Noonan told to maintain €3.1bn cuts
As Fine Gael gathers for its annual think-in today, backbenchers plan to raise concerns that the party’s ministers in Cabinet are softening their position on the scale of cuts and tax hikes to be announced next month.
Senior party members appeared at odds over the figure yesterday, with Transport Minister Leo Varadkar saying there was “too much focus on the €3.1bn figure” while hinting at a compromise of €2.7bn.
However, junior finance minister Brian Hayes said he does not believe the Government has much room to manoeuvre. He said it would send a “very strong signal to the markets” if the Government surpassed the target of reducing the deficit to 5.1% of GDP next year, by sticking to an adjustment of €3.1bn.
Labour Party leader Eamon Gilmore has staked his political reputation on demands that the Government should use savings from the promissory note deal to ease up on austerity and reduce the €3.1bn planned, but has not stated what figure he has in mind.
Mr Noonan is due to hold a discussion on the budget with Fine Gael TDs and senators in Co Laois today. They will tell him “this is not the time to take his foot off the pedal”, said the chairman of the Parliamentary Party, Charlie Flanagan. “Our budgetary figures have been on target to date and it would be less than satisfactory to ease up now.”
However, Mr Varadkar said figures on growth due to be published on Thursday will give a better indication of what size the adjustment should be in order to reach the 5.1% target.
Mr Varadkar said it was important that the Coalition protect middle income people from further direct taxes, while also protecting services like education.
Minister for European Affairs Paschal Donohoe also hinted at a smaller adjustment, telling RTÉ’s The Week in Politics: “If the budget adjustment required to hit the 5.1% target is below €3.1bn, then that is something the Government would look to implement.”
Meanwhile, the Minister for Social Protection, Joan Burton, distanced herself from proposals to introduce a British-style social welfare cap on the sum of benefits a family can claim.
“I see the material referenced in the paper. I haven’t personally received anything detailed on this, but I do myself constantly follow welfare reform in other countries, and the British system is not very successful,” she said.
