The Taoiseach has today told Fianna Fáil's national youth conference the public finances will have to be cut and called for "coherent proposals" from the Opposition.
"The biggest crisis for the State is the public finances. We are living way beyond our means and we must pull back. There is no option to do otherwise," Brian Cowen told his audience in Bundoran, Co Donegal.
"For every €30 of income, we are spending over €50. That has to stop. We have to stabilise it, we have to correct it, and we have to do it now. It is in all our interests to do so. And my generation have a particular responsibility to your generation in getting this right.
"If we act now we can expect to see recovery begin by the end of next year. And the prospect of recovery will boost confidence and that will further reinforce recovery. The vicious circle will instead turn to a cycle of growth."
Mr Cowen said calls for an eight-year correction to the State's public finances would add a further €40 billion to the national debt. "The truth is that those who say “Don’t cut - borrow instead” are only paving the way towards even bigger cuts for the future."
The Taoiseach said next week's Dáil debate on the pre-budget outlook would allow the Opposition to set out their views on what decisions should be made in the budget.
"Both Fine Gael and Labour have said that they support the necessity of reducing the budget deficit in 2010 by €4 billion. . . . Yet both parties have consistently opposed almost all of the proposals put forward by Government on achieving the adjustment target, while at the same time, refusing to set out an alternative approach.
"By continuing to sit on the fence, their stated position lacks all credibility" he said. Mr Cowen called on Fine Gael and Labour to make "coherent proposals" on achieving €4 billion in savings "rather than just hear the constant rhetoric of condemnation".
"It is becoming increasingly clear that Deputy Kenny and Deputy Gilmore are strong on rhetoric but short on specifics. It’s time for them to park the soundbites and to be honest with the people as to what exactly is their budgetary policy.
"Prices are falling at the fastest rate in 75 years. The latest inflation figures published on Thursday show that prices fell by 6.6 per cent in last 12 months. This means that the real value of take-home pay and welfare payments has increased by that amount in the last year," the Taoiseach said.
"The fairest thing of all is to support those who have been hit hardest by the recession — those who have lost their jobs. Our main priority now must be to get them back in to work."
Referring to the National Asset Management Agency (Nama), Mr Cowen said few subjects "have been debated more intensively and more passionately" in the history of the State.
"Much of the debate has centred on the risk involved in Nama. Let us be clear: the resolution of the banks’ difficulties involves risk. That is why this government, like governments all over the world has had to step in. But there is another risk that is less prominent in the debate. That is the risk to the taxpayer of paralysis and delay."
Earlier today Labour leader Eamon Gilmore said Fianna Fáil was determined to pit the private and public sectors against each other and see certain workers demonised.
While accepting the need for the Government’s projected €4 billion savings, the Labour chief said he would be tabling alternative proposals to kick-start the economy.
Mr Gilmore said: “The Fianna Fail approach is simple - it’s called beggar my neighbour.
“They have chosen to sow division and to engender conflict. To set private sector against public sector, employed against unemployed. To identify particular groups in society, to demonise them, and to target them.”