D-DAY
Following last-minute horse trading with independents — Jackie Healy Rae of Kerry South and Michael Lowry of Tipperary North — the Government said it is “confident but not complacent” it will hold its thin Dáil majority of two to push through €6 billion in cuts and tax hikes.
It’s the first installment of €15bn of total cuts that will be imposed over the next four years and will be closely watched by the EU and IMF who said Ireland must “rigorously implement the budget for 2011” as a condition for its €85bn bailout package announced last week.
Once passed, the focus in Fianna Fáil is likely to turn to who should lead them into the next election.
Foreign Affairs Minister Micheál Martin yesterday reiterated his ambitions to lead the party, but said he will not mount a challenge to Brian Cowen and will support him to stay on as leader during the general election expected in March.
The Government will have a majority of 82 to support today’s budget after guaranteeing the votes of Mr Healy Rae and Mr Lowry following crunch talks between both independents and Finance Minister Brian Lenihan.
Mr Lowry said he will vote with the Government because the country is “in grave economic danger” and not because of “local issues” or changes to the gaming industry demanded by him which could lead to a super-casino in his constituency.
Fine Gael last night left open the possibility of not opposing the budget, saying it will decide how to vote when it sees what’s in it. Independent TDs on the opposition benches could also abstain or support it.
Ministers are expecting an angry backlash from the public after Mr Lenihan rises to his feet at 3.45pm in the Dáil today to announce one of the most feared budgets in history.
It is expected to:
* Slash child benefit payments by €10 for the first and second child, €20 for the third, and back to €10 for the fourth.
* Cut other welfare payments, excluding the state pension, by 5%.
* Bring those on incomes as low as €15,300 into the tax net.
* Increase excise on alcohol and cigarettes.
* Cut ministers’ pay by between 5% and 10%.
* Introduce a “universal social charge” of around 7% applicable to all wages.
The range of cuts and tax increases will be imposed despite a promise by Mr Lenihan in last year’s budget that it was “the last big push”, “the worst is over” and we have “turned the corner”.
Mr Martin warned it’s going to be a “very difficult budget” and while he expects it will be passed the Government “cannot take any vote for granted”.
He said: “The Government is very conscious of that and is very anxious for the sake of the country to get the budget through.”
Mr Lenihan will deliver the cuts as “the worst finance minister in Europe” after the dishonour was cast on him for the second year in a row by the Financial Times newspaper.
