Lenihan tries to soften blow of budget

Lenihan tries to soften blow of budget

By Paul O’Brien and Mary Regan - Wednesday, December 09, 2009

FINANCE Minister Brian Lenihan has made a last-ditch attempt to soften people up for today’s devastating budget, which will include drastic cuts in public sector pay, child benefit and social welfare.

Mr Lenihan insisted the €4 billion of cuts announced this afternoon would represent "the last of the very difficult budgets" – even though the Government will have to cut another €4bn next year and a further €3.5bn in 2011.

Fine Gael last night ridiculed what they saw as Mr Lenihan’s preemptive attempt at damage limitation and predicted a "budget of despair" for workers, families and the poor.

"€4 billion in cuts may be easy for Fianna Fáil to announce but it will be more than difficult for the ordinary families who face huge cuts in pay, welfare payments and social services," party leader Enda Kenny said last night.

Mr Lenihan will rise to his feet at 3.45pm in the Dáil to announce what is expected to be most severe budget in decades. It is understood to include:

* A cut in child benefit of up to 10%, which would reduce the monthly payment by more than €15.

* A cut of more than €8 in the weekly payment for unemployed people.

* A cut of more than €40 in unemployment payments for under-23s who refuse to partake in further training.

* A 4% to 5% cut in most other welfare payments. The old-age pension will be left untouched.

* Average pay cuts of between 5% and 6% for the country’s 315,000 public sector workers, with deeper cuts for those earning the highest salaries, such as the Taoiseach and his ministers.

* A 5% cut in fees paid by the state to lawyers, doctors and other professionals.

* An increase of circa €10 in emergency department & charges.

* A 50c charge on every prescription for medical card holders.

* A carbon tax, pushing up the price of petrol, diesel and home heating fuels.

On the flip side, speculation grew last night that the Government would cut excise duties, meaning a fall in the price of a pint.

The public sector pay cuts (€1.3bn) and social welfare cuts (up to €1bn) will represent the largest elements of the €4bn savings package.

The Government will rush through legislation to ensure cuts in those areas take effect from January 1.

Taoiseach Brian Cowen confirmed that a social welfare bill would be before the Dáil this week.

Mr Cowen rejected claims by Labour leader Eamon Gilmore that Mr Lenihan had deliberately sought to collapse last week’s union talks. That failure means the Government will cut public sector pay today but it has also raised the prospect of public sector strikes.

As revealed by the Irish Examiner last weekend, the Government has already prepared the legislation to cut pay. It will be presented to the Dáil next week.

Mr Cowen last night held meetings with Independent TDs Noel Grealish, Michael Lowry and Jackie Healy-Rae in an effort to secure their support for the budget. The Government is confident that it will pass.

Comment:

The cuts mentioned above represent only the major ones that are expected to be announced. We will not know the full extent of what has been described as “the most savage budget cuts in the history of the State” until the actual announcement is made later today (Dec. 9, 2009). In the meantime, people in Ireland are hoping for the best as they try to cope with this and the damage from the floods.