Gilmore hints at room for manoeuvre in budget

Tánaiste Eamon Gilmore has hinted that families and households could be in line for some financial relief with room for movement in October’s budget.

However, the Labour leader said it was too early to start talking about specifics of what is planned.

“I think the fact that we have got the deal on the promissory note does provide us with some room for movement,” he said.

The Government this year swapped promissory notes to pay the €30bn recapitalisation of Anglo and Irish Nationwide for long-term bonds, which extend the repayment period and cut the cost of servicing debt.

The burden that people had borne over the last five years needed to be remembered, said Mr Gilmore.

“What we need to concentrate on is how we can provide some relief from that for families that are stretched. People who are paying the bills and manage to keep going and find at the end of the week that there’s nothing left after everything has been paid.

“I think we have to start looking now, as we come out of the recession, as we look at the post-recession, about how some relief and support and assistance can be provided to families and households in that situation.”

The ESRI has said the promissory note deal could cut the Government’s deficit by over €1bn in 2014.

However, the IMF has warned against using proceeds from the promissory note deal to reduce planned savings next year or in 2015.

The Coalition has agreed to €3.1bn savings in the next budget, of which €2bn will be spending cuts and €1.1bn will be saved through taxation measures.

Speculation has mounted that there may be tax cuts, a move which would be backed by Fine Gael. However, Labour would push for an employment investment package and Joan Burton, the social protection minister, wants to see an increase in the national minimum wage of €8.65.

The Government also wants to arrange to draw down some funds from a €6bn youth employment guarantee scheme from the EU, as it enters the last few days of hosting the EU presidency.

Mr Gilmore has been involved in leading talks on the EU’s €960bn budget, which is said to be close to being agreed with parliamentary members.

“The longer the MMF [the EU budget] is delayed, the longer it will be before countries can access funds,” said a source involved in the talks.