Axe to fall on spending plans

The Government will announce a wave of spending cuts today, to plug a gaping hole in the public finances.

Up to €500m will be slashed from the budgets of all departments to compensate for lower-than-expected tax take for the first half of 2008.

The axe may fall on the Cabinet’s controversial pay rises which are due in September, and on recruitment, advertising and consultancy services to generate some savings.

Some National Development Plan projects may also be delayed to help plug the expected €5bn in tax revenues by the end of the year.

A major debate on the economy and the €22bn NDP takes place in the Dáil on Wednesday and Thursday.

Oxfam Ireland called on the Government not to sacrifice its commitment to the overseas development aid budget.

Ireland has committed to achieving the United Nations target of 0.7% of GNP by 2012. It has already met the first commitment to spend 0.5% of GNP on overseas aid by 2007.

Finance Minister Brian Lenihan yesterday published the annual report of the NDP which detailed progress on projects during 2007.

The minister claimed that more than 4,500km of non-national roads have been improved, 11 national road network projects were completed during 2007 and 67 new rail carriages are now operating on the Dublin-Cork intercity route.