TAOISEACH BRIAN Cowen moved a step closer towards getting consensus on the need for public spending cuts of €2 billion this year, following agreement last night with the social partners on a broad approach towards tackling the crisis in the public finances.
The executive council of the Irish Congress of Trade Unions (Ictu) is scheduled to meet at 10.30am today to consider a framework document on the issue. If approved, talks with the Government on the detailed measures to save €2 billion this year could get under way this afternoon.
Government officials were working overnight on the final elements of the framework document which will be presented to the Ictu and the other social partners for approval this morning.
Trade union sources indicated last night that in their view the document had the ingredients of a social solidarity pact, as taxation issues, as well as public spending cuts, would feature in the plan.
It is understood that the framework document involves an acceptance that all sectors of society have to share in the burden of economic recovery and an acceptance that the Government needs to make savings of €2 billion immediately.
Having achieved agreement in principle on the need for savings of €2 billion, the Taoiseach is prepared to listen to the views of the social partners on how this can be achieved.
Mr Cowen briefed his Cabinet colleagues yesterday on the progress in the talks and later told the Dáil that the Government would finalise its arrangements for cutting €2 billion in spending by next Tuesday. He also said tax changes would be required in the medium term to close the gap between Government income and expenditure.
He was responding to Fine Gael leader Enda Kenny, who accused him and his Government of wandering for the past month “through an economic desert bereft of ideas, decisions, direction and the courage to govern”. Mr Cowen insisted that the Government was providing leadership in developing a national effort along with the social partners.
“It involves providing leadership, to ensure that we are all committed to achieving those savings of €2 billion. The Government has been working to identify these savings,” he said.
The Taoiseach said that the Government had submitted a five-year stabilisation plan to the European Commission that required savings of €2 billion this year, €4 billion next year, another €4 billion the year after, €3.5 billion the year after that and €3 billion in year five.
“We will know by the end of the week whether we can come to an agreement on a framework for a pact that will bring stabilisation, that will be based on social solidarity,” he said.
“We are looking at all areas of current and capital expenditure. We have identified the €20 billion that is needed for pay and pension costs, the €20 billion in social welfare and social security costs, and the €15 billion in non-pay costs on the current side,” said Mr Cowen.
Emphasising that a combination of measures would be needed, the Taoiseach said the report of the Commission on Taxation, which will be published later this year, represented a timely opportunity to undertake a systemic review of all aspects of the taxation system in the context of the new challenges the country faced.
He rejected Opposition charges that the Government had abdicated responsibility to forces outside the Dáil in dealing with the crisis. “When the Government makes its decisions in the coming days, we will report to this House the decisions we have taken . . . I have no problem with democratic accountability, but as long as I am running this Government I will run it as I see fit and as I believe, based on my philosophy.”