McCreevy announces biggest curb in spending in decade

The Minister for Finance has announced the biggest curb in public spending in well over a decade.

Charlie McCreevy has revealed €36.7bn will be spent this year and said the current rate of spending is not sustainable.

He expects all Ministers to manage with the amounts announced.

In total there is just a rise of 2% and with inflation running at almost 5% that is almost cancelled out.

The Minister said health, education and welfare remain the priority, with almost 66% of the money allocated to those departments.

The health budget is €8.9bn - up 6% but with inflation in the health sector rated at 10%, there are tough choices ahead for Minister Michael Martin.

Mr McCreevy today laid down the law to his Cabinet colleagues, saying he wants "value for money", and he cannot go on increasing health spending.

All Ministers will outline how the tight new estimates impact on the departments in briefings later this evening.

Minister McCreevy says he will deal with benchmarking and social welfare payments on Budget day.