Cowen: Drastic Budget was 'necessary evil'

Taoiseach Brian Cowen today led a sustained defence of the toughest Budget on record warning there was no avoiding the swingeing €4bn pay and welfare cuts.

As the Opposition lashed out at the Government for fast-tracking 4.1% social welfare reductions, Mr Cowen claimed the radical plan was also a jobs stimulus.

“The Budget will demonstrate to ourselves and to others that we are succeeding in mastering the challenge,” the Taoiseach said.

“It is no time for half-measures, evasion or long-fingering.”

The most controversial aspects of Budget 2010 – child benefit cuts, welfare reductions and staggered pay cuts including 5% for the lowest paid up to €30,000 – have been branded unfair and vicious with unions threatening strikes.

Both Fine Gael and Labour claimed legislation was being hurried through the Dáil amid fears Fianna Fáil backbenchers would cave in under a weekend of public disgust.

Finance Minister Brian Lenihan, who has declared the worst over, also launched a staunch defence and warned people hit by cuts they have to live in the real world.

Mr Lenihan was hit with a barrage of criticism as he continued the tradition of fielding calls from the public live on RTÉ radio.

“We do have very, very high rates of payments at all levels,” the minister said.

“It’s not just banks it’s public sector pay rates, it was private rates, it was welfare rates. We had the highest welfare costs in Europe.

“We have to adjust this. We have to live in the real world, it’s very, very difficult.

“I’ve had to live in the real world since becoming Minister for Finance and it’s not an easy world.”

Mr Lenihan said the billions of wealth created in the boom went on building one of the most generous welfare systems in Europe. He described increases as enormous.

“I’m trying to be fair to everybody here, it’s very, very difficult,” Mr Lenihan said.

Mr Lenihan insisted the economy will begin to grow in the middle of next year.

The Taoiseach and the minister both rejected accusations that the wealthy were not being asked to pay their way, claiming 48% of income tax is now coming from 4% of earners.

In a speech to the Dáil, Mr Cowen claimed the Government and Independent TD supporters were four square behind the tough savings plan.

Measures to protect jobs were also outlined including training or supports for 180,000 people; 80,000 jobs supported through the Employment Subsidy Scheme; and €900m invested next year to protect jobs and provide training. Another €200m will be invested in enterprise supports.