Taoiseach refuses to rule out welfare cuts

TAOISEACH BRIAN Cowen refused to rule out social welfare cuts in next month’s budget.

He said that it was necessary to consider all areas of expenditure.

“The size of the problem is such that the idea that we can exclude 35 per cent of the current spend from consideration is unacceptable,” he added.

“There are those who say that the social welfare budget should not be touched, while another constituency is stating that the €19 billion in public service pay and pensions should be immune from consideration.” In such circumstances, said Mr Cowen, the remaining €15 billion, which was used to provide the services on which members of the public depended, must be considered.

“Are people seriously suggesting that we can obtain a €4 billion adjustment out of that €15 billion,” the Taoiseach added.

“That is not an option. As a result, we must consider everything.” Mr Cowen said that a sustainable way forward must be considered in the budget.

“In light of the fact that up to the end of October the total revenue accruing was €26 billion, while the social welfare bill alone stands at €21 billion . . . are the deputies opposite suggesting that it will be possible to maintain all payments into next year regardless of the consequences?” he asked.

The Taoiseach was replying to Labour leader Eamon Gilmore who said that the Society of St Vincent de Paul (SVP) had published its pre-budget submission on Tuesday.

He said that unlike Government Ministers and some hardline commentators, wishing to inflict more pain on the poor, the SVP was in contact with people with real problems.

“The SVP concludes that there is no moral or economic justification for cuts in social welfare or pensions,” he added.

“It asks, in particular, that the Christmas bonus payment for people on social welfare, which was withdrawn by the Government this year, be reinstated.” Labour, he added, agreed with the SVP conclusions.

Mr Cowen said that while he recognised the wonderful work done by the SVP, the moral situation now being faced was how there could be a sustainable level of assistance to people on social welfare, based on current economic circumstances.

“If it is suggested that the choice is that one leaves everything as it is because one wants to be in favour of helping those who are unemployed or dependent on the social welfare system . . . as against another crowd, depicted as the Government, who are against people of that ilk . . . it is a totally wrong choice to put forward,” he added.

During the good times, said Mr Cowen, the Government had ensured, quite rightly, that people on social welfare received unprecedented increases to assist them.

“We are proud of that record. In the past five years, with inflation of 11.9 per cent since 2004, the basic jobseeker’s allowance increased by 37.7 per cent and pensions increased by 51.1 per cent,’’ he added.

Mr Gilmore said that one of the choices the Government appeared to have already made was to rule out any tax increases for the super-rich.

“When it comes to making a choice, the Taoiseach does not have a difficulty in stating that he will do what is needed in order to protect the interests of people who are very rich and that those who are poor will be obliged to face the consequences,” he added.

Mr Cowen said he did not accept the contentions made by Mr Gilmore, adding that personal taxation had been increased to a considerable degree in budgets introduced in October of last year and April of this year.

The position of those on low incomes must be maintained to the best extent possible, he added.

There was a 12 per cent deficit in respect of the current account, which could be dealt with over time. However, there was also a structural deficit in the economy.