Everyone must contribute to budget cuts, says Lenihan

EVERY SECTION of society must make a contribution to the budgetary “adjustments”, Minister for Finance Brian Lenihan has told the Dáil.

He said that “we must protect the vulnerable in so far as we can but we must not allow any section of the community believe it cannot make any contribution. Everyone must make a contribution and those who have most must contribute most, but everybody will have to contribute something.”

Winding up the two-day Dáil debate on the economy Mr Lenihan insisted, however: “following the adjustments that have to be made, we will still hold on to most of the substantial gains in living standards that we achieved in recent years.”

He said the cuts “will be painful for living standards but it is essential that we all keep a sense of perspective on this matter. Over the past decade or so, living standards for all, including for those dependent on social welfare payments, have increased considerably.”

In the past five years “even the lowest rate of welfare payment rose by some 45 per cent”, he said.

And while “there have been serious job losses in construction, employment in other sectors has held up well, such that we have close to 1.9 million at work earning wages that had also increased above the cost of living”.

But the “budgetary adjustments” on their own could not deliver economic growth and a “key part of the plan will focus on structural reform”.

The Minister said “public service numbers have to fall. The costs of public services have to be reduced and the way in which these services are delivered has to be reformed and transformed. This is why the Croke Park agreement is important as a framework under which these changes can be delivered. In making these points, I do not imply any general criticism of the public service and must say that many of the criticisms miss the mark, often by a wide margin.”

The Government would agree a “framework and plan for the next four years which will be critical for our economic recovery”.

Acting on this plan “will involve difficult decisions because they will cause pain for many, but we have no choice but to make them”.