not mean all the benefits which people had become used to would “go out with the sea”.

And he said together the four-year plan and the budget would allow people to look into the new year with a greater sense of clarity.

“Many of the important economic and social gains that we have seen in this country can be maintained.

“There are inherent gains, there are investments that have been made that are still with us,” he said.

The Taoiseach said people would be able to assess his economic decisions as part of the debate on the upcoming general election.

And however the opposition chose to fight the election they should not create false hope and make sure any plans are realistic, he said.

On specific issues in the plan Mr Cowen explained that the traditional attitudes to the minimum wage restricted the room for movement in taxation policy.

“When we brought in the minimum wage there was a view that we would keep it out of the tax net and that narrowed our tax base too,” he said.

Speaking without a script and from a just a handful of notes Mr Cowen criticised the Labour Party’s plan of splitting the adjustment so that half came from taxes and half from cuts, the Government’s plan is for the ratio to be 2:1.

“If the idea is that we can do half taxation and half expenditure then the design of the programme changes significantly,” he said.

Green Party minister Eamon Ryan also spoke on behalf of the Government and called for all parties to respect each other’s stance and focus on the issues on the table at the moment.

He asked for media to be responsible in their commentary and understand why the Government could not deliver precise figures on issues which were under negotiating as part of the national bailout.

Mr Ryan accepted people should know who was negotiating with the IMF on Ireland’s behalf. The team, he said, included Department of Finance secretary general, Kevin Cardiff; the head of the NTMA, John Corrigan; the Financial Regulator, Matthew Elderfield, and Central Bank Governor, Professor Patrick Honohan.

Mr Ryan said he supported the Government’s position on the budgetary adjustment.

However, the coolness of the relationship between the two coalition partners was also apparent.

When he arrived in the Dáil chamber Social Protection Minister Eamon Ó Cuív beckoned him to move over and speak from the Government’s front bench.

However, Mr Ryan refused and opted to remain on the Green Party seats to deliver his speech.