The Government will today freeze the implementation of key election pledges on health, education and infrastructure when it announces paltry increases in spending for 2003. This is in an attempt to control the national finances, write Mark Brennock and Cliff Taylor
The Taoiseach announced yesterday that there would be no extension of medical card eligibility next year, despite the National Health Strategy commitment and Fianna Fáil's manifesto pledge to give medical cards to 200,000 extra people in the lifetime of the Government.
School-building projects will be put on hold, road and rail projects will be deferred and plans across all departments will be shelved.
One well-placed figure said next year's planned increase in spending would be in the region of 4 per cent - less than the current rate of inflation.
This compares to a targeted increase this year of 14.3 per cent, with fears that the actual rise could be close to 20 per cent.
In addition, capital spending - on housing, transport and other infrastructure - will actually be lower next year than in 2002.
The three areas the Government said it would protect from cutbacks - health, infrastructure and education - will, therefore, see major spending plans deferred.
Infrastructural projects promised in the National Development Plan in 1999 will also be put on the long finger unless alternative funding can be found.
The Minister for Finance, Mr McCreevy, is expected to indicate the Government's determination to stick to its spending targets next year. Budgets have substantially over-run over the past couple of years, contributing to the current budgetary problems and leading to tension between the Department of Finance and other departments.
Given the seriousness of the financial position, Mr McCreevy is expected to indicate that management of spending will be considerably tightened next year, with the Department of Finance taking the lead role.
A new rigorous programme of budget management will be put in place, involving much tighter monitoring and clearance procedures in an attempt to give some credibility to the 2003 budgetary targets. Much closer control on public sector recruitment is also expected.
Together with the tight spending targets for next year, these measures are designed to send a clear message that the Government is determined to get a grip on spending and to avoid unnecessary borrowing on budget day.
In anticipation of a wave of anger from his backbenchers, Mr Ahern has put in place special arrangements today to explain the position to Fianna Fáil's TDs and senators. The party's finance policy committee - which all Oireachtas members can attend - will be convened this afternoon to hear from Mr McCreevy.
Mr Ahern yesterday gave an economic presentation to his parliamentary party, warning that the Estimates would be very difficult.
The Opposition last night condemned the expected cuts and deferrals, with Fine Gael's leader, Mr Enda Kenny, accusing Mr McCreevy of moving to "wring a bit more life out of our old people, our sick people, our children".
He also called on the Government not to "hide" capital spending in the National Development Finance Agency, a mechanism that could allow the Government reduce capital spending on paper.
Labour's health spokeswoman, Ms Liz McManus, singled out the news on medical cards.
"The Government secured votes in the general election on the basis of manifesto promises like this. As we now know, that election campaign was a daily litany of lies and deceit."
Sinn Féin's Mr Caoimhghín Ó Caoláin said the disadvantaged were paying the price of the end of the boom, and his party would oppose "the cutbacks being planned by this Government".