Budget to focus on cuts, says Cowen

GOVERNMENT PLANS to “front-load” or have higher tax cuts in the first year of the four-year budgetary plan “may dampen economic growth in 2011”, Taoiseach Brian Cowen told the Dáil.

However, he said “it will give the necessary confidence to the international markets and secure our funding position which is fundamental to sustaining public services for our citizens and achieving sustainable economic growth in future years”.

Opening a two-day Dáil debate on the economy, Mr Cowen said December’s budget would be “weighted more towards reductions in spending rather than tax increases”. He reiterated the Government’s judgment that a total cut of €15 billion was needed over four years to reduce the budget deficit to 3 per cent by 2014, based on a “projected average annual real GDP growth rate of 2.75 per cent over the period 2011 to 2014”.

Earlier in response to Fine Gael leader Enda Kenny, Mr Cowen insisted it was the Government’s decision that a €15 billion four-year budgetary plan was necessary, and not a decision “imposed by the European Commission”.

Green Party leader John Gormley said public trust in the political system could only be restored through “fundamental change to the business of politics”.

“We need to see changes to ministerial transport, the salaries and expenses of Deputies and Senators and the working times and productivity of the Oireachtas.”

Mr Gormley also said the installation of water meters would begin next year and a significant proportion would be “completed in two to three years”. His department was “finalising proposals” for the introduction of water charges.

“A number of funding options are being considered, and the achievement of value for money will be a key factor in determining the approach to be taken.”

The water charges programme would “also provide a very significant job-creation opportunity in the construction sector. It is estimated that every €1 million per year spent on installing water meters will provide employment for a minimum of 10 people.”