REACTION:PROJECTED DEFICIT figures in the 2010 estimates give the Minister for Finance some €300 million to €400 million "to play around with", according to Labour's finance spokeswoman Joan Burton.
She suggested the Minister could enhance the flood relief package or “reinstate the Christmas social welfare bonus”.
Reacting to the figures published at midnight, she said: “What is really savaged was the capital spending,” going from €14.5 billion to “practically half that”. She said the Minister was “effectively cutting the heart out of the capital programme”.
The Dublin West TD, a constituency colleague of Minister for Finance Brian Lenihan, said “projects that are being finished are not being replaced”, although there may be some benefit from falls in tender prices and in the acquisition of lands at much lower prices.
Ms Burton stressed that the figures were “pre-budget” but, based on the statistics, the level of the projected deficit at 11.75 per cent “is slightly better” than the original figures of 12 per cent.
She pointed out that a lot of the other figures were based on targeted savings being achieved. “If the €4 billion target is achieved the projected deficit will come back down very slightly on what was forecast.”
In the context of the floods, she said: “There would be some room for the Minister to offer a more generous flood package if that was his inclination on budget day.” Some of the county councils around the Shannon had particular difficulties with the flooding.
Ms Burton added: “If the flooding is the single biggest disaster to hit the country, it might be that extra funding could go to flood relief, or the Minister could reinstate the social welfare Christmas bonus, though I think that unlikely.”
Fine Gael finance spokesman Richard Bruton described the estimates as “frightening”. He said the figures “are an appalling reflection of a Fianna Fáil government that has lost all control of the economy and the public finances, and has lost the trust of the Irish people”.
He hit out at what he said was a “lack of any plan” to deal with unemployment “given the forecast of the €3 billion rise in social welfare spending” and 75,000 more unemployed.
Mr Bruton, who is also Fine Gael deputy leader, said: “The projections in these estimates are frightening, with Ireland set to borrow more in the face of falling tax receipts, rising unemployment and soaring social welfare spending.
“The cost of servicing Ireland’s debt has shot up by €2 billion, a rise of 75 per cent, while the Government dithers over cutting the cost of the public sector. The collapse in the partnership talks means Fianna Fáil has lost its last chance to implement genuine public sector reform.”
He noted: “Ireland’s borrowing requirement is expected to rise further to 13.5 per cent of GDP, up from 11.75 per cent this year. And these projections do not even include the additional borrowing that may be required if the Government decides to try to keep Anglo Irish Bank afloat.
“Tax receipts will continue to fall, dropping by a further €640 million because of the ongoing recession and the impact on tax receipts of the additional 75,000 loss in employment that the Government is predicting on the basis of its own existing policies.”
